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Informist, Friday, Oct. 31, 2025

 

--Sources: RBI to meet standalone, bank PDs next week 

--Sources: RBI-PD meeting next week may touch on recent rise in gilt yields 
 

By Aaryan Khanna

 

NEW DELHI – The Reserve Bank of India will meet standalone primary dealers Tuesday and banks with integrated primary dealerships units Thursday to discuss "primary dealer-related activities", multiple treasury officials aware of the matter told Informist. The RBI may discuss the recent rise in government bond yields at the meetings, which will be attended by senior officials, including treasury heads, the officials said.

 

Some dealers speculated that the meetings may be to also discuss measures relating to the central bank digital currency and the RBI Retail Direct measure to increase the participation of retail investors in the government bond market, which is currently dominated by institutions. These have been points of discussion at previous such meetings, the officials said.

 

"Whatever else he (the RBI) may want to discuss, he will definitely ask about why yields are going up," one of the treasury officials said. "The fact that he has called the meeting immediately after the cancellation does not look like a coincidence." In market parlance, a "cancellation" refers to the RBI's rejection of bids at a bond auction, with the government essentially forgoing raising the funds that week.

 

The yield on the 10-year benchmark 6.33%, 2035 gilt neared 6.60%, a one-month high, Friday following poor demand from investors through the week. At the INR 320-billion gilts auction Friday, the RBI rejected all bids for INR 110 billion of the 6.28%, 2032 bond, likely as traders demanded high yields to pick up the gilt. This helped the 2035 gilt yield chart its best day in a month, falling to 6.53% by the close.

 

There is no clarity on whether only a select group or all primary dealerships have been invited by the RBI, the officials said. There are seven standalone primary dealers and 21 banks with integrated primary dealerships. A primary dealership's business is to be a market-maker in the fixed income market. They are regulated by the RBI.

 

"As of now, all we know is that he has said PD (primary dealer)-related activities," another official said. "We will only get to know who is attending or why they have called us at the meeting."  End

 

Edited by Rajeev Pai

 

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