June 2016 | srei
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June 2016

Indian Economy Review

Key global and domestic institutions positive about India’s growth story

Even as the global economy experiences turmoil, the Indian economy’s future looks bright. The World Bank has said India can maintain 7.6% GDP growth in 2016-17, which is expected to accelerate to 7.7% in 2017-18 and 7.8% in 2018-19. Finance Minister Arun Jaitley said the government will push ahead with its reform agenda to retain the fastest growing large economy tag and help India move towards becoming "a more developed economy". In addition, he said India needs over $1.5 trillion in investment in the next 10 years to bridge the infrastructure gap. The Ministry of Finance (MoF) expects the country’s growth rate to rise to 8% in the current fiscal owing to above-normal monsoon. Meanwhile, the government and the Reserve Bank of India (RBI) said India's sound macroeconomic fundamentals backed by planned structural reforms and firewalls will help it weather any major fallout of the UK leaving the European Union.

Domestic GDP Growth


Inflation continues to move up

India's retail inflation, measured by the Consumer Price Index, rose to 5.76% in May from a revised 5.47% in April. Wholesale Price Index (WPI) rose 0.79% in May, after rising 0.34% in April. The RBI plans to focus on achieving 5% retail inflation by end-March 2017.

Government explores various routes to meet divestment target

The government has decided to set up a new exchange traded fund (ETF) to sell its shares in public as well as private sector companies, in an attempt to give a leg-up to its divestment plans for the current fiscal. It is also finalising plans to list all four public sector general insurance companies on the exchanges this financial year. It has decided to sell a 10% stake in Housing and Urban Development Corporation (HUDCO) through an initial public offering (IPO). NITI Aayog has selected 32 loss-making firms for strategic disinvestment, including companies such as Bharat Pumps and Tyre Corp, among others. Meanwhile, Power Minister said the ministry will not reduce the government’s stake in power public sector undertakings below 51%.

The Cabinet took the following key decisions:

  • Approved the recommendations of the Seventh Pay Commission on pay and pension.
  • Approved the National Mineral Exploration Policy (NMEP).
  • Cleared the model Shops and Establishment Act that would allow cinema halls, restaurants, shops, banks and other such workplaces to be open 24X7.
  • Gave its approval for partial abolition of the 5/20 rule, which will enable new carriers such as Vistara and Air Asia to start international operations sooner.
  • Withdrew the Drugs and Cosmetic (Amendment) Bill, 2013.
  • Approved the base price and other auction terms for the upcoming sale of airwaves.
  • Gave its nod for signing a protocol amending the existing double taxation avoidance (DTAA) pact with Belgium.
  • Gave go-ahead to the merger of SBI and its associate lenders.

Other major developments in the month

Prime Minister Narendra Modi asked people to declare their undisclosed income by September 30. The government relaxed foreign direct investment (FDI) norms in nine sectors including defence, civil aviation, airports, pharmaceuticals and food products. The government released the draft goods and services tax (GST) legislation. It amended income tax rules to end the uncertainty over the general anti-avoidance rules (GAAR) regime that starts from April 1, 2017. It also approved Rs 10,000 crore 'Fund of Funds for Startups' to support them with an aim to generate employment for 18 lakh persons. Further, it gave its nod for a Rs 6,000 crore special package for the textiles and apparel sector. It notified the setting up of the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT). The government released new guidelines on capital restructuring of public sector companies.

The government is planning to infuse Rs 10,000-12,000 crore in public sector banks in the current fiscal, over and above Rs 25,000 crore provisioned in the Budget. The MoF said subscribers of the public provident fund can prematurely close the deposit scheme after completing five years for reasons such as higher education or expenditure towards medical treatment. It also retained the interest rates on all small saving products for the second quarter of the fiscal. It came up with a stringent monitoring system to keep tabs on expenditure by key ministries. It removed the ‘angel tax’ for investors providing funding to start-ups. Further, it issued new guidelines for the country’s shipbuilding policy.

The government has lined up almost $2.5 billion for providing low cost finance to achieve the target of installing 40 GW grid-connected solar rooftop systems. The World Bank committed $1 billion for India's solar energy programme. The Ministry for New & Renewable Energy launched a scheme for setting up 1,000 MW of wind power projects connected to the transmission network of Central Transmission Utility.

