Government bonds impede corporate bond market: RBI

Mumbai, March 23:

The growth of the corporate bond market is largely impeded by the high government borrowings through the issue of bonds, said a senior RBI official.

Speaking at a conference here, Reserve Bank of India’s (RBI) deputy governor R. Gandhi said the huge supply of government bonds is one of the impediments in the growth of the corporate bond market.

He said the role of insurance companies and pension funds have to be reassessed as they are hindered in the corporate debt market.

Gandhi also expressed RBI’s concern about the corporate debt market as it is not to the central bank’s satisfaction.

According to him, the corporate bond market is like a dwarf as compared to the government bond market. IANS