NITI Aayog Publishes Corporate Bond Market Report
In News
What Happened
Why It Matters
Background
History & Context
What Changed
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BEFORE: Heavy reliance on commercial banks for infrastructure financing, often leading to asset-liability mismatches for the banks. NOW: The report provides a structured roadmap to shift long-term infrastructure financing towards the corporate bond market to secure low-cost capital.
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BEFORE: The market suffered from a concentrated investor profile and limited secondary-market liquidity, driven largely by private placements. NOW: The report recommends enhanced transparency, public issuances, and dedicated market-making facilities to improve price discovery and secondary-market depth.
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BEFORE: Traditional bond issuance mechanisms restricted broader investor participation due to high ticket sizes. NOW: NITI Aayog advocates deploying digital innovations, such as asset tokenisation, to fractionalise bonds and democratise investor access.
Prelims Angle
NCERT Connection
Practice Questions
Q1
Correct Statement(s)Which of the following statements is/are correct regarding the 'Deepening the Corporate Bond Market in India' report? 1. It was released by the Reserve Bank of India to address asset-liability mismatches in commercial banks. 2. It recommends the deployment of digital innovations like tokenised bonds to improve market depth.