Mumbai, July 5
The Reserve Bank of India has allowed primary dealers (PDs) in government securities to invest in equity shares, derivatives and mutual funds, and underwrite public issues.
They are also permitted to undertake non-fund based activities including portfolio management services, loan syndications, M&A, issue management, debt restructuring and consultancy services and distribution of mutual funds and insurance products.
This follows the decision announced by RBI in its annual policy statement- 2006-07.
PDs are, however, not allowed to undertake share broking, trading and broking in commodities, gold and foreign exchange. Some PDs have been seeking permission to trade in commodities and foreign exchange.
The RBI has stipulated that all PDs should have 50 per cent of their investments in government securities (their core activity) at any point of time. The PDs that propose to diversify into non-core activities should have a minimum net owned fund of Rs 100 crore as against Rs 50 crore as in the case of other PDs.Related Stories:
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