INDIA DEBT TRADING RBI Notifications

Sr. No. Date 1 2 3 4 5 July 29, 2005 October 25, 2000 Subject Launch of Anonymous Order Matching Trading in Government Securities Investment portfolio of banks Transactions in securities Role of brokers September 23, 2005 Effective October 8, Outright Trading in Government Securities to be discontinued on Saturdays

November 13, 2000 Securities Transactions Permission to transact through The Stock Exchange, Mumbai November 22, 2000 Investment Portfolio - Transactions in Securities - Role of Brokers

Effective October 8, Outright Trading in Government Securities to be discontinued on Saturdays Starting October 8, 2005, there will be no outright transactions in Government securities on Saturdays, the Reserve Bank of India has announced. Government securities traded on Fridays on T+1 basis will be settled on Mondays or the next working day in case Monday is a holiday. The announcement meets a long standing demand of market participants as well as their representative bodies. Market participants and their representative bodies, such as, the Fixed Income Money Market and Derivatives Association of India (FIMMDA) and the Primary Dealers Association of India (PDAI) had a long standing demand for closure of the Government securities market on Saturdays. This was placed before the Technical Advisory Committee on Money, Foreign Exchange and Government Securities (TAC) at its meeting held today. The TAC discussed various operational aspects and recommended the discontinuation of outright transactions in Government securities on Saturdays. Accordingly, starting October 8, 2005, there will be no outright transactions in Government securities on Saturdays. Government securities traded on Fridays on T+1 basis will be settled on Mondays or the next working day in case Monday is a holiday. Transactions in call/notice/term money, Collateralised Borrowing and Lending Obligations (CBLO) and repos among market participants will continue to be undertaken on Saturdays as at present. Negotiated Dealing System (NDS), clearing and Real Time Gross Settlement (RTGS) system would also operate as usual. It may be mentioned that the stock markets and foreign exchange markets do not function on Saturdays. With discontinuation of outright transactions in government securities on Saturday, there will now be closer alignment of the various market segments in terms of business days. Alpana Killawala Chief General Manager Press Release: 2005-2006/378 TOP

Reserve Bank Announces Launch of Anonymous Order Matching Trading in Government Securities

The Reserve Bank of India announces the launch of the electronic order matching trading module for Government securities on its Negotiated Dealing System (RBI-NDS-GILTS-Order Matching Segment, NDS-OM in short ) on August 1, 2005. As part of its long term objective of developing the Government securities market, the Reserve Bank had introduced the Negotiated Dealing System (NDS) in February 2002 with the broad objectives of (i) ushering in an automated electronic reporting and settlement process, (ii) facilitating electronic auctions and (iii) providing a platform for trading in Government securities on a negotiated basis as well as through a quote driven mechanism. NDS has helped in achieving paperless and straight through settlement of secondary market transactions and has brought about significant improvements in transactional efficiency and transparency. However, the trading facilities on the NDS (both negotiated and quote driven) were hardly used, largely because they were not user friendly. In order to provide NDS members with a more advanced and more efficient trading platform, and as recommended by the Working Group on Screen Based trading in Government Securities (Chairman: Dr. R. H. Patil), the NDSOM trading module is now being introduced. NDS-OM will co-exist with the telephone based trading system as well as the exchange based trading mechanism. The broad features of the NDS-OM system are as follows: The NDS-OM module is part of Reserve Bank's Negotiated Dealing System. The use of NDS-OM trading module is voluntary and will be available in addition to the existing telephone based trading mechanism on NDS. During the first phase, the NDS-OM will serve the trading requirements of all Banks, Primary Dealers and Financial Institutions regulated by RBI that hold current NDS membership. Other NDS members will be extended access in the next phase, as appropriate. The option of extending NDS-OM to non-NDS members will be examined in due course. The system will be purely order driven with all orders being matched based on strict price/time priority. The system will be an anonymous order matching system wherein identity of parties is not revealed before or at the time of trade. The Clearing Corporation of India Limited (CCIL) will become the central counterparty to each trade done on the system. The system will allow straight-through processing (STP) and trades executed will flow straight to CCIL in a ready-for-settlement stage. (vii) The system will provide functionalities for order management (placing, modifying or canceling orders), trade related queries, activity log, market information and analytics. (viii) The system, to start with, will support dealing in all Central Government and State Government securities for T+1 settlement. The system will be further upgraded later to facilitate trading in discounted instruments like Treasury Bills. The Reserve Bank will disseminate information on trades done on the NDS-OM on a near real-time basis, in addition to the dissemination of information on other NDS trades as is being done currently, on its website, www.rbi.org.in G. Raghuraj Deputy General Manager Press Release: 2005-2006/129 TOP

Investment portfolio of banks Transactions in securities Role of brokers

RESERVE BANK OF INDIA CENTRAL OFFICE DEPARTMENT OF BANKING OPERATIONS AND DEVELOPMENT CENTRE - 1, WORLD TRADE CENTRE CUFFE PARADE, COLABA, MUMBAI - 400 005

