RBI allows FIIs to offer Indian debt securities as collateral in F&O segment

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The Reserve Bank of India (RBI) has allowed foreign institutional investors (FIIs) to offer government securities and corporate bonds as collateral to bourses for derivative transactions.

The move, which has come after consultation with the Government of India and the Securities and Exchange Board of India, is aimed at strengthening FIIs inflows to India to bridge the current account deficit.

RBI also allowed FIIs to use their investment in corporate bonds as collateral in the cash segment other than already permitted collaterals.

"On a review, it has been decided in consultation with the Government of India and the Securities and Exchange Board of India (SEBI), to permit FIIs to use, in addition to already permitted collaterals, their investments in corporate bonds as collateral in the cash segment and government securities and corporate bonds as collaterals in the F&O (futures and options) segment," RBI said in a notification.

Read more about: rbi, fii
Story first published: Friday, March 15, 2013, 14:30 [IST]
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