At present, there is a timetable for 14-, 91- and 364-day treasury bills auctions. Besides, the RBI has announced a repo calendar. However, there is no timetable for dated government securities.

The formalisation of a timetable for government securities has been a long-standing demand for the development of the gilts market as it allows banks, provident funds and insurance companies to plan their investments well in advance. The RBI sources admitted that introduction of the timetable would take some time.

Last year, DHFI had appointed consultants MP Chitale and Co to prepare a restructuring framework outlining the asset-liability mismatch.

According to DFHI managing director MR Ramesh, the consultants have suggested that the primary dealer should have a line ofcredit, diversify its liability portfolio and structure a proper risk-management system.

On the need for a regulated term-money market, Mukherji said, "The development of the term-money market and rationalisation of reserve requirements, stringent guidelines on asset-liability and interest rate risk management will shortly develop." He further said that a market borrowing programme should be on a term-based liability structure."

Justifying primary dealers' (PDs) lack of enthusiasm in participating in auctions, DFHI chairman PG Kakodkar said, "PDs should be given incentives to fulfil their underwriting obligations through provisions like special refinance facility by the central bank and additional underwriting fee, especially when there are aberrations in the market leading to insufficient auction cover by PDs."

DFHI recorded a gross profit of Rs 105.26 crore for fiscal 1997-98 against Rs 95.92 crore in the previous year. The company's net profit increased by 27 per cent to Rs 67.92 crore compared withRs 53.66 crore last year. In the treasury bills segment, its overall and outright turnover at Rs 2,377 crore and Rs 2,015 crore, respectively, were relatively lower compared with Rs 5,769 crore and Rs 5,261 crore, respectively, in the corresponding period last year.

During the current financial year (up to August 31, 1998), the company has maintained its turnover in the term-money market at Rs 1,66,552 crore compared with Rs 1,67,940 crore in the previous year.

Former State Bank of India chairman Kakodkar said there is a need for refinement of the system of liquidity support given by the RBI to PDs. "PDs should be more aggressive in complying with their obligations by regular participation in auctions and help increase the volume of trading in secondary market," he said.