Bank of Baroda to set up wholly-owned subsidiary to undertake standalone primary dealership business
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NEW DELHI, 30/04/2025: A general view of Bank of Baroda at Parliament Street in New Delhi on Wednesday. April 30, 2025. Photo: AMAN RAJ / INTERN
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AMAN RAJ
Bank of Baroda (BoB) announced on Friday that it secured preliminary authorization from the Reserve Bank of India (RBI) to transition its existing bank primary dealer operations to a planned wholly owned subsidiary. This entity will exclusively handle standalone primary dealer (SPD) activities.
The public sector institution clarified in its regulatory disclosure that establishing this subsidiary remains contingent upon securing additional regulatory clearances.
India’s central banking authority initially established the Primary Dealers framework in 1995 to reinforce the government securities market infrastructure. This initiative aimed to enhance market liquidity, broaden participation, and cultivate specialized underwriting and market-making capabilities for government securities beyond direct RBI involvement.
Primary Dealers contribute significantly to secondary market operations by facilitating price discovery processes, boosting trading volumes, and encouraging diversified investor participation in government bonds. They additionally support monetary policy implementation through open market operations.
The RBI expanded this framework in 2006-07 by permitting banks to conduct primary dealership activities through dedicated departments. Subsequently, standalone PDs gained approval to diversify into complementary financial services under specific regulatory conditions.
Currently, India’s primary dealership landscape comprises seven specialist standalone entities including SBI DFHI, ICICI Securities Primary Dealership, and PNB Gilts. Fourteen banks including Bank of Baroda, Canara Bank, and Union Bank of India also operate authorized bank PD divisions.
Published on January 9, 2026
