Master Direction – Reserve Bank of India (Repurchase Transactions (Repo)) Directions, 2025

RBI/FMRD/2025-26/142
FMRD.DIRD.04/14.03.038/2025-26
November 11, 2025

To
All participants in repo market

Dear Sir/Madam

Master Direction – Reserve Bank of India (Repurchase Transactions (Repo)) Directions, 2025

Please refer to the Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 dated July 24, 2018, as amended from time to time.

2. The Central Government in exercise of the powers conferred by clause (e) of section 45U of the Reserve Bank of India Act, 1934 (2 of 1934), has specified the Municipal Debt Securities, having the meaning assigned to it in the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the rules or regulations made thereunder, to be as security under the said section for the purposes of “repo” and “reverse repo” vide notification dated October 22, 2025 in the Official Gazette.

3. Accordingly, the aforesaid Directions are being updated to include Municipal Debt Securities as eligible securities for repo transactions. The Master Direction – Reserve Bank of India (Repurchase Transactions (Repo)) Directions, 2025, have been issued today and are enclosed herewith.

4. These Directions have been issued by the Reserve Bank in exercise of the powers conferred under section 45W of the Reserve Bank of India Act, 1934, read with section 45U of the Act and of all the powers enabling it in this behalf.

5. These Directions shall be applicable with immediate effect.

Yours faithfully

(Dimple Bhandia)
Chief General Manager

RESERVE BANK OF INDIA
FINANCIAL MARKETS REGULATION DEPARTMENT
9th FLOOR, CENTRAL OFFICE BUILDING, FORT
MUMBAI 400 001

Notification No. FMRD.DIRD.05/14.03.038/2025-26 dated Nov 11, 2025

Master Direction – Reserve Bank of India (Repurchase Transactions (Repo)) Directions, 2025

In exercise of the powers conferred by section 45W of the Reserve Bank of India Act, 1934 (RBI Act) and of all the powers enabling it in this behalf, the Reserve Bank of India (the Reserve Bank) having considered it necessary in public interest and with a view to regulate the financial system of the country to its advantage, hereby issues the following directions to all the persons eligible to participate or transact business in market repurchase transactions (repos) in India.

1. Short title, commencement and applicability of the directions

(1) These Directions shall be called as the Master Direction – Reserve Bank of India (Repurchase Transactions (Repo)) Directions, 2025 and shall supersede all other directions issued on the subject and covered by these regulations. These Directions shall come into force with immediate effect.

(2) These Directions shall be applicable to repurchase transactions (Repo), undertaken on recognized stock exchanges, electronic trading platforms (ETP) and Over-the-Counter (OTC) to the extent stated herein. In case of exchange traded repurchase transactions (Repo), procedure for execution and settlement of trades shall be in accordance with the rules and regulations issued by the recognized stock exchange/Securities and Exchange Board of India (SEBI).

(3) These Directions shall not apply to repo/ reverse repo transactions under the Liquidity Adjustment Facility and the Marginal Standing Facility, which would continue to be regulated as per the existing regulations.

2. Definitions

(1) In these Directions, unless the context otherwise requires-

• (a) “Corporate bonds and debentures” mean non-convertible debt securities issued in India which create or acknowledge indebtedness, including (i) debentures (ii) bonds (iii) commercial papers (iv) certificate of deposits and such other securities of a company, a multilateral financial institution (MFI) or a body corporate constituted by or under a Central Act or a State Act, whether constituting a charge on the assets of the company or body corporate or not, but does not include debt securities issued by Central Government or a State Government, or such other persons as may be specified by the Reserve Bank, security receipts and securitized debt instruments.
• (b) “Commercial Paper (CP)” is an unsecured money market instrument issued in the form of a promissory note. The original tenor of a CP shall be between seven days to one year.
• (c) “Certificate of Deposit (CD)” is a negotiable money market instrument and issued in dematerialized form or as a Usance Promissory Note against funds deposited at a bank or other eligible financial institution for a specified time period.
• (d) “Debt ETF” is an exchange traded fund that invests only in eligible securities specified in para 3(1) of these directions.
• (e) “Delivery versus Payment (DvP)” is a settlement mechanism which stipulates that transfer of funds from the buyer of securities is made simultaneously with the transfer of securities by the seller of securities.
• (f) “Government securities” shall have the same meaning as defined in Section 2(f) of the Government Securities Act, 2006.
• (g) “Haircut” is the difference between the market value of the collateral and the amount borrowed/lent against that collateral.
• (h) “Listed corporate” means a company or firm whose shares and (or) debt are listed and traded on a recognized stock exchange/s.
• (i) “MFIs” are multilateral financial institutions in which Government of India is a member.
• (j) “Municipal Debt Securities” shall have the same meaning as assigned to it in the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the rules or regulations made thereunder.
• (k) “Recognized stock exchange” shall have the same meaning as defined in Section 2 (f) of Securities Contracts (Regulation) Act, 1956 (42 of 1956).
• (l) “Regulated entity” means any person, other than an individual or HUF, whose business activities are being regulated by any one of the financial regulators in India viz., Reserve Bank of India, Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), Pension Fund Regulatory and Development Authority (PFRDA), National Housing Bank (NHB) and National Bank for Agriculture and Rural Development (NABARD).
• (m) “Related entity” of a company or a firm means any company or firm which is (i) a holding, subsidiary or an associate company of such company; or (ii) a subsidiary of a holding company to which it is also a subsidiary. The holding, subsidiary and associate company shall have the same meaning as defined in Companies Act, 2013.
• (n) “Repo” shall have the same meaning as defined in Section 45U (c) of RBI Act, 1934.
  “Reverse Repo” shall have the same meaning as defined in Section 45U (d) of RBI Act, 1934.
  Explanation: A ‘repo’ transaction by an entity is ‘reverse repo’ transaction for the counterpart entity. For the purpose of these Directions, the word ‘repo’ is used to mean both ‘repo’ and ‘reverse repo’ with the appropriate meaning applied contextually.
• (o) “Securitized debt instrument” means securities of the nature referred to in sub-clause (ie) of clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956).
• (p) “Security Receipts” means a security as defined in clause (zg) of section 2 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002).
• (q) “Tri-party repo” means a repo contract where a third entity (apart from the borrower and lender), called a Tri-Party Agent, acts as an intermediary between the two parties to the repo to facilitate services like collateral selection, payment and settlement, custody and management during the life of the transaction.

(2) The words and expressions used, but not defined in these Directions, shall have the meaning assigned to them in the Reserve Bank of India Act, 1934, or in any other Master Circular/Notification/Direction issued by the Reserve Bank, unless anything is stated by the Reserve Bank to the contrary.