The Viewpoint - FIIs and Debt Securities in India A Case of Broken and Mended Bonds

Bar & Bench March 13 2012

By Niloufer Lam and Soummo Biswas

The main source of capital for Indian corporate expansion has traditionally been the strong domestic bank loan market. Ceiling limits have been imposed however on the exposure of banks to a single borrower and a borrower group. The existence of a vibrant debt capital market is important from a macro-economic perspective to provide mechanisms for greater sources of financing and liquidity and for risk minimization in any economy. In India, while equity capital markets have developed significantly in terms of liquidity, infrastructure and regulatory framework, the debt capital markets . . .

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