Shriram Finance Seeks RBI Primary Dealer Licence
Why in the news
Shriram Finance wants a standalone Primary Dealer licence; an asset finance NBFC in this space would be rare, as banks and specialised firms usually dominate it.
Key facts
- PDs back and underwrite auctions of G-Secs, T-Bills and Cash Management Bills.
- Shriram bought 100% of Shriram Overseas Investments (SOIPL) and named Umesh Revankar and Parag Sharma to its board.
- A source called PD work low-margin but almost risk-free, fitting Shriram’s diversification plan.
RBI framework
- RBI is selective with new licences.
- PD system began in 1995; banks were included in 2006-07.
- PDs serve as market-makers and merchant bankers for the Centre in G-Sec issuance.
Significance
A successful bid would mark a business shift for Shriram and a wider change in India’s fixed-income market structure.
Exam angle
- Eligibility: one year as NBFC.
- Regulator: RBI.