RBI's own words: “The present guidelines shall supercede all existing instructions issued to standalone PDs in this regard.” — RBI/2013-14/541
Source: Reserve Bank of India · RBI/2010-11/18 · issued 01 Jul 2010 · ~1 min read
Quick answerRBI has clarified that the NBFC prudential norms on credit/investment concentration limits apply to all standalone Primary Dealers. Investments in debentures will be treated as credit. PDs exceeding limits must comply within three months.
The rule, in the simplest words
Standalone Primary Dealers (PDs) must follow the same rules as NBFCs (Non-Banking Financial Companies) for how much they can lend or invest in one person or group.
When checking these limits, buying debentures (a type of loan to a company) counts as giving a loan, not as an investment.
If a PD has too much money tied up in one borrower or group, they have three months to fix it.
How it plays out — a real example
A treasury officer in Indore, who works for a standalone Primary Dealer, reviews their portfolio and finds they have lent too much to a single corporate group through debentures. Remembering the new rule, she reclassifies those debentures as credit, which pushes the exposure over the limit. She then works with her team to reduce that exposure within the three-month window to stay compliant.
What changed
RBI clarified that the prudential norms for non-deposit taking NBFCs, specifically the concentration limits on credit/investment to a single borrower or group, apply to all standalone Primary Dealers. Additionally, investments in debentures are now to be treated as credit for the purpose of these limits.
What it means for you
Standalone Primary Dealers must now adhere to the same concentration norms as NBFCs, capping exposure to single or group borrowers. Treating debenture investments as credit tightens the effective limit, requiring PDs to reassess their portfolios. Those currently exceeding limits have a three-month window to adjust.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Review your current credit and investment exposures against the single/group borrower limits prescribed for NBFCs.
Reclassify debenture investments as credit for compliance calculations.
If exposures exceed limits, prepare a reduction plan to comply within three months from the circular date.
Update internal risk management and reporting systems to reflect the new classification.
Who it affects
Standalone Primary Dealers, NBFCs (non-deposit taking) as reference entities
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the key change for Primary Dealers?
RBI has explicitly stated that the prudential norms on credit/investment concentration limits, originally for NBFCs, now apply to all standalone Primary Dealers. This includes treating debenture investments as credit.
How long do PDs have to comply if they exceed limits?
Primary Dealers with investment concentration above the prescribed norms must bring them down to the required level within three months from the date of the circular.
Are debentures treated as credit or investment under these norms?
For the purpose of the concentration limits, investments in debentures are to be treated as credit, not investment.
📜 This document’s life story (2 recorded events, each backed by RBI’s own words)
RBI’s words: “The present guidelines shall supercede all existing instructions issued to standalone PDs in this regard.”
📜 Read the original circular — full text as issued by RBI
RBI/2010 -11/142
IDMD.PDRD.No. 19 / 03.64.00 / 2010-11
July 27, 2010
All Standalone Primary Dealers
Dear Sir
Applicability of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 to Primary Dealers
Please refer to the notification DNBS.193 DG(VL)-2007 dated February 22 , 2007 updated till June 30, 2010 and issued vide the circular RBI/2010-11/18 DNBS (PD) CC No.178/03.02.001/2010-11 dated July 1, 2010 on Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 . In terms of paragraph 18 of the Notification, all the non-deposit taking non-banking financial companies shall adhere to the specific regulations limiting concentration in credit / investment to a single borrower or group of borrowers in a company. Further, as per Note 2 to the paragraph 18 of the Notification, the investments in debentures for the purposes specified in this paragraph shall be treated as credit and not investment.
2. In this context, it is clarified that these guidelines are applicable to all the standalone PDs. PDs, which have investment concentration of more than the prescribed norms, may bring down their investments to the prescribed level within three months from the date of the circular.
3. The above guidelines would be effective from the date of the circular.
Yours faithfully
(K.K.Vohra)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/18 · issued 01 Jul 2010. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5908&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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