Uptick in Municipal Bonds: A Call to Pension Funds and Insurers

Sebi's executive director Pramod Rao called on pension funds and insurers to increase their support for municipal bonds. He emphasized the smaller size of India's municipal bond market compared to the US and encouraged innovative ways to boost market activity. LIC and SBI officials also highlighted the importance of a robust corporate bond market.

Sebi's executive director Pramod Rao on Friday urged pension funds and insurers to bolster their support for municipal bonds. Speaking at an Assocham event, Rao noted the stark difference in market size between India and the US, where the municipal bond market is valued at USD 4 trillion.

Rao called for increased activity and innovation within India's bond markets, citing the corporate bond repo market's growth to Rs 10,000 crore monthly. He suggested looking into thematic bonds and a marketing campaign similar to that of the mutual funds by Amfi.

SBI's Ashwini Kumar Tewari and LIC's R Doraiswamy underscored the necessity for a mature corporate bond market to facilitate infrastructure investments and address the issue of low-rated companies relying heavily on banks.

(With inputs from agencies.)