New Delhi, May 1 -- In a pointed message to financial market intermediaries, Reserve Bank of India Governor Sanjay Malhotra cautioned that the privileges enjoyed by banks and primary dealers (PDs) come with clear obligations to ensure fairness and access across markets.

"...market participants must acknowledge that while a privilege bestows some benefits, it also entails responsibilities," Malhotra said, adding that banks and PDs enjoy exclusive access to liquidity facilities and short-term money markets, and act as market-makers in over-the-counter (OTC) derivatives.

"These privileges accord immense market power to the PDs and banks, which is beneficial for their growth." However, he stressed that this market power must be exercised re...