May 14, 2002

Ref DBS.FID. No. C-16 / 01.02.00 /2001-02

The CEOs of All-India Term Lending Institutions
and Refinancing Institutions

Dear Sirs

Please refer to our Circular DBS. FID No C- 15/ 01.02.00/ 99-2000 dated April 8, 2000 in terms of which the terms and conditions for Ready Forward Contracts were specified by the Reserve Bank of India.

2. In supersession of the instructions contained in the above referred circular dated April 8, 2000 it is advised that the terms and conditions subject to which ready forward contracts (including the reverse ready forward contracts ) may be entered into, will stand modified as under :

1. Ready forward contracts may be undertaken only in (i) Dated Securities and Treasury Bills issued by Government of India and ii) Dated Securities issued by the State Governments.
2. Ready forward contracts in the securities specified at (a) above may be entered into by a banking company, a cooperative bank or any person maintaining a Subsidiary General Ledger (SGL) Account with the Reserve Bank of India, Mumbai.
3. Such ready forward contracts shall be settled through the SGL Account of the participants with Reserve Bank of India or through the SGL Account of the Clearing Corporation of India Ltd. (CCIL) with the Reserve Bank of India, and
4. No sale transaction shall be put through without actually holding the securities in the portfolio.

3. These terms and conditions will be the relevant terms and conditions specified by Reserve Bank of India under the notification No SO 185 (E) dated 1/3/2000 issued under Section 29A of Securities Contracts (Regulation ) Act, 1956.

Please acknowledge receipt.

Yours faithfully