Mumbai: To facilitate greater participation in corporate bonds by standalone primary dealers, Reserve Bank Thursday doubled the exposure ceiling limits for single borrower to 50 percent of the latest audited Net Owned Funds (NOF).
While for group borrowers, the exposure ceiling has been raised to 65 percent from 40 percent.
"To facilitate greater level of participation in corporate bonds by SPDs, it has been decided to increase exposure ceiling limits in respect of single borrower/counterparty from 25 percent to 50 percent of latest audited Net Owned Funds (NOF).
"And in respect of group borrower from 40 percent to 65 percent of latest audited NOF only for investments in AAA rated corporate bonds," RBI said in a notification.
In March 2014, RBI revised the exposure norms for standalone primary dealers and had said their clearing exposure to a Qualifying CCP (QCCP) will be kept outside of the exposure ceiling of 25 percent of its net owned funds applicable to a single borrower or counterparty.
The new guidelines, which came to effect from April 1, 2014, were aimed at promoting central clearing of standardised OTC derivative products through a Central Counter Party (CCP).
"The exposure ceiling limits would be 25 percent of latest audited Net Owned Funds (NOF) in case of a single borrower or counterparty and 40 percent of NOF in case of a group borrower," RBI had said.
