RBI, Sebi look to facilitate local issuance of green bonds
green bonds and also help expand the broader debt market.
To enable companies to issue Environmental, Social, and Governance (ESG) bonds locally, the Reserve Bank of India's (RBI) chief general manager Dimple Bhandia talked about the need for an enabling framework for such green bonds within the country, at an Assocham event Friday.
«We find a lot of our companies are going overseas and issuing ESG bonds. This is an area where we need to make an enabling framework here,» said RBI's Bhandia.
Talking about the recent changes in regulations that now allow banks to include corporate bonds in their Held to Maturity (HTM) portfolios, she said that it is expected to help in increasing demand for corporate bonds. Before that there was a differential regime-g-secs could be held in the HTM portfolio and need not be marked-to-market (MTM), but corporate bonds had to be necessarily in the trading book even if they were going to hold until maturity.
«A set of new investment guidelines was issued last year which came into effect from the first of April this year in terms of which banks can now hold corporate bonds in their HTM portfolios,» said Bhandia. «This was a long-standing ask from banks. Feedback from the banks is that this (the new investment norms) is widely expected to provide a boost to the demand for corporate bonds.»
Pramod Rao, executive director, Sebi, urged corporate bond issuers to be innovative and wants increased issuance of municipal bonds. He said that Sebi is exploring the expansion of thematic bonds,
