As yields became market related and Government started competing with the private sector in the market for funds, it had the desired impact on G-Sec market as evident by rising secondary market activity and near emergence of market yield curve. The annual turnover in the market has grown from about Rs 2.8 lakh crore in 1998-99 to Rs. 56.3 lakh crore in 200708.
Yields on G-Sec now provide bench mark for pricing of securities in other markets. With reforms, G-Sec is no longer a captive market. Investment in G-Sec by the banks is based on their commercial judgement rather than being dictated by the reserve requirement.