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Bank of Baroda Gets RBI Nod for Standalone PD Subsidiary

12 January 20261 min read
BANKING & FINANCEBank of BarodaGets RBI Nod forStandalone PDSubsidiary12 January 2026safalsetu.com

Why in the news

RBI cleared Bank of Baroda’s plan to move primary dealing into its own subsidiary, a step in PSB restructuring.

Key facts

  • BoB will hive off PD activity from its balance sheet into a wholly owned SPD.
  • Final setup needs other regulatory approvals.
  • SLF ceiling for SPDs lifted by RBI, Rs 10,000 crore to Rs 15,000 crore (from April 2, 2025), priced at repo.

Background

  • RBI began the PD system in 1995 to deepen the G-Sec market.
  • From 2006-07 banks could run PD business departmentally.
  • RBI now favours clearer risk separation via SPDs.

About Primary Dealers

  • RBI-registered NBFCs acting as middlemen in the G-Sec market for liquidity and smooth debt issuance.
  • Functions: buy G-Secs from RBI, underwrite and distribute them, trade in the secondary market.
  • Bank PDs: a department inside a commercial bank.
  • SPDs: wholly owned bank subsidiaries, or NBFCs under the Companies Act.

About Bank of Baroda

  • MD and CEO Dr. Debadatta Chand; HQ Vadodara, Gujarat; established 1908.

Exam angle

  • PD system launched: 1995.

Test yourself

1. Bank of Baroda received RBI's in-principle approval to shift its PD business into what?

It will move to a wholly owned SPD subsidiary.

2. In which year did RBI introduce the Primary Dealer system?

The PD system began in 1995 to deepen the G-Sec market.

3. RBI raised the aggregate SLF limit for SPDs to what amount?

The limit rose from Rs 10,000 crore to Rs 15,000 crore.

This topic is part of Daily Current Affairs 11 & 12 January 2026 (23 topics).

All topics of the dayDay quizJanuary 2026

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