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Concession for primary dealers in HTM bonds

Concession for primary dealers in HTM bonds
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First Published: Wed, Mar 10 2010. 11 59 PM IST
Updated: Wed, Mar 10 2010. 11 59 PM IST
Mumbai:The Reserve Bank of India (RBI) on Wednesday extended until further notice a concession to primary dealers that allows them to keep their government bond holding in ‘held to maturity’ (HTM) category to avoid any nominal loss.
Bonds kept in this category are not required to be marked to market, or valued at their current price rather than at the prices they were purchased. The central bank had allowed this facility to primary dealers, who are underwriters to the government’s bond auctions, in August to help them tide over rising bond yields. The facility was scheduled to end on 31 March. Bond yields are on the rise with the 10-year bond yield trading at almost 8% level, a 17-month high.
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First Published: Wed, Mar 10 2010. 11 59 PM IST