The State Bank of Pakistan (SBP) has appointed nine banks and one financial institution as the primary dealers for participating in the investment of Government Securities including Medium Term Bills (MTBs) and Pakistan Investment Bonds (PIBs) for the next year 2023-24.
The banking regulator received thirteen applications for the appointment of PDs and two applications for the role of SPDs of Government Securities (PIB & MTB). Upon evaluation of each applicant under the criteria laid down in the aforesaid rules, nine banks and one financial institution have been appointed as primary dealers.
All the dealers shall be required to perform certain key roles with a view to improve the participation in primary auctions, enhance distribution, diversify the investor-base and develop the market for government securities.
They are required to actively participate in the primary market by bidding in the auctions of Government Securities as conducted by SBP from time to time. It will distribute Government Securities to non-PD banks and other retail/institutional clients.
These dealers will play an active role in the Government Securities market development to enhance liquidity and turnover and widen the investor base of Government Securities by creating awareness among investors and taking other meaningful initiatives. For this purpose, the PDs, PPDs and SPDs must also continuously upgrade their infrastructure in terms of both physical equipment and skilled manpower.
These banks and financial institutions should provide efficient custody services to their customers (Investor’s Portfolio of Securities Accounts) for Government Securities holding, collection and, payment of profits & maturity proceeds.
Additionally, PDs and PPDs shall also act as market makers in Government Securities by quoting two-way prices in the secondary market.
Last year, the banking regulator chose 12 primary dealers, which included Standard Chartered Bank and Industrial and Commercial Bank of China (ICBC).
Bank Alfalah, Habib Bank Limited, and MCB Bank were declared the best-performing dealers in the outgoing financial year.