Screen-Based Gilts Trading To Begin In Feb

The Reserve Bank of India (RBI) is set to commence screen-based trading in government securities, also termed as negotiated dealing system (NDS), by the third week of February.

The central bank today in a meeting with the treasury heads of different banks has communicated the message. The central bank had kicked off the pilot run of NDS from November 5.

The electronic NDS was proposed to facilitate transparent electronic bidding in auctions and secondary market transactions on a real-time basis.

At present, trading in gilts is done over the phone. The new system, though initially will start with the technically compatible market participants, will gradually encompass all statutory general ledger account holders and all transactions in securities, treasury bills repos, call and notice money market and term money, commercial paper, certificates of deposits and derivatives.

 

Currently, 42 banks and primary dealers are compatible with NDS. In today's meeting few more banks have expressed their intention of going for negotiated dealing system, but pointed out some operational difficulties.