Theranautilus Secures $1.2 Mn in Seed...
19 Nov 2024
An RBI senior official emphasized the need for a supportive framework to enable Indian firms to issue Environmental, Social, and Governance (ESG) bonds domestically. Dimple Bhandia, the chief general manager of the Reserve Bank of India, pointed out on August 9, 2024, that while SEBI has made progress with bond market regulations, the development of the corporate bond repo market has not been as robust as expected.
Speaking at an Assocham event, Bhandia noted that many Indian companies are currently issuing ESG bonds abroad, highlighting the need for a local framework to facilitate this process. She also expressed disappointment over the lack of development in the credit derivatives market, which has seen minimal trading activity.
Despite these challenges, Bhandia observed that the corporate bond market’s growth has outpaced bank credit expansion over the past decade. She noted that the relatively stable spreads on corporate bonds compared to government securities indicate market maturity.
Bhandia also welcomed the strong participation of foreign portfolio investors in the voluntary retention route facility, which primarily benefits corporate bonds. This interest has led the RBI to adjust its upper limits twice. Additionally, she highlighted the success of allowing banks to include corporate bonds in their held-to-maturity portfolios, which has positively impacted demand for these bonds.
Chat on WhatsApp
Request a call back