Regulatory developments in the month

The RBI said companies will need to submit for approval plans to issue external commercial borrowings only when they are above a certain threshold limit to be fixed from time to time. Central Board of Direct Taxes (CBDT) exempted seven types of transactions from TDS obligations for digital payment system companies. It also said the 1% tax collection at source introduced in this year’s budget on motor vehicles sold with value exceeding Rs 10 lakh will apply only on retail sales transactions. Further, it relaxed rules for TDS claims by non-resident firms.

Telecom secretary said telecom companies have committed to invest Rs 12,000 crore in the next three months to improve networks. Telecom Commission reduced the annual spectrum usage fee for telecom companies to 3% of revenue for all bands in the upcoming auction slated for July, and brought 4G airwaves purchased in 2010 under the ambit of a formula to calculate the overall fee for each carrier. Department of Telecom issued rules for virtual network operators to set up shop in India. Telecom Regulatory Authority of India (TRAI) issued changed norms for submission of accounts by service providers.

Among key economic indicators released in the month

India’s industrial production disappointed at -0.8% in April, pulled down by the manufacturing sector, compared to 0.1% growth in March. Core sector grew 2.8% in May, against a robust 8.5% in the previous month, pulled down by crude oil, refinery products, steel and cement sectors. The country’s fiscal deficit in the first two months of the current fiscal was Rs 2.28 lakh crore or 42.9% of Budget estimates for 2016-17; the fiscal deficit during April-May of the last fiscal was 37.5% of the Budget estimates. India’s exports in May fell 0.8% to $22.17 billion compared with the same month last year, while imports declined 13.16% to $28.44 billion in May, thereby bringing down trade deficit to $6.27 billion in May compared with $10.4 billion in the same month last year. Current account deficit in the January-March quarter narrowed to $300 million, or 0.1% of gross domestic product, from $7.1 billion, or 1.3% of GDP in the previous quarter. The government said net direct tax collections rose 18% to Rs 43,391 crore during the first two months of the current fiscal. The RBI data showed the country’s external debt at the end of fiscal 2016 increased $10.6 billion, or 2.2%, year-on-year to $485.6 billion, primarily on account of a rise in outstanding nonresident Indian deposits. India’s Nikkei/Markit manufacturing purchasing managers' index (PMI) was 50.7 in May as against 50.5 in April, while services PMI declined to 51 points in May, the weakest since November 2015, from 53.7 in April.

Indicators Current Previous
Monthly WPI Inflation 0.79% (May 2016) 0.34% (April 2016)
Industrial Growth -0.8% (April 2016) 0.10% (March 2016)
Exports $42.74bn (April - May 2016) $44.40bn (April - May 2015)
Imports $53.86bn (April - May 2016) $65.80bn (April - May 2015)
Trade Balance - $11.12bn (April - May 2016) -$21.40bn (April - May 2015)
Gross Tax Collections Rs 49,690cr (April-May 2016-17) Rs 19,889cr (April-May 2015-16)

IIP Growth

IIP Growth

  • India’s industrial production disappointed at -0.8% in April, pulled down by the manufacturing sector, compared to 0.1% growth in March.

IIP-Core Sector Growth

Core IIP Growth

  • India’s core sector growth expanded 2.8% in May, against a robust 8.5% the previous month, pulled down by crude oil, refinery products, steel and cement sectors.

Fiscal Deficit

  • India’s fiscal deficit in April was Rs 1.37 lakh cr or 25.7% of its budgeted target of Rs 5.34 lakh cr for 2016-17; the Centre’s fiscal deficit in 2015-16 was marginally higher at 3.92% of the GDP as against the targeted 3.9%.

Fiscal Deficit

  • India’s fiscal deficit in the first two months of the current fiscal was Rs 2.28 lakh cr or 42.9% of Budget estimates for 2016-17; the fiscal deficit during April-May of the last fiscal was 37.5% of the Budget estimates.

Global Economy Review

Global growth outlook remains glum

The World Bank has lowered its global growth projection for 2016 to 2.4% from January’s forecast of 2.9% citing sluggish growth, low commodity prices, weak global trade and diminishing capital flows.

