MUMBAI, SEPT 8: The Reserve Bank of India (RBI) has issued a directive to banks against use of funds received from the mobilisation of Resurgent India Bonds (RIBs) for arbitraging between the money market and forex markets.The RBI, which had discussions with representatives of banks and financial institutions (FIs) on deployment of rupee resources available against RIBs to ensure that influx of liquidity does not disturb the domestic money and foreign exchange markets, has issued administrative instructions against misuse of these funds.
The RBI said rupee resources received against mobilisation of RIBs can be used by the concerned banks for meeting normal credit requirements.
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