RBI/2010-11/373
UBD. (PCB).Cir. No. 34/09.80.00/2010-11

January 18, 2011

The Chief Executive Officers of
All Primary (Urban) Co-operative Banks

Dear Sir,

Accounting Procedure for investments – Settlement Date Accounting

Please refer to Circulars UBD(PCB)/Cir.49/09.80.00/2004-05 dated June 20, 2005 on ready forward contracts in Government Securities and UBD(PCB) Cir 50/09.80.00/2004-05 on the same date on settlement of transactions in Government Securities.

2. It has been observed that there is no uniformity in the practice adopted by banks while accounting for investments in Government Securities i.e. they are accounted for either on “Trade Date” or the “Settlement Date”. Hence, with a view to bringing in uniformity, it has been decided that banks should follow “Settlement Date” accounting for recording both outright and ready forward purchase and sale transactions in Government Securities.

3. These instructions will be applicable with immediate effect.

Yours faithfully,

(Uma Shankar)
Chief General Manager