Revitalizing the Corporate Bond Market: A Call for Active Participation

C S Setty, chairman of the State Bank of India, emphasized the need for increased involvement of mutual and pension funds in the corporate bond market. Despite significant corporate interest in bond issuance, participation from these funds is lacking, hindering market depth and infrastructure financing.

C S Setty, the chairman of the State Bank of India, urged greater engagement from mutual and pension funds in the corporate bond market on Wednesday. His remarks highlighted an opportunity for these funds to actively contribute to the market's growth and diversification.

Setty pointed out that while many corporates are interested in issuing bonds, the current level of participation from mutual and pension funds remains insufficient. He underscored the importance of insurance and mutual funds channeling more investments into this sector to foster market depth, which is vital for financing infrastructure and corporate balance sheets.

Highlighting the lack of progress in past years, Setty noted that investments are frequently directed towards AAA-rated bonds, but this approach does not support a burgeoning corporate bond market. As the largest issuer, SBI alone has floated bonds worth Rs 50,000 crore this year, marking a significant yet isolated stride towards deepening market participation.

(With inputs from agencies.)