Pillars of retail G-Sec market
Key reform India is the third country to allow retail participation in government securities market
Key reform India is the third country to allow retail participation in government securities market×
Creating a conducive and investor-friendly environment is key to enhancing retail investment in G-Secs
In the Union Budget for FY 2021-22, the government proposed to consolidate various statutory Acts, namely the Securities Exchange Board of India (SEBI) Act, 1992, and the Government Securities Act 2007, etc. into a rationalised single securities markets code.
Consequently, the Reserve Bank of India (RBI) allowed retail investors to participate in the government securities (G-Sec) market both primary and secondary through ‘Retail Direct’, an online portal for trading.
Bond branding
×
Inclusion of G-Secs in global bond indices is key to expanding the demand for Indian bonds
That FTSE Russell is considering including Indian government securities in the FTSE Emerging Government Bond Index provides a silver-lining to an otherwise bleak government bond market. The market is nervous about the deluge of government paper expected over the next 12 months. While the decision to place India on the watchlist for inclusion in the bond index does not mean that there will be an immediate flow of foreign funds into G-Secs, the eventual inclusion will certainly help create a sustainable pool of investors for Indian government securities. The RBI’s announcement that ₹7,24,000 crore will be borrowed in the next six months means G-Secs worth around ₹1,20,000 crore are going to be auctioned every month. With the FY21 fiscal deficit slated to be lower than the Revised Estimate, it was hoped that the Centre will need to borrow less in the new fiscal year. But
One Year Later, What Changes Should We Expect in the RBIâs Pandemic Playbook?Â
Almost one year down the line, circumstances have changed to a great extent, thus making the response from the central bank less obvious and straightforward compared with March 2020.
A worker walks past the logo of Reserve Bank of India (RBI) inside its office in New Delhi, July 8, 2019. Photo: Reuters/Anushree Fadnavis/Files
Macro11/Mar/2021
The COVID-19 pandemic has kept all Indian policymakers on their toes over the last year, including the Reserve Bank of India (RBI).
So far, the response from Indiaâs central bank has been exactly what the doctor had ordered to alleviate the implications of the pandemic. The RBI responded with a mix of conventional and unconventional measures, which has included reduction in policy rates by at least 115 bps, sustained forward guidance in the form of an accommodative monetary policy stance, ample liquidity support via open market operations, specia