Category: Bonds

Partial Credit Guarantee Scheme (PCGS 2.0) : Hits and Misses

Finance Minister, Nirmala Sitharaman last week, as part of Covid Relief Atmanirbhar package had announced Partial Credit Guarantee Scheme 2.0 (PCGS 2.0) for Micro Finance Institutions (MFIs) and Non- Banking Financial Companies. The stated objective of the scheme is “to address temporary liquidity/cashflow mismatches of otherwise solvent NBFCs/HFCs/MFIs without having to resort to distress sale of their assets for meeting their commitments, and to enable availability of additional liquidity to them for on lending”. ISF in an article published on […]

List of NCD Issuance’ till mid-May – its same old story!

The thirty day window for the fourth and last tranche of TLTRO-1 will close in another one week and its already been more than twenty days since bidding for TLTRO-2 took place, however the NCD issuance data till date (15th May) shows that there hasn’t been any trickle down of capital to lower rated entities yet. Almost rupees thirty thousand crore worth of NCDs have been raised during the first half of May – this excludes the publicly placed NCDs […]

Rating the “Rating Agencies”

The credit rating agencies (CRAs) have been under the scanner over the past couple of years because of their ‘perceived inability’ to accurately gauge the risks in various financial assets they have rated. Securities and Exchange Board of India (SEBI) regulates the conduct of the rating agencies and in recent times has taken several measures to make the rating process more transparent, objective and fair. These reforms have included: Enhanced Governance Norms including:MD/CEO of a CRA not to be a […]

India needs PCG 2.0 and not TLTRO 2.0!

Over the past few days, RBI Governor has been actively engaging with the various industry bodies of the financial sector – NBFCs, MFIs, HFCs, Mutual Fund, IBA ( PSU and Private Banks) to gauge the needs of the stakeholders and also to specifically understand the rationale for lower subscription of TLTRO 2.0. In the below article, we discuss ‘ Why the economy needs Partial Credit Guarantee Scheme (2.0) and not the much publicised TLTRO 2.0 ? ‘ : A. The […]

Making Indian Corporate Bonds Palatable to Investors

The recent crisis in mutual fund industry has again brought forth the debate on development of corporate bonds market. H.R. Khan’s Report of the Working Group on Development of Corporate Bond Market in India had grouped the aspects related to the development of corporate bond market under 7 “I” framework – Issuers, Investors, Intermediaries, Infrastructure, Incentives, Instruments and Innovations. This article analyses steps that can be taken to increase Investor participation in the market which in turn will increase the […]

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