Corporate bond market remains underdeveloped: ADB
India's corporate bond market remains underdeveloped despite strong economic growth and significant financial system reforms, the Asian Development Bank has said in a report.
By PTI |
MUMBAI: India's corporate bond market remains underdeveloped despite strong economic growth and significant financial system reforms, the Asian Development Bank has said in a report.
"Several changes have helped strengthen the corporate bond market...but it remains undeveloped relative to the government market," ADB Head (Office of Regional Economic Integration) Jong-Wha Lee said.
The observations are a part of the recently released edition of Asia Bond Monitor, a semi-annual publication, which includes a theme chapter on Indian bond market.
Lee said that securitisation has a long history in India but the development has been slow and limited to a few asset types.
The report stated that corporate borrowers continue to depend on bank loans, equity markets and private placement to meet their requirement of funds.
To address the lack of liquidity in the bond market, the report suggested easing investment mandate on contractual savings institutions, developing derivative and swap markets and facilitating foreign investment by relaxing exchange controls.
The report also advised reforming the stamp duty structure and revamping disclosure requirements for corporate public offers. "Streamlining regulatory and supervisory structure could contribute to substantial efficiency spurring innovation, economies of scale, liquidity and competition," Lee said.
"Several changes have helped strengthen the corporate bond market...but it remains undeveloped relative to the government market," ADB Head (Office of Regional Economic Integration) Jong-Wha Lee said.
The observations are a part of the recently released edition of Asia Bond Monitor, a semi-annual publication, which includes a theme chapter on Indian bond market.
Lee said that securitisation has a long history in India but the development has been slow and limited to a few asset types.
The report stated that corporate borrowers continue to depend on bank loans, equity markets and private placement to meet their requirement of funds.
To address the lack of liquidity in the bond market, the report suggested easing investment mandate on contractual savings institutions, developing derivative and swap markets and facilitating foreign investment by relaxing exchange controls.
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The report also advised reforming the stamp duty structure and revamping disclosure requirements for corporate public offers. "Streamlining regulatory and supervisory structure could contribute to substantial efficiency spurring innovation, economies of scale, liquidity and competition," Lee said.
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