Municipal Debt Securities Eligible for RBI Repo Operations Under RBI Act

  • Blog|News|FEMA & Banking|
  • < 1 minute
  • By Taxmann
  • |
  • Last Updated on 25 October, 2025

Latest from Taxmann

Municipal Debt Securities
Notification S.O. 4830(E), Dated: 22.10.2025

1. Notification on Municipal Debt Securities

The Ministry of Finance has issued a notification specifying that Municipal Debt Securities are recognised for certain financial operations under the Reserve Bank of India (RBI) framework.

2. Definition of Municipal Debt Securities

Municipal Debt Securities are defined under the Securities and Exchange Board of India (SEBI) Act or related rules and regulations. These securities are typically issued by municipal authorities to raise funds for infrastructure and development projects within their jurisdiction.

3. Purpose of the Notification

The notification clarifies that these Municipal Debt Securities can be used as eligible securities for repo and reverse repo transactions. This aligns municipal financing instruments with the liquidity management framework of the RBI.

4. Reference to RBI Act

Under Section 45U of the RBI Act, 1934, certain securities can be used as collateral in repo and reverse repo operations conducted by the RBI. By including Municipal Debt Securities, the notification expands the range of instruments available for liquidity support in the financial system.

5. Implications for Market Participants

  1. Banks and Financial Institutions – Can now use Municipal Debt Securities for short-term borrowing and lending with the RBI, enhancing liquidity management.
  2. Municipal Corporations – Benefit from improved marketability of their debt securities, potentially lowering borrowing costs.
  3. Investors – Gain confidence in the credibility and acceptability of these securities as they are recognised under the RBI framework.
Click Here To Read The Full Notification

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied