Many regulators hinder the growth of the corporate bond market
Mumbai, Ta. November 09, 2019, Saturday
The presence of a number of regulators in India has crippled the corporate bond market, ”said a Reserve Bank official. The need for a strong bond market has increased. This requirement has increased due to the stress on the balance sheets of banks.
Policy makers of the country have long been trying to make the corporate bond market a major medium for raising money for Indian companies, but have not had much success.
Despite several measures being announced, the bond market is experiencing a lack of liquidity and accounts for only 5% of GDP. Bond markets in many developed countries remain higher than their GDP.
As the sole director of the Reserve Bank, it can easily develop the government securities market and has developed platforms like Clearing Corporation on which securities are traded.
But in the corporate bond sector we have many directors. And we also have new institutional directors who are seeking some practical requirements for the areas under their control. Perhaps this is because of this, the official said that the corporates will be facing hurdles in entering the bond market.
Apart from the various regulators, different platforms such as clearing corporations, stock markets, etc. also hinder the growth of corporate bond markets. Having too many regulators can make the combination take longer. In addition to the issues of multiple regulators, it is important to address the issues related to supply.
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