Call to develop corporate bond market

There is an inadequate corporate bond market in India and this needs to be developed, said PJ Nayak, chairman and managing director of UTI Bank.

Nayak was sharing his views on what the financial markets and institutions in India need in the next 15 years ranging from a better corporate bond market to a need for financial literacy, at a symposium organised by the Indian School of Business (ISB) on Friday.

"Besides, I also believe that the focus should lie on financial innovations for missing customers like the urban and the rural poor. Neither transaction costs nor selling skills should vary with distance," he added.

R Ravimohan, MD and chief executive officer of Crisil Limited, said, "Indian markets need instruments like subordinate debt and debt with more innovative options to fund long-term infrastructure projects."

Ravi Narain, MD and CEO of the National Stock Exchange of India Limited (NSE), emphasised on the need for Indian markets to be on a global scale besides ensuring that investors can move from one asset to another easily.

"At present, only two per cent of our household savings come into the markets. In the next 15 years, we should try and improve this percentage to 15 per cent," he added. Besides, there is a need for a concerted financial literacy programme among all, Narain said.

"Foreign individuals are not allowed to trade in Indian markets. These controls may slacken in the years to come," C B Bhave, chairman and managing director of the National Securities Depository Limited, said.

Sanjay Nayar, chief executive officer of Citigroup-India, summed up his views by saying that the debt market is clearly underdeveloped.

"There is a huge opportunity in activating the bond market. Bond finance will do well even for retail investors," he said.