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RBI Permits Standalone Primary Dealers (SPDs) to Participate in Repo Operations.

Banking & Finance | Dated: 31 Mar 2025

On 26th March 2025, Mumbai (Maharashtra)-based Reserve Bank of India (RBI) permitted Standalone Primary Dealers (SPDs) to participate in all repo operations across tenures, removing previous restrictions that limited their role primarily to overnight liquidity management, excluding the Marginal Standing Facility (MSF) and selectively in long-term Variable Rate Repo (VRR) operations.

🎯 Key Highlights:

  • - The RBI’s decision aims to provide SPDs with easier access to funds, helping manage liquidity and address the ongoing shortage as the financial year ends on 31st March 2025.

💡 Other Important Facts:

  • (i) The banking system has faced a persistent liquidity deficit despite RBI’s recent liquidity injections using tools such as daily VRR auctions, long-term VRRs, USD/INR Buy/Sell swap auctions, and Open Market Operations (OMOs).
  • (ii) RBI is addressing the prevailing liquidity deficit of Rs. 1.58 lakh crore (as of March 2025), enhancing the ability of SPDs to efficiently manage short- and long-term liquidity needs.

📚 Test Your Knowledge:

Recently, which regulatory body permitted Standalone Primary Dealers (SPDs) to participate in all repo operations across tenures?

Correct Answer: RBI

🚀 Quick Recap:

About RBI

  • Governor : Sanjay Malhotra
  • Headquarter : Mumbai