Why is Bond Market not much Developed in India Compared to Other European Countries


2 Answer(s)


the reason the bond market is not developed in india is lack of infrastructure, people mindset , etc. but the governmnet is trying to bring out more products and ease of investment for foreigners to develpo the market. one more thing is the retail invester can participate in g-sec auction is 5% of the total amount.other than that banks, pd will subscribe the bonds


There are 2 kinds of bond market - corporate and government.

The government bond market is huge in India. The corporate bond market is very very small. This is because of -

1. Very stringent government regulations for companies that issue debt

2. Under these requirements banks have to hold large amounts of g-sec bonss to maintain their liquidity ratio.

3. Hence they get no flexibility in investing in corporate bonds