What changed
RBI issued a master circular consolidating all existing operational guidelines for Primary Dealers (PDs) issued up to June 30, 2011, replacing multiple earlier circulars. It includes separate sections for standalone PDs and banks undertaking PD business departmentally. Capital adequacy and risk management guidelines for standalone PDs are covered in a separate master circular.
What it means for you
Banks and standalone PDs now have a single reference document for operational rules, reducing compliance complexity. Banks doing PD business departmentally must follow bank-specific capital adequacy norms, not the standalone PD rules. The circular reinforces RBI's oversight of G-Sec market infrastructure and PD conduct.
What you must do
- Review the master circular to ensure all PD operations comply with consolidated guidelines.
- For banks with PD departments, apply bank-specific capital adequacy and risk management rules as per existing RBI guidelines.
- Submit required returns (PDR-I, II, IV, etc.) to IDMD as per formats in annexes.
- Adhere to prudential norms on investment, trading, and corporate governance outlined in the circular.
Who it affects
Standalone Primary Dealers (8 as of June 30, 2011), Banks authorized to undertake PD business departmentally (13 as of June 30, 2011), RBI's Internal Debt Management Department (IDMD)
Does this master circular apply to all PDs, including banks?
Yes, it applies to both standalone PDs and banks doing PD business departmentally. Section I covers all PDs, while Section II has additional rules for bank-PDs.
Where can I find capital adequacy rules for standalone PDs?
Capital adequacy and risk management guidelines for standalone PDs are in a separate master circular (IDMD.PDRD.02/03.64.00/2011-12 dated July 1, 2011). Banks follow their own existing capital adequacy norms.
What returns must PDs submit under this circular?
PDs must submit returns like PDR-I, PDR-II, PDR-IV, and others as specified in Annexes II-A, II-B, and II-C to IDMD. Formats are provided in the circular.