RBI introduces Separate Trading of Registered Interest and Principal of Securities in State Government Securities

Reserve Bank of India (RBI) has announced that it has been decided to introduce Separate Trading of Registered Interest and Principal of Securities (STRIPS) in State Government Securities (SGS). This will be in addition to stripping/reconstitution already permitted since April 1, 2010 in eligible Central Government dated securities. The related notification dated May 29, 2025, published in the Official Gazette, is enclosed.

All fixed coupon securities issued by State Governments/Union Territories having a residual maturity of up to 14 years and minimum outstanding of ₹1,000 crore as on the day of stripping, provided that such securities are reckoned as eligible investment for the purpose of meeting Statutory Liquidity Ratio (SLR) requirements and are transferable.

Market Participants having an SGL account with the Reserve Bank can place requests directly in Reserve Bank of India Core Banking Solution (e-Kuber system) for stripping / reconstitution. Request for stripping / reconstitution by Gilt Account Holders shall be placed with their respective custodians maintaining the CSGL account with the Reserve Bank and the custodians, in turn, will place the request on behalf of their constituents in e-Kuber.

ISIN and nomenclature for STRIPS in SGS, will be similar to STRIPS in Central Government dated securities.

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