RBI revised Master Direction on Risk Management and Inter-Bank Dealings

RBI on May 03, 2024 has issued revised Master Direction on Risk Management and Inter-Bank Dealings. The revised directions provides the following:

1. While participating in the ETCD market, AD Category-I banks shall comply with the Master Direction – Reserve Bank of India (Financial Services provided by Banks) Directions, 2016 dated May 26, 2016, as amended from time to time and Standalone Primary Dealers authorized as authorised Dealer Category-III shall comply with the Master Direction – Standalone Primary Dealers (Reserve Bank) Directions, 2016 dated August 23, 2016, as amended from time to time.
2. Standalone Primary Dealers may borrow in foreign currency from their parent or correspondent outside India or any other entity as permitted by Reserve Bank of India and avail overdraft in nostro accounts (not adjusted within five days), only for operational reasons. Such borrowings shall be within the limit for foreign currency borrowings prescribed in the Master Direction – Standalone Primary Dealers (Reserve Bank) Directions, 2016 dated August 23, 2016, as amended from time to time.
3. NOOPL may be fixed by the boards of the respective Authorised Dealers and communicated to the Reserve Bank immediately through Centralised Information Management System (CIMS) / email. However, such limits should not exceed 25 percent of the total capital (Tier I and Tier II capital) of the Authorised Dealer.
4. AGL may be fixed by the boards of the respective Authorised Dealers and communicated to the Reserve Bank immediately through CIMS / email. However, such limits should not exceed 6 times the total capital (Tier I and Tier II capital) of the Authorised Dealer.