Addressing a press conference after STCI's sixth annual general meeting Mr Basu said, "Primary dealers (PDs) have been asking for effective refinance from the Reserve Bank, the latter, in turn, has been suggesting that PDs must diversify their funding sources and not only rely on Reserve Bank refinance. I strongly support the idea of diversifying funding sources and we in STCI have attempted to do so by issuing CPs and arranging standby credit lines from certain banks".

Mr Basu added that in the current year, PDs found themselves in a most difficult situation, and suggested a few measures to minimise the backlash of the currency defending moves. These include a "separate window" at the RBI to provide primary dealers temporary funding support through reserves-repos. Other suggestions include the RBI's opening a 'buy window' under its open market operations for purchase of T-bills at yields similar to those that emerged in the primary auctions of these bills. Mr Basu said that the RBI could open a window for 'switch deals' under which relatively illiquid government securities could be purchased by the central bank against its sales of short-dated government securities at market-related yields.u Additionally, Mr Basu stressed the need for continued reforms in the gilts market.

"There is a need to move towards a system where the cut-off rate is derived primarily on the basis of actual bids", he said. For the year ended-March 2000, STCI earned a net-profit of Rs 113.65 crore, an increase of 37 per cent over Rs 82.98 crore in 1998-99. It also paid a total dividend of 12 per cent, an interim dividend 10 per cent and a final dividend of 2 per cent, as against the 10 per cent paid in the preceding fiscal. u STCI's total turnover in the primary and secondary markets stood at Rs Rs 66,400 crore. In the previous fiscal, it retained its leading position among primary dealers with a 22 per cent market share in the primary market and an 18 per cent share in the secondary market.