SME Times News Bureau | 23 Feb, 2020
Finance Minister Nirmala Sitharaman on Sunday apprised the G-20
countries on the steps taken in the Union Budget to open up India's bond
market.
During the Finance Ministers & Central Bank
Governors meeting in Riyadh, she outlined the efforts taken to deepen
India's bond market such as removal of capital controls for identified
categories of G-Secs and increased FPI limit on corporate bond market in
the session on "Financial Resilience & Development" on the second
day of the conference, the Finance Ministry said.
FPI limits with
respect to investment in corporate bonds are proposed to be increased
to 15 per cent. This may be a step towards local bond inclusion in
global indices and internationalisation of the rupee.
The
Finance Minister's announcement should help boost investments in the
Indian debt market, the Ministry said, adding Sitharaman looked forward
to continued engagement with the G20 on this agenda.
Hiking the
FPI limit in corporate bonds and concessional tax rate on interest
income earned by FPIs are among the steps that can increase capital
flows into the market.
To promote a deep and liquid market, the
government has announced that a netting legislation would be formulated
to expand the scope of the corporate default swaps market. This would
also significantly help banks manage their capital requirements and
exposure monitoring.
Sitharaman also congratulated the G20's Saudi Presidency for identifying development of capital markets as a priority area.
She
held a bilateral meeting with her Saudi counterpart Mohammed Al-Jadaan
on the sidelines of the conference as well as with her Italian
counterpart Roberto Gualtieri.
