RBI Issues Repo Directions: Key Rules on Eligible Securities, Participants, Reporting & Settlement

On 11-11-2025, the Reserve Bank of India issued the Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 to regulate the financial system of the country. The provisions came into effect on 11-11-2025.

Background:

1. Although the notification of this Direction is issued by the heading- Master Directions- Reserve Bank of India (Repurchase Transactions (Repo)) Directions, 2025, they will be called Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018.

2. These Directions supersede all other directions issued on this subject.

3. Applicable to:

   • repurchase transactions (Repo), undertaken on recognized stock exchanges, electronic trading platforms (‘ETP’) and Over-the-Counter (‘OTC’);

   • exchange traded repurchase transactions (Repo), procedure for execution and settlement of trades will be in accordance with the rules and regulations issued by the recognized stock exchange/Securities and Exchange Board of India.

4. These Directions will not apply to repo/reverse repo transactions under the Liquidity Adjustment Facility and the Marginal Standing Facility.

Key Provisions:

1. Securities eligible for repo will include:

   • Government securities issued by the Central Government or a State Government;

   • Listed corporate bonds and debentures, subject to the condition that no participant shall borrow against the collateral of its own securities, or securities issued by a related entity;

   • Commercial Papers and Certificate of Deposits;

   • Units of Debt Exchange Traded Funds;

   • Municipal Debt Securities.

2. Eligible participants in repo transaction:

   • Any regulated entity;

   • Any listed corporate;

   • Any unlisted company, which has been issued special securities by the Government of India, using only such special securities as collateral;

   • Any All-India Financial Institution- Exim Bank, NABARD, NHB, Small Industries Bank of India and National Bank for Financing Infrastructure and Development, constituted.

3. Repos will be undertaken for a minimum period of 1 day and a maximum period of 1 year.

4. Trading of Repo transactions can be doen on any recognized stock exchange, or on any electronic trading platform duly authorized by the Reserve Bank of India or on the over-the-counter market.

5. Repo and tri-party repo trades can use any agreed method—bilateral, multilateral, quote- or order-driven, anonymous or not.

6. All repo trades not done on recognized exchanges or approved platforms must be reported within 15 minutes:

   • Government securities- Clearcorp Repo Order Matching System (CROMS);

   • Other eligible securities- FIMMDA Trade Reporting and Confirmation System (F-TRAC).

7. Settlement of Trades:

   • First leg of all repo transactions will settle either on a T+0 or T+1 basis;

   • All repo transactions will settle on a Delivery versus Payments (DvP) basis;

   • All repos in government securities will settle through Clearing Corporation of India Limited or any other clearing agency approved by the Reserve Bank;

   • All repos in other eligible securities will settle through the clearing house of exchanges or any other entity which has been approved by the Reserve Bank.

8. Pricing of collateral, haircut and margining:

   • Collateral Pricing:

     ✓ First leg: priced at current market value;

     ✓ Second leg: first leg price + interest.

   • Haircuts/ Margins: It will be decided by clearing house or agreed bilaterally, subject to:

     ✓ Listed corporate bonds/debentures: minimum 2% (extra for tenor/illiquidity);

     ✓ Commercial Papers and Certificate of Deposit: minimum 1.5%.;

     ✓ Local authority securities: minimum 2% (extra for tenor/illiquidity).