The STCI is one of the six primary dealers (PDs) operating in the government securities market. The others are Discount & Finance House of India (DFHI) where the State Bank of India holds a majority stake; SBI Gilts, a State Bank subsidiary; ICICI Securities, an ICICI subsidiary; Gilts Securities Trading Corporation, a Canara-Bank subsidiary; and PNB Gilts, a Punjab National Bank subsidiary.

At present, Bank of India (BoI) is the largest shareholder in the STCI with a stake of 28.37 per cent. The RBI holds 14 per cent while the State Bank group holds 10 per cent. The remaining shareholders include Unit Trust of India (UTI) and Industrial Development Bank of India (IDBI). The STCI has an authorised capital base of Rs 500 crore.

In a related move, the STCI has created a new post of joint managing director to accommodate RV Joshi, general manager at BoI, in the securities firm. Joshi has been sent on deputation to the primary dealer. The managing director is KN Ghangurde, who is the Reserve Bank's nominee on the board.

"BoI has nominated RV Joshi as managing director of the corporation as it is the largest shareholder. But it has been decided that he will join the organisation as joint managing director and will succeed Ghangurde once he attains superannuation," a source said.

BoI will nominate another director to the board of STCI soon, sources said. Former SBI chief Dipankar Basu is the chairman of the corporation.

Sources close to the central bank said that the RBI, which divested 26.40 per cent in favour of BoI last year, would like to shed its remaining stake of 14 per cent in the current financial year. "Talks are on with various financial institutions, both domestic and international, to pick up the RBI's stake. The central bank wants to shed the stake this year itself," a source familiar with the talks said.

According to sources, UTI, IDBI and BoI are among the domestic financial institutions that could buy the RBI stake. "All of them want to open gilt subsidiaries, so they can look at picking up the stake," a source said. Among the international financial institutions that could pick up a stake is the International Finance Corporation (IFC). But this news could not be confirmed.