DATED GOVERNMENT SECURITIES

WHAT ARE DATED GOVERNMENT SECURITIES? 

 Dated Government Securities are longer term securities and carry a fixed or floating coupon (interest rate) paid on the face value, payable at fixed time periods (usually half-yearly). 

 The Public Debt Office (PDO) of the RBI acts as the registry/depository of Government securities and deals with the issue, interest payment and repayment of principal at maturity. 

 Most of the dated securities are fixed coupon securities. 

 The nomenclature of a typical dated fixed coupon Government security has the following features- coupon, name of the issuer, maturity and face value.

DIFFERENT TYPES OF GOVERNMENT DATED SECURITIES 

 Zero Coupon Bonds 

 Floating Rate Bond 

 Tap Stock 

 Partly Paid Stock 

 Capital Indexed Bonds 

 Inflation linked Bonds 

 Fixed Rate Bonds

CONVERSION OF DEBT INTO EQUITY- REVIEW

WHAT WAS THE NOTIFICATION? 

 On a review of the limit imposed on shareholding of the post converted equity of the borrower company under reconstruction by Asset Reconstruction Companies (ARCs), it has been decided to exempt ARCs from the cap of 26% subject to compliance with the provisions of the SARFAESI Act, 2002, Guidelines/ Instructions issued by Reserve Bank of India from time to time as applicable to ARCs as well as Foreign Exchange Management Act, 1999, Reserve Bank of India Act, 1934, Companies Act, 2013, SEBI Regulations and other relevant Statutes. 

 The extent of shareholding post conversion of debt into equity shall be in accordance with permissible Foreign Direct Investment (FDI) limit for that specific sector. 

ARCs that meet the conditions mentioned below are exempted from the limit of shareholding at 26% of post converted equity of the borrower company: 

1. The ARC shall be in compliance with Net Owned Fund (NOF) requirement of Rs 100 crore on an ongoing basis; 

2. At least half of the Board of Directors of the ARC comprises of independent directors; 

3. The ARC shall frame policy on debt to equity conversion with the approval of its Board of Directors and may delegate powers to a Committee comprising majority of independent directors for taking decisions on proposals of debt to equity conversion;

4. The equity shares acquired under the scheme shall be periodically valued and marked to market. The frequency of valuation shall be at least once in a month.