The Reserve Bank of India (RBI) has announced an increase in the aggregate limit for Standalone Primary Dealers (SPDs) under the Standing Liquidity Facility starting April 2, 2025. The new limit will be ₹15,000 crore, up from the current ₹10,000 crore. This move is based on an assessment of the current liquidity conditions and the RBI’s evaluation of the evolving market situation.
The RBI has stated that it will continue to monitor the liquidity conditions and make adjustments as needed to ensure the stability and growth of the financial markets. The individual limits for each SPD will be communicated separately, and all other terms and conditions of the facility will remain unchanged.
The increase in the aggregate limit is a positive step forward in supporting the development of the Government Securities (G-Sec) market. Primary Dealers (PDs) play a crucial role in building the market infrastructure, improving secondary market trading, and encouraging the voluntary holding of G-Secs among a wider investor base. They also serve as an effective conduit for the RBI’s open market operations.
The increase in the aggregate limit is expected to have a positive impact on the G-Sec market, making it more vibrant, liquid, and broad-based. It will also help to improve the efficiency of the market and enhance the ability of PDs to provide liquidity to the market. Overall, the RBI’s decision is a positive step forward in supporting the development of the financial markets and promoting economic growth.