Presentation on Monetary rates and government bond dealers.

1. Satyanarayan G
Mohit Momaya
Rates
Primary dealers
Satellite dealers

2. Cash Reserve Ratio
Cash Reserve Ratio is a specified minimum
fraction of the total deposits of customers,
which commercial banks have to hold as
reserves with the central bank.
Current CRR is 4.00% w.e.f 29/01/2013

3. Statutory Liquidity Ratio
Statutory liquidity ratio (SLR) is a reserve
requirement that the commercial banks in
India require to maintain in the form of gold,
cash or government approved securities
before providing credit to the customers.
Current SLR is 21.50% w.e.f 07/02/2015

4. Repo Rate
Repo rate is the rate at which the central bank
lends money to commercial banks in the
event of any shortfall of funds.
Current Repo Rate is 7.75% w.e.f 15/01/2015

5. Benefits/Features of Repo
 Interest Rate
 Contract
 Hedge tool
 Safety
 Participants
 Cash Management tool
 Period
 Liquidity control
 Liquidity adjustment facility

6. Reverse Repo Rate
Reverse repo rate is the rate at which the
central bank of a country borrows money from
commercial banks within the country.
Current Reverse Repo rate is 6.75% w.e.f
15/01/2015

7. Guidelines for Repo Accounting
 Legal Character
 Contract price
 Entry and exit
 Market making
 Coupon
 Agreement

8. Government bond dealers
 Primary Dealers
 Satellite Dealers

9. Primary Dealers
Banks and institutions that are used by RBI for
conducting the activities relating to secondary
market in Government Securities are called as
primary dealers

10. Objectives
 Broad Basing
 Developing capabilities
 Improved trading
 Open Market Operations(OMO)

11. Eligibility
 Subsidiaries of Scheduled commercial banks and
all-India financial institutions and companies
incorporated under the companies act, 1956.
 Agencies must be predominantly engaged in
securities business, with a minimum net worth of
Rs. 50 crores

12. Roles and Obligations
 Bidding
 Underwriting
 Offering quotes
 Achieving turnover
 Maintaining Capital Adequacy Standards(CAS)

13. RBI Facilities
 Account Access
 Market Access
 OMO Access

14. Liquidity Support
 Repos
 SGL Accounts
 Advances
 Liquidity

15. Approved Entities
Standalone Primary
Dealers Bank Primary Dealers
 ICICI Securities Primary
Dealership Limited
 Morgan Stanley India
Primary Dealer Pvt. Ltd
 PNB Gilts Ltd
 SBI DFHI Ltd
 STCI Primary Dealer
Limited
 Goldman Sachs (India)
Capital Markets Pvt. Ltd
 Bank of America
 Bank of Baroda
 CitiBank
 HDFC
 HSBC
 J P Morgan Chase
Bank
 Kotak Mahindra Bank
 Axis Bank
 Standard Chartered
Bank

16. Satellite Dealers
Satellite Dealers work in tandem with the Primary
Dealers forming the second tier of the market to
cater to the retail requirements of the market.

17. Support Facilities
 Liquidity Support
 Financial Support

18. Eligible Entities
 DSP Merril Lynch
 Kotak Mahindra Securities
 Ceat Financial
 Tata Finance Securities Ltd
 Birla Global Finance
 Bank of America

19. Importance of Guilt-Edged
Market
 Vital Segment
 Profitable Segment
 Regulated Speculation
 Ideal Financing
 Implementing Fiscal Policy
 Source of Liquidity
 Guaranteed returns

20. Thank You