The Reserve Bank of India (RBI) has asked the constituents' subsidiary general ledger (CSGL) account holder to open a separate custodial account for each gilt account holder (GAH) and maintain such accounts distinctly. The apex bank in a circular issued today said that the transactions in the individual gilt accounts should be put through according to the instructions of GAH and the securities held in such accounts should be used only for transactions explicitly authorised by the GAH.
"CSGL account holders should ensure that at all times, the securities held on behalf of GAH are clearly segregated in its books from its own holdings held in the SGL account," the circular said. The CSGL account holder should not set off securities in the CSGL account or deal with them to extinguish partly or fully any amounts due to it from the GAH without the latter's consent.
The circular also mentioned that the CSGL account holder should not at any point of time mix the assets of one GAH with those of the another.
Dealers, however, feel that the move is not likely to have any impact on the government security market. A dealer said, "The move is due to the RBI's suspicion that some of the CSGL account holders might have been using the securities held on behalf of the GAH for maintaining their own statutory liquidity ratio (SLR) requirement."
According to the new circular, the CSGL account holders are required to send statement of account to each GAH at the end of each quarter if there are no transactions during the quarter and once in a fortnight, if in that fortnight transactions are conducted as per the specific request of the GAH.
