ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Can Primary Dealers Replace RBI in Security Issues?

With the RBI now prohibited from participating in the primary issues of government securities, the management of liquidity has become a more delicate and complex task. In this context, the RBI has sought to expand the role of the primary dealers of securities; this is in the right direction but it may prove insufficient. The entire edifice that is being constructed for the PDs is on shaky ground. The PDs are highly vulnerable to market conditions wherein, for instance, a rising interest rate situation may wipe out the entire net worth.

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