**Policy Summary:**
This circular, RBI2020-21/29 DoR.No.BP.BC.92/1.04.141/2020-21 dated September 1, 2020, issued by the Reserve Bank of India (RBI) to all commercial banks, addresses Statutory Liquidity Ratio (SLR) holdings in the Held to Maturity (HTM) category. It supersedes earlier guidelines outlined in circulars DBR.No.BP.BC.62/1.04.141/2015-16 dated July 1, 2015, DBR.No.BP.BC.65/1.04.141/2015-16 dated December 10, 2015, and DBR.No.Ret.BC.90/12.02.001/2017-18 dated October 4, 2017.
Previously, banks were permitted to exceed the 25% limit of total investments under the HTM category, provided the excess consisted solely of SLR securities, and the total SLR securities held under HTM did not exceed 19.5% of Net Demand and Time Liabilities (NDTL) as of the last Friday of the second preceding fortnight.
The updated policy allows banks to hold SLR securities acquired on or after September 1, 2020, up to an overall limit of 22% of NDTL under the HTM category. This allowance is valid until March 31, 2021, and is subject to review thereafter.
Contact for further information: Prakash Baliarsingh, Chief General Manager.
Key Entities Referenced
Reserve Bank of India: The central bank of India.
Reserve Bank of India Classification, Valuation and Operation of Investment Portfolio of Commercial Banks Directions, 2021: A set of guidelines issued by the Reserve Bank of India regarding the classification, valuation, and operation of investment portfolios of commercial banks.
Commercial Banks: Banks that provide services to businesses and individuals.
SLR: Statutory Liquidity Ratio - the minimum percentage of deposits a commercial bank has to maintain in the form of liquid assets.
HTM: Held to Maturity - investments that a company intends to hold until maturity.
NDTL: Net Demand and Time Liabilities - the difference between the sum of demand and time liabilities (deposits) of a bank with the public and its interbank assets.
Prakash Baliarsingh: Chief General Manager at Reserve Bank of India.
March 31, 2021: Date until which banks could hold SLR securities acquired on or after September 1, 2020, up to an overall limit of 22% of NDTL.
The guidelines have been repealed. Please refer to the Reserve Bank of India (Classification, Valuation and Operation of Investment
Portfolio of Commercial Banks) Directions, 2021.
RBI/2020-21/29
DoR.No.BP.BC.9/21.04.141/2020-21
September 1, 2020
All Commercial Banks
Dear Sir,
SLR holdings in HTM category (Amended)
Please refer to our circulars DBR.No.BP.BC.6/21.04.141/2015-16 dated July 1, 2015
read with DBR.No.BP.BC.65/21.04.141/2015-16 dated December 10, 2015 and
DBR.No.Ret.BC.90/12.02.001/2017-18 dated October 4, 2017 on the subject.
2. Currently, banks are permitted to exceed the limit of 25 per cent of the total
n
w
investments under Held to Maturity (HTM) category, provided the excess comprises
a
only of SLR securities and total SLR securirties held under HTM category is not more
d
than 19.5 per cent of NDTL as on the hlast Friday of the second preceding fortnight.
t
i
On a review, it has been decided tWo allow banks to hold under HTM category, SLR
securities acquired on or after September 1, 2020 up to an overall limit of 22 per cent
of NDTL, up to March 31, 2021, which shall be reviewed thereafter.
Yours faithfully
(Prakash Baliarsingh)
Chief General Manager