As per RBI guidelines CD (Certificate of Deposit) can be issued to all persons residing in India. This product must be issued for at least 7 days.
Mumbai. The Reserve Bank of India said on Friday that Certificate of Deposit (Certificate of Deposit) will be issued in a minimum value of Rs 5 lakh. After that it can be issued in multiples of Rs 5 lakh.
Certificate of Deposit is a negotiable money market instrument without any guarantee. Issued in the form of a term promissory note by a bank against money deposited for a maturity period of up to one year.
Certificate of Deposit will be issued only in demat form The
Reserve Bank also said that CDs will be issued only in demat form and will be held with a depository registered with the Securities and Exchange Board of India (SEBI). According to the RBI guidelines issued in this regard, CDs can be issued to all persons residing in India. This product must be issued for at least seven days. Also, banks will not be allowed to give loans against CDs until the Reserve Bank gives approval in this regard.
As per RBI, the issuing bank is allowed to buy back CDs before maturity. But it will depend on certain conditions. In December 2020, the central bank had issued a draft guideline to know the opinion of the people.
No change in repo rate, will remain unchanged at 4 per cent
Let us tell you that while presenting the second bi-monthly monetary review of the current financial year, Reserve Bank Governor Shaktikanta Das on Friday announced to keep the main policy rate ‘repo rate’ at 4 per cent. The Monetary Review said that if the second wave of the Kovid-19 epidemic deepens and due to this there is a curb on activities across the country, then there is a risk of inflation going upwards.
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