Value Free Transfer (VFT) of Government Securities – Guidelines

Last updated: 07 October 2021

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The Reserve Bank of India (RBI) has issued updated guidelines for the Value Free Transfer (VFT) of government securities. VFT allows for the transfer of securities between SGL/CSGL accounts without a payment in RBI's books. These revised guidelines aim to further streamline operations in the government securities market by clarifying eligible transactions, including those related to gifts, inheritance, inter-depository transfers, and margin requirements.

RBI/2021-22/108 IDMD.CDD.No.S930/11.22.003/2021-22 October 5, 2021 All SGL/CSGL Account holders Madam/Sir, Value Free Transfer (VFT) of Government Securities Guidelines A reference is invited toNotification No.78 dated November 16, 2018onValue Free Transfer (VFT) of Government Securities Guidelinesunder which separate guidelines for VFT were issued to enable more efficient operations in the Government securities market. On a review, it has been decided to issue revised Value Fr

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FAQ :

A Value Free Transfer (VFT) means transferring government securities from one SGL/CSGL account to another without any corresponding payment being made in the books of the RBI.

Eligible transactions include transfers due to gifts and inheritance, inter-depository transfers for investors and brokers, transfers from clearing corporations, mergers/demergers, changes in custodians for Foreign Portfolio Investors, own account transfers, and transfers related to margin requirements or collateral posting.

Yes, the RBI may grant permission for VFT for other purposes on a case-to-case basis. Applications should be submitted to the Public Debt Office, Mumbai Regional Office, RBI.

Eligible and permitted VFTs can be initiated through the RBI's e-Kuber system.

Yes, all VFTs undertaken are subject to a 100% concurrent audit by SGL/CSGL holders to verify that the transactions fall under the eligible categories.

Yes, these guidelines supersede earlier instructions on the subject matter, specifically Notification No. 78 dated November 16, 2018.

Notification No : RBI/2021-22/108 IDMD.CDD.No.S930/11.22.003/2021-22
Source : https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12175&Mode=0

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