MUMBAI, NOV 5: The Reserve Bank of India is considering the introduction of futures trading in the treasury bill and government securities (gilt) market in a bid to boost the secondary debt market.

According to the deputy governor of the Reserve Bank of India, Y V Reddy, the central bank was also considering increasing the number of primary dealers and enhancing their underwriting capacity to 100 per cent in the gilts markets. Reddy was speaking on `Indian financial markets: New initiatives' at the Indian Institute of Foreign Trade in New Delhi on Wednesday.

He classified the issues relating to the financial market under three categories, viz, money market, gilts market and forex market, and said they would be dealt with after a detailed examination.

Among the issues relating to the money market are a reduction of minimum period of term deposits, reduction of lock-in period of MMMF units, enlarging the scope of participation in the repo market, removal of inter-bank liabilities from the minimum prescription of SLR of 75 per cent and CRR of 3 per cent.

Introduction of intermediaries in the money market, creation of level playing field for all banks, FIs, NBFCs in the money market by prescribing liquidity reserve requirements and removing other elements of market segmentation and introduction of screen based dealing systems for money market instruments and gilt, were the other issues to be considered.

The reforms in the gilts market are introduction of a when issued market, access to FIIs in T- bills and automating the Delivery Versus Payment system fully. In the forex market the RBI is considering the issuance of foreign currency denominated bonds to residents, allowing FIIs with equity exposure to cover in the forward market, allowing FIs to participate as full fledged authorised dealers and allowing all derivatives including rupee based derivatives.

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