Regulatory caps on bank guarantees boost demand for fixed deposit receipts

Topics Fixed deposits | Banks

Regulatory caps on bank guarantees have spurred the demand for fixed deposit receipts (FDRs) — both fully and partially funded — as the go-to instrument for clearing members (CMs) to place as collateral with clearing corporations (CCs) for obtaining trading limits.   At present, CCs accept cash, FDRs, bank guarantees (BGs) and select securities as assets for providing margins. Until a few years ago, BGs were popular instruments. However, the exchanges imposed strict caps, limiting their use. The cap in case of some brokers is just Rs 50 crore. Also, banks have limits on .....

Key stories on are available to premium subscribers only.

Already a premium subscriber?

Subscribe to get an across device (Website, Mobile Web, Iphone, Ipad, and Android Phone applications) access to Premium content, Breaking News alerts, Industry Newsletters, Stock and Corporate news alerts, access to Archives and a lot more.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel