1. Corporate bonds and debentures’ mean debt securities which create or acknowledge indebtedness, including 1. debentures, 2. bonds, 3. commercial papers, 4. certificate of deposits, and 5. such other securities of a company, a multilateral financial institution or a body corporate constituted by or under a Central Act or a State Act, whether constituting a charge on the assets of the company or body corporate or not, and includes convertible instruments and instruments of a perpetual nature, 6. but does not include (a) debt securities issued by Central Government or a State Government, or such other persons as may be specified by the Reserve Bank, (b) security receipts, and (c) securitisation notes. 2. The investors in corporate bonds are banks, insurance companies, pension funds, mutual funds, foreign portfolio investors, financial institutions, individuals, and other entities 3. Here we discuss about those who are regulated by RBI. Now Foreign Portfolio Investors (FPIs) are registered by SEBI and regulated by both SEBI and the RBI ## Foreign Portfolio Investors 1. [Foreign Investment in India (Various Routes)](Foreign%20Investment%20in%20India%20(Various%20Routes).md) ## Banks 1. Banks maintain investments in SLR securities as part of mandatory requirement called SLR, and they are also allowed to invest in Non-SLR securities subject to guidelines. 1. To recall, bank earnings can be broken down into = Interest income (Loans + SLR investments + Non-SLR investments ) + Non-interest income 2. Non-SLR securities are securities issued by corporates, bank, financial institutions, State and Central Government sponsored institutions, Special Purpose Vehicles (SPVs) etc., and capital gains bonds and bonds eligible for priority sector status. 3. So Corporate bonds form part of Non-SLR securities 4. Unlisted 1. Now a bank shall ensure that the carrying amount of a bank’s investment in unlisted non-SLR securities shall not exceed 10 per cent of the carrying amount (i.e., value carried to the Balance Sheet) of its total investment in non-SLR securities as at the end (i.e., 31st March) of the previous financial year. Here few types of securities are not reckoned as ‘unlisted non-SLR securities’. 2. An additional 10% is allowed provided that such investment is in securitisation notes issued for infrastructure projects, and bonds / debentures issued by ARCs. 3. A bank is also not allowed to invest in non-SLR securities of original maturity of less than one-year, but it does not apply to investments in Commercial Papers, Certificates of Deposits, and NCDs with original or initial maturity up to one year issued by corporates (including NBFCs), in line with RBI guidelines. 5. Listed 1. There is no specific % cap and only overall prudential limits 6. It is covered under the [Reserve Bank of India (Commercial Banks – Classification, Valuation and Operation of Investment Portfolio) Directions, 2025](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=13148#30), dated November 28, 2025 ### Repo in Corporate Bonds 1. A bank shall undertake [repo in corporate bonds](Repos%20and%20Tri-Party%20Repo.md) as per guidelines given in [Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018](https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11345&Mode=0) ### CP/CDs/NCDs (up to 1 year) 1. A bank shall invest in Commercial Papers-CPs/Certificate of Deposits-CDs/Non-Convertible Debentures-NCDs through OTC Transactions as per guidelines given in [Reserve Bank of India (Certificate of Deposit) Directions, 2021](https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12108&Mode=0) and [Master Direction – Reserve Bank of India (Commercial Paper and Non-Convertible Debentures of original or initial maturity upto one year) Directions, 2024](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12592) ### Secondary Market Trading 1. Stock Exchanges (retail) 1. In April 2007, SEBI permitted both [BSE](https://www.bseindia.com/markets/debt/debt_corporate_EOD.aspx?curPage=1) and [NSE](https://www.nseindia.com/market-data/bonds-traded-in-capital-market) to have in place corporate bond trading platforms 2. OTC (bilateral deals) 1. RFQ - trade execution platform available on [NSE](https://www.nseindia.com/static/trade/rfq-faqs) and BSE 2. Reporting-All the secondary market OTC trades in corporate bonds and securitisation notes by banks shall be reported within 15 minutes of the trade on any of the recognised stock exchanges in the format provided by SEBI 3. Clearing & Settlement 1. All OTC trades in corporate bonds and securitisation notes are cleared and settled through a SEBI recognised clearing corporation 2. So exchange clearing like NSE Clearing provides a facility for settlement of deals reported on its platform (CBRICS-a reporting platform, RFQ-trading platform) and the corporate bond repos reported on CCIL-FTRAC _platform_ 3. Repo in corporate bonds 1. OTC 1. OTC Repos in Corporate bonds are reported to FTRAC (_CCIL_) _platform_. 