A further review of non-SLR investments in the light of recent developments reveals that the ease of mobilising funds through privately placed debt issues could lead to the use of such funds for risky purposes other than what is disclosed in the offer document.
In order to contain the risks arising out of non-SLR investment portfolio of banks and FIs, in particular through the private placement route, it was proposed by the RBI to issue further prudential guidelines to be observed by banks. The draft guidelines were circulated to the banks and FIs in October 2001.