RBI issues rules for tri-party repo contracts

Tri-party repo is a type of repo contract where third entity as intermediary between the two parties

To support the growth of the corporate bond repo market, the Reserve Bank of India (RBI) on Thursday issued norms for tri-party repo contracts, including Rs 25 crore as minimum equity capital for an entity to work as a tri-party agent.
 
Tri-party repo is a type of repo contract where a third entity (apart from the borrower and lender) called a tri-party agent acts as an intermediary between the two parties. The services of agents cover activities such as collateral selection, payment and settlement, custody and management during the life of the transaction.
 
Introduction of tri-party repos will