SGL or CSGL are a demat form of holding government securities with the RBI. SGL stands for ‘Subsidiary General Ledger’ account. It is a facility provided by RBI to large banks and financial institutions to hold their investments in Government securities and Treasury bills in the electronic book-entry form. Such institutions can settle their trades for securities held in SGL through a Delivery-versus-Payments (DVP) mechanism which ensures movement of funds and securities simultaneously.
As all investors in Government securities do not have an access to the SGL accounting system, the RBI has permitted such investors to hold their securities in physical stock certificate form. The RBI, being the R&T agent of all Government securities issued by Central and State Governments, keeps the records of holding of various investors in the securities issued. The SGL, in short keeps the names of all investor in a particular security at any point of time. The securities are held in electronic form in SGL accounts. They may also open a Constituent SGL account with any entity authorised by the RBI for this purpose and thus avail of the DVP settlement. Such client accounts are referred to as Constituent SGL accounts. Securities kept on behalf of customers by banks or PDs in Constituent SGL account are kept in a segregated CSGL A/c with the RBI. Thus, if the bank or the PD buys security for his client, it gets credited to the CSGL account of bank or PD with the RBI. Successful bidders are allotted securities bid by them. The RBI can debit their current accounts for amount payable and credit their SGL account with the securities allotted to them. The amount debited to the current account is placed to the credit of Government Account. In the same manner secondary market operations are also handled by the RBI.
