What changed
The HTM limit for standalone Primary Dealers was increased from 100% to 200% of their audited net owned funds as of end-March of the previous financial year. Additionally, PDs are permitted one extra transfer of securities to the HTM category for the current quarter.
What it means for you
This move gives standalone PDs more flexibility to hold government securities without marking them to market, reducing P&L volatility amid yield swings. It helps PDs manage their bond portfolios more comfortably during turbulent market conditions.
What you must do
- Update internal HTM classification limits to reflect the new 200% of audited NOF threshold.
- Plan for the one-time additional transfer to HTM this quarter, ensuring compliance with other existing terms.
- Monitor market yield movements to optimize the use of the expanded HTM headroom.
Who it affects
Standalone Primary Dealers, Treasury departments of PDs, RBI's Financial Markets Regulation team
What is the new HTM limit for standalone PDs?
The limit is increased to 200% of the audited net owned funds as at end-March of the preceding financial year, up from 100%.
Is this change permanent?
No, it is effective until further notice, based on current market conditions.
Can PDs transfer additional securities to HTM this quarter?
Yes, one additional transfer to HTM is allowed for the current quarter.