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RBI enforces paperless trade in govt bonds

The Reserve Bank of India said on Monday all entities it regulates must hold government bonds in the electronic form either in an account with it or with depositories.

The banking regulator has further barred non-paperless trade by these entities with brokers with immediate effect.

The Reserve Bank of India said in statement this was "in the light of recent fraudulent transactions in the guise of government securities transactions in physical format by a few co-operative banks with the help of some broker entities."

Five co-operative banks have lost Rs 910 million due to an alleged government bonds scandal, which came to light a month ago.

The RBI regulates financial institutions, banks, cooperative banks, regional rural banks, local area banks, and financial services companies.

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