RBI raises liquidity facility limit for standalone primary dealers to ₹15,000 crore

The Reserve Bank of India (RBI) has decided to increase the aggregate limit made available for Standalone Primary Dealers (SPDs) under the Standing Liquidity Facility at the prevailing repo rate from ₹10,000 crore to ₹15,000 crore, starting April 2, 2025.

This move is based on an assessment of the prevailing and evolving liquidity conditions, the RBI said.

The central bank said the limit for individual SPDs is being conveyed to them separately. All other terms and conditions of the facility will remain unchanged.

Primary Dealers (PDs) strengthen the infrastructure in the Government Securities (G-Sec) market to make it vibrant, liquid, and broad-based. They ensure the development of underwriting and market-making capabilities for G-Secs outside the RBI.

Further, PDs improve the secondary market trading system, which contributes to price discovery, enhances liquidity and turnover, and encourages the voluntary holding of G-Secs among a wider investor base. They also serve as an effective conduit for open market operations (OMO).