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Our Bureau

Mumbai, Sept. 2 The Reserve Bank of India has decided to hike the minimum net-owned funds (NOF) of standalone primary dealers by three times from Rs 50 crore to Rs 150 crore. It has also increased the limit on borrowings by the PDs from the call/notice money market from 200 per cent of their NOF to 225 per cent of NOF.

The twin notifications issued on Wednesday, coupled with the earlier one that allowed PDs to transfer government securities to the HTM bucket every quarter, is aimed at facilitating the Government’s large borrowing programme, said primary dealers.

While the higher level of NOF requirement for PDs will be effective from April 1, 2010, the increased borrowing limits will come into effect immediately.

For primary dealers intending to diversify into other permissible activities, the minimum NOF limit has been raised from Rs 100 crore to Rs 250 crore.

More Stories on : RBI & Other Central Banks | Credit Market

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