2. Stock Exchanges - NSE and BSE 1. Repos on exchange are always triparty repos 2. Clearing & Settlement managed by clearing houses like AMC Repo Clearing Limited (ARCL), and Indian Clearing Corporation Ltd (ICCL) on NSE and BSE respectively. 3. BSE & NSE launched repos in corporate debt securities on May 28, 2018 and June 2018 respectively 4. [Online bond platforms](https://www.sebi.gov.in/intermediaries.html) (retail) 1. April 2022 - SEBI introduced the SEBI (Issue and Listing of Non-Convertible Securities) (Amendment) Regulations, 2022, to regulate Online Bond Platforms, requiring them to register as stock broker 5. Feb 27, 2025- SEBI announced the Launch of ‘Bond Central’ - A Centralised Database Portal for Corporate Bonds 6. ==Statistics on [Corporate Bonds](https://www.sebi.gov.in/statistics/corporate-bonds.html)== ## Regulatory Framework 1. [SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021](https://www.sebi.gov.in/sebiweb/home/HomeAction.do?doListing=yes&sid=1&ssid=3&smid=0) 2. [Reserve Bank of India (Certificate of Deposit) Directions, 2021](https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12108&Mode=0)  3. [Master Direction – Reserve Bank of India (Commercial Paper and Non-Convertible Debentures of original or initial maturity upto one year) Directions, 2024](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12592) ## Groups/Committees [Few reports](RBI_Group-Committee_20160818_Report%20of%20the%20Working%20Group%20on%20Development%20of%20Corporate%20Bond%20Market%20in%20India.pdf#page=4&selection=35,3,36,21) by *(RBI and outside RBI)* expert Committees on development of corporate bond markets in India are: 1. 2005 - Report of High Level Expert Committee on Corporate Bonds and Securitisation in 2005 (R. H. Patil Committee). [Link](https://www.sebi.gov.in/reports/reports/dec-2005/report-of-high-level-expert-committee-on-corporate-bonds-and-securitization_25676.html) 2. 2007 - Report of the High Powered Expert Committee on Making Mumbai an International Financial Centre in 2007 (Percy Mistry Committee). [pdf](GoI_Group-Committee_20070210_The%20High%20Powered%20Expert%20Committee%20(HPEC)%20on%20Making%20Mumbai%20an%20International%20Financial%20Centre_Chairman-Percy%20S.%20Mistry.pdf) 3. 2009 - Report of the Committee on Financial Sector Reforms (CFSR) titled *A Hundred Small Steps*, also known as Rajan Committee, 2009. [pdf](RBI_Report:Committee_20080912_Committee%20on%20Financial%20Sector%20Reforms_2008_A%20Hundred%20Small%20Steps_Chairman-Raghuram%20Rajan.pdf) 4. Sept 3, 2019 - Report of the Task Force on the Development of Secondary Market for Corporate Loans, constituted on [May 29, 2019](RBI_Press%20Release_20190529_Reserve%20Bank%20of%20India%20Constitutes%20Task%20Force%20on%20the%20Development%20of%20Secondary%20Market%20for%20Corporate%20Loans.pdf) 5. 2021 - Unleashing the potential of the Indian Debt Capital Markets, by City of London Corporation. [pdf](City%20of%20London%20Corp_Reports_2021_Unleashing%20the%20potential%20of%20the%20Indian%20Debt%20Capital%20Markets.pdf) 6. December 2025 - Deepening the Corporate Bond Market in India, by Niti Aayog==. [pdf](GoI_Reports_202512_Deepening%20the%20Corporate%20Bond%20Market%20in%20India.pdf) ## References 1. Developments in the Corporate Bonds and Securitization Markets (between 2005 to Feb 2012). SEBI. [Link](https://www.sebi.gov.in/sebi_data/attachdocs/1330492152558.pdf) 2. Harun R. Khan. (Nov 06, 2015). Corporate Bond Markets in India: A Framework for Further Action - Shri Harun R. Khan, Deputy Governor – October 27, 2015 at FICCI CAPAM – 2015, Mumbai. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=980) 3. Harun R Khan. (Apr 19, 2016). Indian Debt Market 2020 : The Underpinnings & the Path Ahead. (Shri Harun R Khan, Deputy Governor - April 15, 2016 - at the 17th Annual Conference of FIMMDA-PDAI, London). [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=997) 4. RBI. Aug 18, 2016. ==Report of the Working Group on Development of Corporate Bond Market in India (Chairman-Harun Rashid Khan==. [pdf](RBI_Group-Committee_20160818_Report%20of%20the%20Working%20Group%20on%20Development%20of%20Corporate%20Bond%20Market%20in%20India.pdf) 5. T. Rabi Sankar. (Aug 24, 2022). Corporate Bond Markets in India – Challenges and prospects - Keynote address delivered by Shri T. Rabi Sankar, Deputy Governor, Reserve Bank of India - August 24, 2022 - at the Bombay Chamber of Commerce & Industry, Mumbai. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1322)