Private sector banks retain spot as top traders in gilt market in Jan-Mar
This story was originally published at 22:10 IST on 2 July 2025
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MUMBAI – Private sector banks dominated trade in the government securities market in the quarter ended March, the Department of Economic Affairs said in its quarterly report on public debt management Wednesday. Private sector banks had a 23% share in purchases and 24% share in sales in total outright trading activity in the secondary market, the report said. However, their share in trading fell from the quarter-ago and year-ago periods.
Foreign banks were second in trading activity, recording a 20% share in purchases and 21% share in sales. Their activity increased from Oct-Dec but reduced from the year-ago period. State-owned banks were the third most active in trading activity. Foreign banks, primary dealerships, private sector banks and public sector banks were net sellers in Jan-Mar, while co-operative banks, financial institutions, mutual funds and 'others' — consisting of insurance companies, provident funds and the Reserve Bank of India — were net buyers, the report said.
The report also said that trade was concentrated in gilts maturing in seven to 10 years in Jan-Mar, at 56%, down sequentially but up from 50% a year ago. Trade in gilts maturing in less than three years increased from a quarter ago, and doubled on year, as the yield curve steepened due to the Reserve Bank of India's liquidity measures. The RBI had infused durable liquidity into the banking system through several measures, including buying INR 2.83 trillion of gilts in Jan-Mar. Trade in bonds maturing above 10 years fell to 20% in the March quarter from 29% a year ago. End
Reported by Cassandra Carvalho
Edited by Deepshikha Bhardwaj
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