• This approval marks a major step in PSB’s strategic restructuring initiatives.
• RBI has clarified SPD business will be set up subject to other regulatory approvals. RBI increased the aggregate limit available to SPDs under the Standing Liquidity Facility at the existing repo rate, from Rs 10,000 crore to Rs 15,000 crore, with effect from (w.e.f) April 02, 2025.

• What? BOB received In-Principle Approval from RBI
• Approval for: to Switch from Bank  PD business to wholly-owned subsidiary
• Significance: To undertake SPD business
• Total SPDs in India: 07 (ICICI Securities Primary Dealership, Morgan Stanley India PD, among other)
• Total Bank PDs: 14 (including BoB, Canara Bank, Union Bank of India (UBI), HDFC Bank Limited)

About Primary Dealers (PDs):
Background: In 1995, RBI introduced the system of PDs aimed to bolster the infrastructure in the Government Securities (G-Sec) market.

• RBI allowed banks to undertake PD business departmentally in 2006-07.

Definition: PDs refer to a RBI-registered Non-Banking Financial Company (NBFC), act as intermediaries between the RBI and other market participants.

• PDs are authorised to buy and sell G-Secs (like bonds, Treasury-bills (T-bills)) directly from a government’s debt manager (like from RBI) and resell them, ensuring liquidity in G-Secs market.

Types of PDs: PDs in India have been classified into two different categories such as: SPDs and Bank PDs.

• Bank PDs: These are specialized departments within the existing commercial banks that undertake PD activities.
• SPDs: These entities are either subsidiaries of Scheduled Commercial Banks (SCBs) or incorporated abroad or incorporated under the companies act and registered as NBFCs.

Total PDs and SPDs in India: As of now, there are 7 SPDs namely: ICICI Securities Primary Dealership, Morgan Stanley India PD, Nomura Fixed Income Securities, PNB Gifts, SBI DFHI, STCI PD, and Goldman Sachs (India) Capital Markets;

• And, 14 bank-affiliated PDs in India: Canara Bank, Union Bank of India (UBI), HDFC Bank Limited, Axis Bank Limited, among others.

About Bank of Baroda (BOB):
Managing Director (MD) and Chief Executive Officer (CEO)- Dr. Debadatta Chand
Headquarters- Vadodara, Gujarat
Tagline- “India’s International Bank”
Established- 1908