large scale image
LCP Image

Back to TSCFM News

Indian Banks Seek RBI Permission for Global Bond Trading Ahead of Inclusion in Indices

February 12, 2024

Indian Banks Seek RBI Permission for Global Bond Trading Ahead of Inclusion in Indices

As Indian sovereign debt gears up for inclusion in global bond indices, several banks have urged the Reserve Bank of India (RBI) to permit international electronic trading platforms (ETPs) for executing trades in domestic government securities. This move aims to streamline market access, particularly for overseas clients.

Following JP Morgan’s recent decision to incorporate Indian bonds into their index, banks representing foreign portfolio investment (FPI) clients have pushed for the allowance of ETPs like New York-based MarketAxess to handle trades in Indian bonds.

One source familiar with the matter highlighted the potential benefits, emphasizing the efficiency of a single ETP system, especially in terms of time. Currently, transactions predominantly rely on the traditional ‘voice’ method, which involves communication between foreign clients and bank sales teams, followed by execution through trading desks.

The RBI’s response to queries regarding this development remains pending at the time of reporting. However, in a statement on development and regulatory policies, the RBI expressed intent to review the regulatory framework concerning electronic trading platforms.

Analysts anticipate significant overseas investment, estimating flows ranging between $25-40 billion, driven by JP Morgan’s index inclusion decision. Moreover, Bloomberg Index Services’ contemplation of adding Indian government bonds to its Emerging Market Local Currency Index could potentially attract around $2 billion in investments.

As global interest in Indian bonds grows, facilitating easier access through electronic platforms aligns with the evolving dynamics of international finance, potentially fostering greater participation from foreign investors and bolstering India’s position in the global bond market.

Recommended for you ...

Modi, Mauritius, and Sri Lanka Leaders Unveil Digital Payment Services
Modi, Mauritius, and Sri Lanka Leaders Unveil Digital Payment Services

February 12, 2024

Public Sector Banks Surpassing Private Peers, Investors Reconsidering Choices
Public Sector Banks Surpassing Private Peers, Investors Reconsidering Choices

February 12, 2024

RBI doubles bullet repayment gold loan limits for urban co-op banks
RBI doubles bullet repayment gold loan limits for urban co-op banks

October 09, 2023

Enquire Now
REQUEST A CALLBACK
Chat on WhatsApp