US Fed & IMF lower US growth outlook

The US Federal Reserve (Fed) kept interest rates unchanged at its latest monetary policy meeting and signalled that it is likely to take an even slower approach on raising the cost of borrowing against the backdrop of slower US job creation and fresh worries about global economic events. The Fed cut its longer-term view of the appropriate federal funds rate to 3% from March’s forecast of 3.3%, but indicated that it plans to raise rates twice in 2016. The central bank also lowered 2016 economic growth forecast to 2% from 2.2%. The International Monetary Fund (IMF), too, lowered the US economic growth forecast for 2016 to 2.2% from 2.4% projected earlier. Meanwhile, the third estimate of Q1 2016 GDP growth showed that the economy grew 1.1% annually, against the earlier estimate of 0.8% and compared with 1.4% in Q4 2015.

World GDP Growth

World GDP Growth

Major Indicators Current Previous Major Global Central Bank Latest Key Interest Rates
US GDP 1.1% Q1 2016 1.4% Q4 2015 US Fed Funds Rate 0.25-0.50%
US unemployment 4.9% June 2016 4.7% May 2016 Bank of England 0.50%
UK GDP 2.0% Q1 2016 1.8% Q4 2015 European Central Bank 0.05%
Euro Zone GDP 1.7% Q1 2016 1.7% Q4 2015 Japan Benchmark Rate 0-0.10%
Japan GDP 1.9% Q1 2016 -1.1% Q4 2015    
China GDP 6.7% Q1 2016 6.8% Q4 2015    
Singapore’s GDP 1.8% Q1 2016 1.8% Q4 2015    

Key economic indicators

  • The government posted $53 billion budget deficit in May, a 38% drop from the same month last year.
  • Trade deficit widened to $60.59 billion in May from $57.53 billion deficit reported a month earlier.
  • Industrial output declined 0.4% in May after a downwardly revised 0.6% increase in April.
  • Retail sales increased 0.5% in May after surging 1.3% in April.
  • Consumer prices increased 0.2% in May after rising 0.4% in April.
  • Non-farm payrolls rose to a seasonally adjusted 287,000 in June, from a revised 11,000 in the preceding month.
  • In the housing sector, existing home sales increased 1.8% to an annual rate of 5.53 million units in May, the highest level since February 2007 following 5.43 million units in April. New home sales declined 6% in May to a seasonally adjusted rate of 551,000, lower than a downwardly revised 586,000 in April.


ECB raises growth and inflation outlook

Keeping its key interest rates unchanged in negative territory in the latest meeting, the European Central Bank (ECB) raised its 2016 outlook for Eurozone’s growth and inflation. The ECB upgraded 2016 economic growth projection of the region from 1.4% to 1.6%, and inflation forecast from 0.1% to 0.2%. The bloc raised its final estimate of Q1 2016 GDP growth to 0.6% quarter-on-quarter (q-o-q) from the second estimate of 0.5%. Year-onyear (y-o-y) growth for the same period was revised to 1.7% from 1.5%.

Key Eurozone economic indicators:

  • Trade surplus in goods was 27.5 billion euro in April 2016 compared with 20.9 billion euros in April 2015.
  • Industrial production rose 1.1% in April after a decline of 0.7% in March.
  • Annual inflation picked up to 0.1% in June from -0.1% in May.
  • Retail sales increased 1.4% in April, lower than 1.8% annual growth recorded in March.
  • The ZEW economic sentiment rose to a seasonally adjusted 20.2 in June from 16.8 in the preceding month.

UK votes to leave European Union

Uncertainty that had built over the UK’s referendum to exit the European Union (EU) came to a shocking end after the UK chose to leave the EU. The results of the referendum spooked global financial markets and instilled fear about the adverse impact not only on the UK and Europe but also on the overall global economy. Following the country’s exit vote, major rating agencies downgraded the UK’s credit rating citing negative impact on the country’s economic performance. The UK confirmed in final estimate that GDP grew 2% on annual basis in Q1 2016 following growth of 1.8% in Q4 2015.

Key UK economic indicators:

  • The public sector net borrowing, excluding state-controlled banks, totaled 9.75 billion pounds in May, down 3.8% y-o-y.
  • Trade deficit fell to 10.5 billion pounds in April from a downwardly revised 10.6 billion pounds in March.
  • Industrial production hit a four-year peak, accelerating to 2% in April from 0.3% in March.
  • Annual retail sales rose 6% in May, following April’s revised pace of 5.2%.
  • Consumer prices rose 0.3% in the year to May, unchanged from April.
  • The ILO jobless rate came in at 5% in three months to April compared to 5.5% over the same period last year.


