SEBI Chief Outlines Key Initiatives to Enhance Depth of India's Debt Markets

SEBI Chairperson Tuhin Kanta Pandey Outlines Key Initiatives for India's Debt Market Growth

The Indian economy requires patient debt capital for infrastructure, capacity expansion, refinancing, and long-gestation projects, according to SEBI Chairperson Tuhin Kanta Pandey. As the markets regulator, SEBI believes that the corporate debt market is central to India's journey of sustained economic growth.

Speaking at the CareEdge Debt Market Summit 2026, Pandey shared five key measures that the regulator is using to further the thrust on debt markets. Regulation, he emphasized, must evolve to match the changing markets, products, and risks. To improve liquidity and market infrastructure, Pandey highlighted the importance of the market-making framework announced in the Union Budget. SEBI is working with market participants, RBI, and the Ministry of Finance to take this forward.

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The regulator is also working to deepen secondary market activity through new products, such as bond ETFs and derivatives on corporate bond indices. These products can improve liquidity, allow retail investors to access debt markets with smaller ticket sizes, and help institutions hedge interest rate risks.

To encourage specialized participants, SEBI is evaluating a separate regulatory category for debt-focused intermediaries. This can lower costs, reduce entry barriers, and encourage dedicated debt market intermediaries. The regulator is also reviewing compliance requirements for debt-only listed firms to ensure they meet the same rigor as equity-listed companies.

Pandey emphasized that retail participation will not grow merely because products are available, but when products are understood. To address this, SEBI will roll out bond-focused investor awareness campaigns across India, making the vocabulary of bonds, including coupon, yield, duration, rating, and different types of risks, investor-friendly.

To widen the issuer base, SEBI and stock exchanges will conduct outreach programs targeting companies that are eligible but have not yet tapped listed debt markets. The focus will be on SMEs and companies that are ready for the listed debt market but have not yet entered.

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On securitization, Pandey said SEBI has issued a consultation paper to align its securitized debt framework with the RBI's framework for standard assets. The aim is to ease listing restrictions, streamline disclosures, and provide parity for RBI-regulated entities. SEBI is also exploring a pilot project for tokenized corporate bonds, which will test whether tokenization can deliver faster settlement, better traceability, automated servicing, and greater transparency.

The municipal debt securities framework is under review to strengthen urban infrastructure financing and expand retail participation in municipal bonds. Pandey cautioned that while innovation is welcome, it must be carefully evaluated to ensure it is useful and effective.