Certificates of Deposit are issued by scheduled commercial banks and select financial institutions in India, as the Reserve Bank of India (RBI) permits. Individuals, companies, corporations, and funds, among others, receive Certificates of Deposit. Non-Resident Indians can also receive Certificates of Deposits, but only non-repatriable. It is vital to note that banks and financial organisations cannot make loans secured by certificates of deposit. Furthermore, banks cannot purchase their Certificates of Deposits before their maturity. HOWEVER, the RBI may relax the regulations mentioned above for a limited time. It's worth noting that banks must maintain the statutory liquidity ratio (SLR) and cash reserve ratio (CRR) on Certificate of Deposit prices.
Banks and financial organisations should only issue dematerialized Certificates of Deposit. According to the Depositories Act of 1996, investors can also request a certificate in tangible form. If an investor requests a certificate in physical form, a bank notifies the Reserve Bank of India's Financial Markets Department in Mumbai. A Certificate of Deposit also comes with stamp duty fees. Because Certificates of Deposit are physically transferable, banks should guarantee that they are printed on high-quality paper. Two or more signatories must sign a Certificate of Deposit (authorized).
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About Author:Aman is working in the domain of Investment management in one of the top universities. He has published research papers and case studies in Investment and Fixed Deposit marketplace. He is an avid blogger in the domain of Investment management. you can also find him on social networking platforms. Archives
August 2022
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