Chinese central bank confirms 2016 GDP growth at 6.8%

China’s central bank - the People’s Bank of China - in its semi-annual economic forecast kept the country’s 2016 growth projection unchanged at 6.8%. However, it raised its inflation forecast to 2.4% from 1.7% projected earlier and lowered export forecast from growth of 3.1% to minus 1%. Meanwhile, the IMF warned that China's economy must address soaring debt and speed up reforms in its financial sector in order to avoid serious problems.

Key Economic Indicators

  • Exports fell 4.1% y-o-y, more than double 1.8% fall in April, while imports fell 0.4% y-o-y, narrower than April's 10.9% decline, thereby leaving a trade surplus of $49.98 billion, wider than $45.56 billion in April.
  • Fixed asset investment rose 9.6% y-o-y in the January-May period, compared with an increase of 10.5% for the first four months of the year.
  • Retail sales grew 10% y-o-y in May, slightly down from a 10.1% increase in April.
  • Consumer Price Index rose 2% in May from a year earlier, compared with a 2.3% y-o-y rise in April.

Bank of Japan refrains from announcing fresh stimulus

The Bank of Japan (BoJ) refrained from announcing fresh stimulus measures and kept the policy unchanged – interest rate held at minus 0.1% and the annual target for expanding the monetary base at 80 trillion yen. The country’s GDP growth was revised up to 0.5% q-o-q in Q1 2016 following a preliminary reading of 0.4%, and compared with the 0.4% contraction in the previous three months. On a yearly basis, growth was revised up to 1.9% from 1.7% in the preliminary reading and compared with a 1.1% contraction in the previous three months.

Key Japanese economic indicators:

  • Exports fell 11.3% in May from a year earlier, while imports fell 13.8%, leaving a trade deficit of 40.7 billion yen.
  • Industrial production declined 2.3% month-on-month in May after rising 0.5% in April.
  • The leading index rose to a seasonally adjusted 100.0 in April from 99.1 in the previous month.
  • Retail trade fell more than expected by 1.9% y-o-y in May, the third consecutive month of contraction, following a decline of 0.9% in April.

Domestic Fixed Income Review

Domestic G-sec Yield

6 Month LIBOR

Interbank call money rates hovered below the repo rate of 6.50% for most of the month, mainly because of comfortable liquidity in the system amid inflows from the government’s month-end spending and periodic fund infusion from the central bank through repo auctions. Inflows from an open market bond purchase auction by the government also contributed to the decline in call rates. However, to keep the call rate from dipping too low, the banking regulator conducted sporadic reverse repo auctions. Some pressure was also seen on rates owing to outflows towards payments related to advance tax and indirect tax.

Government bond prices (gilts) moved in a narrow range in the month. Yield on the 10-year benchmark – the 7.59%, 2026 paper – ended at 7.45% on June 30, 2016, compared with 7.47% on May 31, 2016. Prices were down earlier following weakness in the rupee and a rise in domestic inflation and global crude oil prices. Sentiments were also dented as the RBI, in its policy statement, maintained its April inflation projections, but said the balance of risks was tilted to the upside. The banking regulator added that considerable uncertainty surrounded the projections for inflation, due to factors such as a rebound in global commodity prices and the implementation of the recommendations of the Seventh Pay Commission. Bonds were also put under some pressure as the RBI chief announced that he would be returning to academia when his term ends in September. Uncertainty ahead of the UK’s referendum weighed on the gilts further.

Losses were, however, capped after the US Federal Reserve (Fed) opted to keep the benchmark interest rate unchanged. Market volatility following the UK’s decision to exit the European Union spurred global investor demand for safe-haven debt, and lent positive cues to the domestic debt market. A word of assurance from RBI Governor Raghuram Rajan that the central bank would take necessary steps to ensure orderly functioning of the financial markets in the wake of the ‘Brexit’ also lent support to prices. Positive outcome of some state development loan auctions enhanced sentiments. Some gilt buying was also witnessed owing to the central bank’s decision to conduct an open market bond purchase auction on June 20. Gilts rose further due to decline in US benchmark treasury yields and the rupee’s intermittent stability against the US dollar.

