Master Circular – Operational Guidelines to Primary Dealers


 RBI Ref No: RBI/2012-13/106 IDMD.PDRD.01/03.64.00/2012-13

 Applicable to : All Primary Dealers



The Reserve Bank of India has, from time to time, issued a number of guidelines/instructions to the Primary Dealers (PDs) in regard to their operations in the Government Securities Market and other activities. The Master Circular incorporating the guidelines/instructions/circulars up to 30/06/2012, is available here.

 The Annexure contains the references to the various circulars mentioned in the Master Circular.

 Primary Dealers can be divided broadly into two categories – Departments of Banks undertaking PD Business/Stand Alone PD’s.



As on June 30, 2012, there are eight standalone PDs and thirteen banks authorized to undertake PD

business departmentally.


The concept of Primary Dealers(PDs) in the the Government Securities (G-Sec) Market, was introduced by RBI in 1995.

 RBI in 2006-07, permitted Banks to set up departments for PD activity.

 The objectives of PD System: –


i. Strengthen the infrastructure in G-Sec market in order to make it vibrant, liquid and broad


ii. Ensure development of underwriting and market making capabilities for G-Sec outside

the RBI;

iii. Improve secondary market trading system, which would contribute to price discovery,

enhance liquidity and turnover and encourage voluntary holding of G-Sec amongst a

wider investor base; and

iv. Make PDs an effective conduit for open market operations (OMO).



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