NDS, which stands for Negotiated Dealing System, is a fully electronic trading platform that is instituted and operated by the Reserve Bank of India to simplify the issuing and exchange of government securities and other types of money market instruments.
Previously, the country’s government security market was primarily telephonic, which meant that buyers and sellers had to place trades over the phone, submit physical transfer forms, and issue checks for the settlement of funds to the RBI.
This telephonic-based government securities market lacked efficiency and transparency which used to cause a lot of delay in the overall procedures. Moreover, many of the world’s central banks in the developed world already made the switch to fully electronic trading platforms early
To overcome this, in 2002, NDS was implemented by the RBI, with the aim of improving the efficiency and liquidity of the fixed income market within India. The Government of India issues bonds, treasury bills and state development loans from the NDS platform.
The NDS initially was used for the issuance of government securities in the primary market However, in August, 2005 the RBI introduced the Negotiate Dealing System-Order Matching system (NDS-OM). NDS-OM is an electronic, screen-based, anonymous, order-driven trading system for dealing in government securities in the secondary market.
The system is designed to bring transparency to secondary market transactions, while enabling members to place bids and offer directly on the NDS-OM screen. This is an order-driven electronic system where the participants can trade anonymously by placing their orders on the system or accepting the orders already placed by other participants.
The Clearing Corporation of India on behalf of the RBI operates the NDS-OM.
NDS works via two types of NDS-OM members:
| Feature | NDS-OM (Negotiated Dealing System - Order Matching) | e-Kuber |
|---|---|---|
| Purpose | Electronic trading platform for government securities (G-Secs) | Core banking solution of the RBI |
| Users | Banks, Primary Dealers, and institutional investors | All commercial banks, state governments, and others |
| Functionality | Enables anonymous, screen-based order matching for buying/selling government securities | Facilitates settlement of government transactions, funds transfer, and securities management |
| Market Type | Secondary market for G-Secs | Backend infrastructure for both primary and secondary transactions |
| Transparency | High – as it shows live bids and offers and ensures best price matching | Not primarily for market price discovery |
| Access to Individuals | Yes, through Retail Direct Scheme | No – used only by institutions |
| Settlement Mechanism | Real-time or T+1 depending on transaction | Real-time gross settlement (RTGS) and other banking modules |
| Launch Year | 2005 | 2012 |
| Administered By | RBI – Financial Markets Department | RBI – Department of Information Technology |
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