Read on Twitter
Bond market story in India:
It is not a hidden fact that for the last 25 yrs, developing bond market has been like a war cry for regulators, same as Garibi Hatao for politicians.
It is not a hidden fact that for the last 25 yrs, developing bond market has been like a war cry for regulators, same as Garibi Hatao for politicians.
Multiple committees have been set up to make recommendations but not much has happemed in terms of accessibility and ease of trading for retail.
It is still a work in progress.
It is still a work in progress.
2-3 years back, govt in budget announced inter-operability between RBI electronic ledger and SEBI depositories.
It looked a smart move given that 97/98% of govt holdings still with institutions which mainly trade on NDS-OM.
Inter-operability appeared a good move to ease access and improve liquidity on exchange platform for retail.
But still today, it is a work in progress.
Inter-operability appeared a good move to ease access and improve liquidity on exchange platform for retail.
But still today, it is a work in progress.
Meanwhile, almost a year back, SEBI chairman proposed to allow issuance and trading of govt bonds in demat form.
This was the BEST recommendation in last so many years to channelize retail investment in bond market directly and build an investment culture around bond.
This was the BEST recommendation in last so many years to channelize retail investment in bond market directly and build an investment culture around bond.
But again there has been complete silence from policy makers.
Then on Feb 1 in the budget, govt announced a Unified Securities Code which subsumes Sebi Act, SCRA Act, Depositories Act and Govt securities Act.
Prima facie, appears that govt bond trading might slip under SEBI.
Prima facie, appears that govt bond trading might slip under SEBI.
But before people could have interpreted the meaning of Unified Securities Code or debated, on Feb 5, RBI announced retail can open a gilt account directly with it for bond investment and trading.
Completely confused.
Completely confused.
Have no doubt that in the turf war between regulators, investment pyramid, in India will remain inverted for a long long time, until the govt puts the foot down.
Till then, in India, there will be only one asset class and that would be EQUITY.
Till then, in India, there will be only one asset class and that would be EQUITY.
Now some question:
Why simply the bond issuance and trading cannot move to demat? Why force a retail investor to open multiple accounts for investing in equity and bond separately.
Why simply the bond issuance and trading cannot move to demat? Why force a retail investor to open multiple accounts for investing in equity and bond separately.
In Jan, between CDSL and NSDL, almost 15 lacs new demat accounts was opened. Can this efficiency and scale be brought in by RBI gilt account, and even if, how long it will take? Another 5-10 yrs. Do we have so much time, after debating for 20-25 yrs.
In the turf war, the loser is no one but the country. If two regulators cannot come on the same page, it sums up the bond story.
@ananthng @sanjeevsanyal @NileshShah68 @FinMinIndia @nsitharaman @RBI @DasShaktikanta @SEBI_India @SandeepParekh @bhargavizaveri @jaysh88 @mostlyeconomics @SubramanianKri @latha_venkatesh @AaratiKrishnan @dugalira @TamalBandyo @Nithin0dha