Among major developments, the government is likely to conduct the proposed buyback and switch operations of government securities worth Rs 75,000 crore only in the second half of the current fiscal. The RBI said the ceiling under Market Stabilisation Scheme has been fixed at Rs 30,000 crore for the current fiscal. It said the Sovereign Gold Bonds held in demat form will be eligible for trading from June 13 on the stock exchanges recognised by the government under the Securities Contracts (Regulation) Act, 1956. It may allow commercial banks to borrow from its daily lending window by pledging top-rated corporate bonds as collateral, in addition to government securities. SEBI said electronic book mechanism will become mandatory from July 1 for issuance of debt securities worth over Rs 500 crore on private placement basis. BSE and NSE received SEBI’s approval to launch electronic book mechanism for issuance of debt securities on private placement basis. BSE decided to launch a new debt platform to provide ease in reporting and settlement of corporate bonds, government securities, commercial papers and certificate of deposits. India Index Services & Products launched a new index called ‘Nifty 1D Rate Index’ to measure the returns generated by market participants lending in the overnight market.


Fixed Income Indicators

Rates & Liquidity

  30-June-16 1 Week Ago 1 Month Ago
Repo 6.50 6.50 6.50
Reverse Repo 6.00 6.00 6.00
CRR 4.00 4.00 4.00
LAF o/s Repo (Rscr) 4767 17808 9946
LAF o/s Rev Repo (Rscr) 22489 24832 3232

Overnight                                         Rate(%)

  30-June-16 1 Week Ago 1 Month Ago
Mibor 6.43 6.40 6.55
Call 6.75 6.50 6.55
CBLO 6.37 6.44 6.47
OIS 1Y 6.57 6.62 6.68
OIS 5Y 6.67 6.77 6.76

CDs                                                             Yield(%)

  30-June-16 1 Week Ago 1 Month Ago
1-Month 6.70 6.79 6.92
3-Month 6.69 6.79 7.17
6-Month 7.09 7.12 7.28
1-Year 7.40 7.40 7.43

CPs                                                   Yield(%)

  30-June-16 1 Week Ago 1 Month Ago
1-Month 7.72 7.88 7.90
3-Month 7.73 7.96 8.07
6-Month 8.35 8.35 8.36
1-Year 8.61 8.61 8.51

Short Term Bonds                                        Yield(%)

  30-June-16 1 Week Ago 1 Month Ago
1 Y G-Sec 6.97 6.98 7.02
1 Y AAA 7.67 7.65 7.68
1 Y AA 7.03 7.05 7.12
2 Y G-Sec 7.78 7.78 7.80
2 Y AAA 8.25 8.25 8.27
2 Y AA 8.27 8.27 8.22

Long Term Bonds                          Yield(%)

  30-June-16 1 Week Ago 1 Month Ago
5 Y G-Sec 7.39 7.42 7.43
5 Y AAA 8.05 8.10 8.11
5 Y AA 8.70 8.75 8.76
10 Y G-Sec 7.45 7.48 7.47
10 Y AAA 8.16 8.25 8.20
10 Y AA 8.98 9.07 9.02

Top 5 Graded G Secs                                   Yield(%)

  30-June-16 1 Week Ago 1 Month Ago
07.59% GS 2026 7.45 7.44 7.47
07.59% GS 2029 7.60 7.59 7.68
07.88% GS 2030 7.64 7.63 7.75
07.68% GS 2023 7.53 7.53 7.58
07.61% GS 2019 7.60 7.59 7.66


  30-June-16 1 Week Ago 1 Month Ago
USD/INR 67.52 76.25 67.16
EURO/INR 75.01 76.38 74.84
GBP/INR 90.52 99.47 98.44
100 JPY/INR 65.91 64.52 60.49
USD/EURO 0.90 0.91 0.90


