RBI revises exposure norms limit for standalone primary dealers

To increase exposure ceiling limits in respect of single borrower or counter-party to 50% of latest audited Net Owned Funds from 25%

In a bid to facilitate greater level of participation in corporate bonds by Standalone Primary Dealers (SPDs), the Reserve Bank of India (RBI) has decided to increase exposure ceiling limits in respect of single borrower or counterparty to 50% of latest audited Net Owned Funds (NOF) from 25% earlier and in respect of group borrower it has been increased to 65% of latest audited NOF from 40% only for investments in AAA rated corporate bonds.

"It is positive for the corporate bond market. This will facilitate additional demand in corporate bonds due to which corporate bond yields could fall," said N S Venkatesh, executive director and head of treasury at IDBI Bank.