Event Based Analysis of the Corporate Bond Market in India through a 7i Framework

Abstract

A well functioning and efficient corporate bond market is necessary for any economy. While most developed markets like the US have one in place, emerging economies are slowly realizing the importance of one. The need was especially highlighted post the Asian currency crisis in the late 1990s. India, a predominantly bank based economy, has been taking numerous measures to deepen its corporate bond markets over the last decade. The Patil Committee Report published in 2005, brought to light the various areas in which the regulators, RBI and SEBI, needed to concentrate to increase the traded volumes in this market. Some of the areas brought out by this report were the lack of demand and supply of bonds, weak infrastructure, lack of retail participation etc. This paper seeks to establish through the 7i Framework of the RBI, the strides the market has already made in this regard and the possible areas that still need a push. The researchers have relied on the published news reports pertaining to the corporate bond markets in India to collect data on the issuances for the calendar year 2015 as well as other material information concerning the markets. These have been discussed in detail to identify which of the 7i's is the focus area for policy development and where there remains further room for action.