‘Gilts’ is the short form for gilt-edged securities- so called because they carry no risk. Gilt Account Holder (GAH)/Constituent means an entity or a person including ‘a person resident outside India’ maintaining a “Gilt Account” with a Custodian.[“Custodian” is a primary member (PM) permitted by the Reserve Bank of India to open and maintain Constituent Subsidiary General Ledger Account with the Public Debt Office].
The GAHs permitted by RBI include NBFCs, Provident Funds, Pension Funds, Mutual Funds, Insurance Companies, Cooperative Banks, Regional Rural Banks, Trusts, Corporates, and Individuals etc. who are non-NDS members. A GAH is entitled to open only one Gilt Account having a unique account number with any of the Custodians. A declaration to that effect must be submitted by GAH to the Custodian and a copy thereof may be submitted to the RBI (Public Debt office, Mumbai). A GAH may also maintain a demat account with the Depositories through Depository Participant (DP) for facilitating retail trading in Government Securities through Stock Exchanges.
The Gilt Account Holder (GAH) is permitted to maintain a fund account with its Custodians or designate a fund account with a bank other than the Custodian specifically for settlement of Government Securities transactions, by making available all the details of the designated fund account to the Custodian. The Gilt Accounts are opened/maintained by Custodian shall satisfy the eligibility conditions for holding Government securities as specified in the General Notifications F.No. 4(9)-W&M/ 2000 dated 6th May 2002 and announcements by the RBI relating to investments by Foreign Institutional Investors (FIIs).
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