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Jul 12, 2012, 08.23 AM IST
The Reserve Bank of India (RBI) said standalone primary dealers will not be allowed to raise capital through short-term bonds from July 1, and should instead issue long-tenure debt to strengthen their capital base and align with Basel III norms for banks.
The RBI had earlier allowed the primary dealers (PDs) to raise short-term capital to meet their market risk since they were more exposed to such risks as underwriters of government bond auction. "However, PDs which are already having Tier-III capital may continue to recognise it as an eligible capital till the maturity of such subordinated debts," the RBI said on Wednesday.
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