Mumbai, Nov. 13 -- Reserve Bank of India (RBI) has announced to allow municipal debt securities as eligible collateral in repo transactions. This would allow banks to now borrow or lend money using municipal bonds as collateral. The Central Government has specified the Municipal Debt Securities, to be as security under the said section for the purposes of "repo" and "reverse repo" vide notification dated October 22, 2025 in the Official Gazette. Accordingly, directions are being updated to include Municipal Debt Securities as eligible securities for repo transactions, RBI noted.

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