Indian investors love fixed income, and equity. Bonds, however, have not made the cut yet. The discomfort to invest in bonds is further accentuated due to lack of information and illiquidity. Having twin regulators at the helm— with the Reserve Bank of India (RBI) supervising government bonds and market regulator Sebi overseeing corporate bonds—has not helped active market reforms. Even today, simple information like yield and interest— that is inbuilt but not paid —is not displayed at exchanges where small lots of bonds trade.
Indian investors love fixed income, and equity. Bonds, however, have not made the cut yet. The discomfort to invest in bonds is further accentuated due to lack of information and illiquidity. Having twin regulators at the helm— with the Reserve Bank of India (RBI) supervising government bonds and market regulator Sebi overseeing corporate bonds—has not helped active market reforms. Even today, simple information like yield and interest— that is inbuilt but not paid —is not displayed at exchanges where small lots of bonds trade.
To increase retail participation, RBI launched the government bond portal, enabling investors to buy government bonds for as low as ₹10,000. Sebi also came out with a regulatory framework for online bond platforms and guidelines to cut the minimum face value of corporate bonds to ₹1 lakh. But these measures would still be counted as piecemeal approach.
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To increase retail participation, RBI launched the government bond portal, enabling investors to buy government bonds for as low as ₹10,000. Sebi also came out with a regulatory framework for online bond platforms and guidelines to cut the minimum face value of corporate bonds to ₹1 lakh. But these measures would still be counted as piecemeal approach.
One of the ways to make it work is by acting in a holistic manner…