DBOD.FSC.BC.No. 39 /24.76.002/2000 October 25 , 2000 All Scheduled Commercial Banks(excluding RRBs) Dear Sir, Investment portfolio of banks Transactions in securities Role of brokers______________ Please refer to our circulars DBOD No.FSC.BC.129/24.76.002/94-95 dated November 16, 1994 and DBOD.No.FSC.BC.112/24.76.002/97 dated October 14, 1997 in terms of which banks are permitted to undertake transactions in securities among themselves or with non-bank clients through members of the National Stock Exchange and OTC Exchange of India, respectively. It has since been decided to permit banks to undertake transactions in securities among themselves or with non-bank clients through the members of The Stock Exchange, Mumbai (BSE) in addition to the National Stock Exchange and OTC Exchange of India. In case any transactions in securities are not undertaken on the NSE, OTC Exchange of India or The Stock Exchange, Mumbai (BSE) the same should be undertaken by banks directly without the use of brokers. Banks should ensure that all instructions contained in paragraph 11.7 of Manual of Instructions Vol.I-Part I as regards engagement of brokers for investment transactions are strictly adhered to while undertaking transactions in securities among themselves or with non-bank clients through the members of the Stock Exchange, Mumbai. It may be noted that any violation or circumvention of the instructions will invite penal action against banks which could include raising of reserve requirements, withdrawal of refinance from the Reserve Bank and denial of access to money market as also such other penalty under the provisions of the Banking Regulation Act, 1949, as the Reserve Bank may deem fit. Accordingly, Note (i) of paragraph 11.7(ii) of the Manual of Instructions Vol.-I Part I may be replaced as per slip attached. Please acknowledge receipt.

Yours faithfully, (P.V. Subba Rao) Chief General Manager [Chapter II Manual of Instructions Vol.-I Part I Issued by DBOD, DBS and IECD(FSC.BC. 39 of 2000)] Paragraph 11.7(ii) Note (i) Banks may undertake transactions in securities among themselves or with non-bank clients through members of the National

Stock Exchange (NSE), OTC Exchange of India and The Stock Exchange, Mumbai (BSE) wherein the transactions are transparent. In case any transactions in securities are not undertaken on the NSE, OTC Exchange of India or The Stock Exchange, Mumbai (BSE) the same should be undertaken by banks directly without the use of brokers. TOP

Securities Transactions Permission to transact through The Stock Exchange, Mumbai

IDMC. PDRS. PDS. No PDS-2 /03.64.00/2000-01 November 13, 2000 All Primary Dealers in the Government Securities Market Dear Sir, Securities Transactions Permission to transact through The Stock Exchange, Mumbai Please refer to our circular IDMC.No.PDRS/2049A/03.64.00/99-2000 dated the 31st Dec 1999, on Guidelines on Securities Transactions to be followed by Primary Dealers. Currently only transactions through members of the National Stock Exchange and OTC Exchange of India are permitted. Henceforth, Primary Dealers may also undertake transactions among themselves or with clients through the members of the Stock Exchange, Mumbai, in addition to the NSE and OTCEI. In case any transactions are not undertaken on the NSE, OTC Exchange of India or The Stock Exchange, Mumbai, the same should be undertaken directly without the use of brokers. Please note that all instructions contained in Part A para 8 and Part B para 6 of our Circular under reference relating to transactions through brokers should be strictly adhered to. Any violation or circumvention of the instructions will invite penal action including withdrawal of liquidity support, denial of access to money market and any other penalty the Reserve Bank may deem fit. Please acknowledge receipt. Yours faithfully (Usha Thorat) Chief General Manager in-Charge TOP

Investment Portfolio - Transactions in Securities - Role of Brokers

Ref DBS.FID No. C 10 / 01.08.00 / 2000-01 22 November, 2000 The Chairmen / Chief Executives of All India Term Lending & Refinance Institutions Dear Sir, Investment Portfolio - Transactions in Securities - Role of Brokers Please refer to our Circular DBS.FID. No.23/01.08.00/97-98 dated 20 January 1998, on the captioned subject forwarding therewith a copy of circular No. FCS.BC.112/24.76.002 dated 14th October 1997 issued by our Department of Banking Operations and Development (DBOD). We now enclose a copy of the Circular DBOD.FCS.BC No. 39/24.76.002/2000 dated 25th October 2000 issued by our DBOD permitting banks to undertake transactions in securities among themselves or with non-bank clients through the members of 'The Stock Exchange, Mumbai (BSE)' in addition to National Stock Exchange and OTC Exchange of India. FIs may take note of the instructions and implement them wherever applicable. Please acknowledge receipt. Yours faithfully, ( K.C.Bandyopadhyay ) Chief General Manger