Introduction: The Reserve Bank of India (RBI) has recently issued a crucial circular, DoR.RET.REC.59/12.01.001/2023-24, dated December 22, 2023, impacting how commercial banks report Reverse Repo transactions. This article delves into the revised instructions and their implications for reporting Form ‘A’ Return.

Detailed Analysis: In light of Circular DoR.RET.REC.43/12.01.001/2023-24 dated October 16, 2023, the RBI has reevaluated reporting norms for Reverse Repo transactions. Specifically, changes are made to Para B of the circular, outlining a shift in reporting requirements for transactions with non-banks (other institutions).

According to the updated instructions:

1. Original Tenors up to 14 Days: Banks are no longer required to report these transactions in Form ‘A’. This adjustment streamlines reporting for short-term transactions, reducing the reporting burden for banks.

2. Original Tenors More than 14 Days: For transactions with original tenors exceeding 14 days, banks must report them under Item VI(a) of Form ‘A.’ This item encompasses Loans, cash credits, and overdrafts under Bank Credit in India, excluding inter-bank advances.

It’s crucial for the Chairpersons and CEOs of all commercial banks to be aware of these changes to ensure accurate and compliant reporting.

Conclusion: The circular emphasizes the RBI’s commitment to refining reporting mechanisms, aligning them with the evolving financial landscape. Banks should promptly incorporate these changes to adhere to regulatory standards. As the Chief General Manager, Brij Raj, expresses in the circular, all other instructions from the October 16, 2023 circular remain unchanged. Stay informed and compliant with the latest developments in Reverse Repo transactions for a robust financial reporting framework.

***

RESERVE BANK OF INDIA

RBI/2023-24/92
DoR. RET. REC.59/1 2.01.001/2023-24
Dated: December 22, 2023

The Chairperson / CEOs of all Commercial Banks

Madam / Dear Sir,

Reverse Repo transactions – Reporting in Form ‘A’ Return

Please refer to the circular DoR.RET.REC.43/12.01.001/2023-24 dated October 16, 2023 on the captioned subject.

2. On a review, it has been decided to revise the instructions contained in Para B of the above circular. Accordingly, the Reverse Repo transactions of a bank with non-banks (other institutions) should be reported as under:

i. For original tenors up to and inclusive of 14 days – Not required to be reported in Form A.

ii. For original tenors more than 14 days – Item VI(a) of Form A [i.e. Loans, cash credits and overdrafts under Bank Credit in India (excluding inter-bank advances)]

3. All other instructions specified in the above circular dated October 16, 2023 remain unchanged.

Yours faithfully,

(Brij Raj)

Chief General Manager

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