Primary dealer fees rise over 40x as RBI lures them to underwrite auctions

The central bank is offering commissions as high as 50 paise per Rs 100 face value for a bond maturing in 2050, compared with just 1.24 paise on April 30, 2020

The underwriting commissions offered to primary dealers have never been this high, and yield management exercise so pronounced, as the Reserve Bank of India (RBI) tries desperately to manage a massive borrowing programme for the government at a more than a decade-low cost.   

The central bank is offering primary dealers (PD) underwriting commissions as high as 50 paise per Rs 100 face value for a bond maturing in 2050, compared with just 1.24 paise on April 30, 2020. This is an over 4,000 per cent rise in commissions for underwriters, who despite this, are under immense pressure as the