RBI//2004-05/501
DBOD.No.Leg.BC.98/09.11.013/2004-05
June 24, 2005
To
All Scheduled Commercial Banks (Excluding RRBs)
Dear Sir,
Section 20 of the Banking Regulation
Act, 1949 – Line of credit / overdraft facility to National Securities Clearing
Corporation Ltd. (NSCCL)
Please refer to Para 1.2.4 of our
Master Circular DBOD.No.DIr.BC.20/
13.03.00/2004-05 dated July 30, 2004 on Loans and Advances – Statutory and
Other restrictions, wherein it was advised that for the purpose of Section 20
of the Banking Regulation Act, 1949 the term 'loans and advances' shall not
include loans or advances against Government Securities, life insurance policies
or fixed deposit, facilities like bills purchased / discounted, purchase of
cheques, other non-fund based facilities like acceptance / co-acceptance of
bills, opening of L/Cs and issue of guarantees etc.
2. It has further been decided
in exercise of the powers conferred by clause (a) of the Explanation under sub-section
(4) of Section 20 of the Banking Regulation Act, 1949 (10 of 1949), that for
the purpose of aforesaid Section, the term 'loans or advances' shall not include
line of credit / overdraft facility extended by settlement bankers to National
Securities Clearing Corporation Ltd. (NSCCL) to facilitate smooth settlement.
Yours faithfully
(Anand Sinha)
Chief General Manager-in-Charge
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