10 Year G-sec movement


Corporate Bond Yield


Corporate AAA, AA Bond Spreads


Economic Events Calendar

July 12, 2016
  • US Wholesale Trade, May
  • China’s Trade Balance, June
  • China’s Tertiary Index, May
  • Japan’s Producer Price Index, June
  July 22, 2016
  • US Manufacturing PMI, July
  • Eurozone Composite PMI, July
  • Japan’s Manufacturing PMI, July
July 13, 2016
  • US Import and Export Prices, June
  • Eurozone Industrial Production, May
  July 25, 2016
  • US Dallas Fed Mfg Survey, July
July 14, 2016
  • US Beige Book
  •  US Treasury Budget, June
  • US Producer Price Index – Final Demand, June
  July 26, 2016
  • US S&P Case-Shiller HPI, May
  • US Services PMI, July
  • US New Home Sales, June
  • US Consumer Confidence, July
July 15, 2016
  • US Consumer Price Index, June
  • US Retail Sales, June
  • US Empire State Mfg Survey, July
  • US Industrial Production, June
  • US Business Inventories, May
  • US University of Michigan's Consumer Sentiment, July
  • Eurozone Consumer Price Index, June
  • Eurozone Trade Balance, May
  •  China’s GDP, Q2 2016
  • China’s Industrial Production, June
  • China’s Retail Sales, June
  July 27, 2016
  • US Durable Goods Orders, June
  • US Pending Home Sales Index, June
  •  UK GDP (Preliminary), Q2 2016
July 19, 2016
  • US Housing Starts, June
  • US Treasury International Capital, May
  • UK Consumer Price Index, June
  • UK Producer Price Index, June
  July 28, 2016
  • US FOMC Meeting Announcement
  • US International Trade, may
  • Bank of Japan Monetary Policy Review
  • Eurozone Economic Sentiment, July
July 20, 2016
  • Eurozone Consumer Confidence Flash, July
  • UK Labour Market Report, June
  July 29, 2016
  • US GDP, Q2 2016
  • US Employment Cost Index, Q2 2016
  • US Chicago PMI, July
  • US University of Michigan's Consumer Sentiment, July
  • Eurozone Consumer Price Index, July
  • Eurozone Unemployment Rate, June
  • Japan’s Consumer Price Index, June
  • Japan’s Unemployment Rate, June
July 21, 2016
  • US Philadelphia Fed Business Outlook Survey, July
  • US Chicago Fed National Activity Index, June
  • US Existing Home Sales, June
  • European Central Bank Monetary Policy Announcement
  • UK Retail Sales, June
  • Japan’s All Industry Index, May

US Fixed Income Markets - Overview

US treasury prices rallied in June, with the yield of the 10 year benchmark paper settling at 1.49% on June 30 as against 1.83% on May 31. Prices rose as some discouraging US economic data, including labor market figures, service sector numbers, and the latest GDP indicators reduced the probability of a US interest rate hike in June. Bond prices received support after the US Federal Reserve in its policy meet left the interest rate steady and signaled that it is likely to take an even slower approach on raising the cost of borrowing. The week preceding the UK referendum saw some volatility, with prices initially declining on expectation that the UK would vote to remain within the EU. Following the result, prices rose sharply as the UK’s decision to exit the EU ignited worries about global growth, amid turbulence in the financial markets. S&P’s decision to cut the UK’s sovereign debt rating to AA from AAA after the referendum outcome heightened concerns and gave bonds another shot in the arm.

US 10 Year Govt. Bond Yield


Learning Centre– Peer to Peer Lending

Most companies require some start-up capital to commence operations. For this, entities approach financial intermediaries such as banks for a loan. However, some entities may not be eligible for a loan from a bank for failing to meet prescribed lending norms. For instance, the banks may be unwilling to lend to an individual with no credit history (first time borrower). For such entities, capital can be accessed outside of conventional banking channels. Peer to peer lending is a form of funding for individuals who require capital, but cannot approach financial intermediaries. Currently, this form of lending is done via an online platform through which lenders interact with borrowers.

How does it benefit the lender?

Lenders with excess funds can provide capital to borrowers and earn interest. The rate of interest charged is higher than what most banks demand, and varies between 0% to 36%, with a tenure of up to 3 years. Currently, the maximum loan amount that can be lent is Rs 5 lakh. However, the risk to the lender is that there is no legal recourse if the borrower does not repay. Hence the risk of lending is greater.

How does it benefit the borrower?

Borrowers gain access to capital for first time funding requirements. With many players now entering the space, the RBI has in recent months released a discussion paper on proposed regulations for the segment. The apex bank has proposed that customers on the online platform should adopt a company structure to bring the entity into the RBI’s ambit. The regulator has also proposed that the minimum capital be Rs 2 crore.

When the paper is trading at a price equal to its face value, it is said to be trading at par. For a par bond, the coupon rate is equal to its yield to maturity.


CRISIL Research, a Division of CRISIL Limited has taken due care and caution in preparing this Report. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL is not liable for investment decisions which may be based on the views expressed in this Report. CRISIL especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of this Report. CRISIL Research operates independently of, and does not have access to information obtained by CRISIL’s Ratings Division, which may, in its regular operations, obtain information of a confidential nature which is not available to CRISIL Research. No part of this Report may be published / reproduced in any form without CRISIL’s prior written approval.