RBI/2009-10/391
RPCD.RRB.BC.No.68 /03.05.34/2009-10

April 9, 2010

The Chairman
All Regional Rural Banks/Sponsor Banks

Dear Sir,

Investment in SLR Securities by
Regional Rural Banks (RRBs)

Please refer to our circular RPCD.RRB.BC.No.94/03.05.34/2008-09 dated March 26, 2009 on the above subject.

2. On a review of the issue it has been decided that the exemption granted to RRBs up to the financial year 2008-09 from 'mark to market' norms in respect of their investments in SLR securities be extended by one more year i.e. for the financial year 2009-10. Accordingly, RRBs will have the freedom to classify their entire investment portfolio of SLR securities under 'Held to Maturity' for the financial year 2009-10 with valuation on book value basis and amortisation of premium, if any, over the remaining life of securities.

Yours faithfully,

(A.K.Pandey)
General Manager