RBI/2010-11/264
DBOD No. BP.BC. 58/21.04.141/2010-11
November 4, 2010
The Chairmen and Managing Directors/
Chief Executive Officers of
All Commercial Banks
(excluding Regional Rural Banks)
Dear Sir,
Accounting Procedure for Investments – Settlement Date Accounting
In terms of paragraph 1.1 (i) (d) of Master Circular No. DBOD. BP.
BC.18/21.04.141/2010-11 dated July 1, 2010 on ‘Prudential Norms for
Classification, Valuation and Operation of Investment Portfolio by Banks’ all
the transactions put through by a bank, either on outright basis or ready
forward basis and whether through the mechanism of Subsidiary General Ledger
(SGL) Account or Bank Receipt (BR), should be reflected on the same day in its
investment account and, accordingly, for SLR purpose, wherever applicable.
2. In this connection, it has come to our notice that the banks are not
following a uniform methodology of accounting for investments in Government
securities i.e. they follow either ‘Trade Date’ or ‘Settlement Date’ accounting.
With a view to bringing in uniformity, it has been decided that banks should
follow ‘Settlement Date’ accounting for recording purchase and sale of
transactions in Government securities.
3. It is advised that these instructions will be applicable from January 1,
2011.
Yours faithfully,
(B. Mahapatra)
Chief General Manager-in-Charge