The Reserve Bank of India allowed standalone primary dealers (SPDs) to borrow in foreign currency from their parent companies and other authorised entities.

Banking & Finance

The Reserve Bank of India allowed standalone primary dealers (SPDs) to borrow in foreign currency from their parent companies and other authorised entities. Standalone primary dealers will also be allowed to access overdraft facilities in nostro accounts solely for operational use. Nostro is a bank account held in another country by a domestic bank, but in the currency of the foreign country. The RBI issued a circular in this regard. The RBI’s move will help companies in managing funding for their foreign exchange business. As per the central bank’s direction, excess withdrawals not adjusted within five days must be reported to the RBI. Such reporting should occur within 15 days from the end of the month in which the limits are exceeded. Reporting is not required if arrangements are in place for value dating.


      A master direction on the functioning of the standalone primary dealers was issued by the RBI in 2016.

     

     

 

     


Reserve Bank of India

25th governor- Shaktikanta Das
HQ- Mumbai
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