Unfortunately, no…
G-Secs used to be a good option for the Cash component part, but after they removed some long-dated securities out of nowhere earlier in the year, I don’t bother with them anymore.
The main reason behind this happening is that NCL (NSE Clearing Limited, aka the Clearing Corporation) has stopped accepting these securities as collateral from 1st March 2024. This can be verified by checking the exchange’s circular regarding the same (circular link - Annexure 4)
This has not only impacted those 2 securities. If you check the previous month’s circular (circular link , Annexure 4) and compare it with the current month’s circular, the following G-Secs have been removed -
S.No.
ISIN
Security Description
Maturity Date
1
IN0020190024
7.62% G.S. 2039
15-Sep-39
2
IN0020100031
8.30% G.S. 2040
02-Jul-40
3
IN0020110063
8.83% G.S. 2041
12-Dec-41
4
IN0020120062
8.30% G.S. 2042
31-Dec-42
5
IN0020190040
7.69% G.S. 2043
17-Jun-43
6
IN0020130079
9.23% G.S. 2043
23-Dec-43
7
IN0020150044
8.13% G.S. 2045
22-Jun-45
8
IN0020160068
7.06% G.S. 2046
10-Oct-46
9
IN0020190032
7.72% G.S. 2049
15-Jun-49
10
IN0020200054
7.16% G.S. 2050
20-Sep-50
11
IN0020200252
6.67% G.S. 2050
17-Dec-50
12
IN0020160092
6.62% G.S. 2051
28-Nov-51
We had reached out to the CC regarding this matter and we got a reply that these securities no longer form part of securities eligible for pledging at the CCIL level and hence have been removed by NCL as well. The CCIL list is available at this link (which also has these securities removed). Will update here with the exact criteria that were violated that caused these securities to be removed.
Having said that, if you’re planning it for the long-term, maybe you could look at Gilt ETFs and Gilt Mutual Funds. But who knows, in the “interest of the retailers”, they might remove those too in the future…
Also, maybe diversify it across different AMCs, so that impact cost can be minimised.
1 Like