RBI issues draft norms for lending of government securities

Subject : Economy

Section : Monetary Policy

Concept :

The Reserve Bank of India came out with draft norms (Reserve Bank of India (Government Securities Lending) Directions, 2023) for lending and borrowing of government securities with wider participation in the securities lending market.

Key-highlights of the draft guidelines

Government Securities Lending (GSL) transactions shall be undertaken for a minimum period of one day and a maximum period of ninety days.
Government securities issued by the central government excluding Treasury Bills would be eligible for lending/borrowing under a GSL transaction.
Government securities issued by the central government (including Treasury Bills) and the state governments would be eligible for placing as collateral under a GSL transaction.
An entity eligible to undertake repo transactions in government securities, and any other entity approved by the Reserve Bank would be eligible to participate in GSL transactions as lender of securities.

Kindly refer this article for notes on G-secs – https://optimizeias.com/g-sec-2/