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Master Direction – Operational Guidelines for Primary Dealers

In 1995, the Reserve Bank of India (RBI) introduced the system of Primary Dealers (PDs) in the Government Securities (G-Sec) Market. The objectives of the PD system are to strengthen the infrastructure in G-Sec market, development of underwriting and market making capabilities for G-Sec, improve secondary market trading system and to make PDs an effective conduit for open market operations (OMO). As on June 30, 2015, there are seven standalone PDs and thirteen banks authorized to undertake PD business departmentally.

Master Direction – Operational Guidelines for Primary Dealers

RBI/IDMD/2016-17/29
Master Direction IDMD.PDRD.01/03.64.00/2016-17

Dated: July 1, 2016

All Primary Dealers

Dear Sir / Madam

Master Direction – Operational Guidelines for Primary Dealers

The Reserve Bank of India has, from time to time, issued a number of guidelines/instructions to the Primary Dealers (PDs) with respect to their operations. The Master Direction enclosed incorporates the updated guidelines/instructions/circulars on the subject. A list of circulars finding reference in this Master Direction is enclosed in Annex-XIV and XV. The Direction will be updated from time to time as and when fresh instructions are issued. This Master Direction has been placed on RBI website at www.rbi.org.in.

2. The banks undertaking PD activities departmentally should follow the extant guidelines applicable to the banks on capital adequacy requirements and risk management.

Yours faithfully

(A. Mangalagiri)
Chief General Manager

Encl: As above

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