Mumbai, Nov. 5 (PTI): The Reserve Bank of India has decided to withdraw, with immediate effect, the stockinvest scheme due to a decline in its use and drop in allotment period under initial public offerings (IPOs).
The stockinvest scheme is a mode of payment for shares or debentures in a public issue
“The use of stockinvest scheme in the primary market has declined substantially and the Securities and Exchange Board of India has taken steps to reduce time for allotment of shares,” the RBI said in a communication to banks.
As a result, the scheme need not continue any longer and may be treated as withdrawn with immediate effect, the RBI said.
The RBI has recommended that financial institutions (FIs) should only invest in rated debt securities, which carry a minimum investment grade rating from a credit rating agency registered with the Securities and Exchange Board of India (Sebi).
The investment grade rating should have been awarded by an external rating agency, operating in India, as identified by the Indian Banks’ Association or Fixed Income and Money Market Dealers Association (FIMMDA), the RBI said in its draft guidelines issued on investment by FIs in debt securities here today.