MUMBAI: The development of corporate bonds has "not been too satisfactory", Reserve Bank of India Deputy Governor R. Gandhi said on Monday, calling the huge supply of government bonds one of the impediments.
Speaking at a debt market summit in Mumbai, Gandhi also called for a "reassessment" of the role played by pension funds and insurance companies in corporate bond markets. Both categories of investors face limitations in investing in corporate debt.
"The progress in the growth of corporate debt segment has not been too satisfactory for our liking," Gandhi said.
Gandhi also called for corporate bond market infrastructure to be brought at par with that of the government bonds market, saying it would improve liquidity and enhance transparency.
Gandhi also said allowing re-issuance of corporate bonds can help in market development, but warned that companies should ensure that does not lead to redemption pressures.
Corporate bonds are regulated by capital markets regulator Securities and Exchange Board of India (SEBI).