Mumbai, Oct. 1: The Reserve Bank of India today announced that non-banking financial companies (NBFCs) should necessarily hold their investments in government securities only in dematerialised form.
The central bank said that this should be either in a Constituent’s Subsidiary General Ledger Account (CSGL) with a scheduled commercial bank, or the Stock Holding Corporation of India, or with a depository.
The NBFCs have, as a special case, been given time up to October 31 to dematerialise the securities/bonds held by them in physical form. “No further transaction should be undertaken by them in physical form with any broker,” the apex bank stated in a press statement today.
It pointed out that the NBFCs would not require its prior permission for opening their demat account with a depository approved by the Securities and Exchange Board of India (Sebi) or its participants. They should, however, within a week of their doing so, inform the Reserve Bank. NBFCs have further been directed to include in their advertisements the fact that deposits solicited by them are not insured.