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Money Aug 30, 2013

India needs efficient bankruptcy law in corporate bond market: RBI

Mumbai: India needs an efficient bankruptcy law in the corporate bond market, Reserve Bank of India executive director R Gandhi said on Friday.

The RBI logo. Reuters

The RBI logo. Reuters

There is a need to encourage public issuance of bonds, he said, adding that the private placement of bonds should be restricted.

Corporate bond issuances have sharply declined post the central bank's measures since mid-July to curb volatility in the forex market by making rupee funds expensive, driving firms to bank loans.

Tax free bond sales, which are targeted at retail buyers, have taken centrestage with Rural Electrification Corp Ltd (REC) kicking off a sale to raise up to Rs 3,500 crore on Friday.

Reuters


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