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RBI keen on developing corporate debt market

Special Correspondent

CHENNAI: The Reserve Bank of India feels that "all'' the recommendations of the R. H. Patil committee on the development of a market for corporate bonds should be implemented, according to the RBI Governor, Y. V. Reddy. Replying to questions at the teleconference held on Wednesday on the occasion of the third quarter review of the annual statement on monetary policy for 2006-07, Dr. Reddy said the RBI was in discussions with the Securities and Exchange Board of India (SEBI) and the Finance Ministry on related issues (like liberalisation of disclosure norms and stamp duty relief). He said the corporate debt market was an important need and the RBI would like the market captured in the repo system.

However, mechanisms like reporting platform and trading and settlement systems would have to be installed to the satisfaction of the Reserve Bank of India, he added.

Dr. Reddy said analysis showed that the stipulation of capital market exposure limits for banks in terms of their net worth recently in place of a percentage of their net demand and time liabilities was more rational and appropriate.

The Governor said no "disruption" of the banks' operations in this regard had been reported following the switch-over.

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