What changed
RBI issued a master circular consolidating all existing guidelines/instructions for Primary Dealers up to June 30, 2013, replacing earlier circulars. It includes a separate section (Section II) with additional guidelines for banks that undertake PD business departmentally. The circular also references a separate master circular on capital adequacy and risk management for standalone PDs.
What it means for you
Banks and standalone PDs now have a single reference document for operational compliance, reducing ambiguity. Banks doing PD business departmentally must follow bank-specific capital adequacy and risk management rules, while standalone PDs follow separate guidelines. This consolidation streamlines regulatory oversight and ensures uniform application of rules across the PD system.
What you must do
- Review the master circular and ensure your PD operations comply with all consolidated guidelines.
- For banks with departmental PD business, align capital adequacy and risk management with existing bank-level norms.
- Submit all required returns (as per Annexes II-A, II-B, II-C) to RBI in the prescribed formats.
- Update internal policies to reflect the consolidated instructions and train relevant staff on changes.
Who it affects
All Primary Dealers (standalone and bank-PDs), Banks undertaking PD business departmentally, RBI departments overseeing PD operations
Does this master circular change any existing rules for Primary Dealers?
No, it consolidates all existing guidelines issued up to June 30, 2013, into one document. No new rules are introduced; it simply provides a single reference point.
Are capital adequacy requirements for bank-PDs covered in this circular?
No, this circular states that banks doing PD business departmentally must follow the extant capital adequacy guidelines applicable to banks. Standalone PDs have a separate master circular on capital adequacy and risk management.
What should a bank-PD do to comply with this circular?
Ensure your PD operations adhere to the consolidated guidelines, maintain separate books and accounts as per Section II, and submit the required returns to RBI in the specified formats.