Sebi to test bond tokenisation, eyes deeper corporate bond repo market

The pilot, being taken forward with the RBI, will test shared-ledger technology for faster settlement, automated coupon payments and other bond-servicing events

The Securities and Exchange Board of India (Sebi) plans a pilot to test tokenisation of bonds, exploring whether shared-ledger technology can make settlement quicker and more efficient.

 

The pilot, undertaken in coordination with the Reserve Bank of India (RBI), will examine whether a shared ledger can enable simultaneous transfer of securities and money, reducing reconciliation costs. It will also consider the feasibility of automated coupon payments and other servicing events through smart contracts, said Amarjeet Singh, whole-time member, Sebi, on Thursday.

 

The initiative is part of Sebi’s efforts to improve accessibility, transparency and efficiency in the corporate bond market. Singh said that tokenisation is not intended to create a separate trading market, but to assess whether technology can make the existing market simpler, faster and more efficient.

 

 

Separately, Sebi is examining measures to deepen the corporate bond repo market, which accounts for less than 1 per cent of the overall repo market. Corporate bond repo volumes are around ₹6,000 crore on a typical day, Singh said.

 

The regulator is looking at measures to deepen the segment alongside securities lending and borrowing and a prudent framework for short selling. Some of these issues extend beyond Sebi’s remit and the regulator is engaging with relevant authorities, he said.

 

The measures come as Sebi seeks to improve secondary-market liquidity in corporate bonds. Of nearly 33,000 outstanding instruments, only 400-500 trade on a typical day. The regulator is also working on a formalised market-making framework proposed in the Union Budget for 2026-27.

 

A key challenge is fragmentation, with nearly 33,000 instruments spread across around 7,200 issuers. Sebi is examining ways to concentrate issuances in fewer benchmark International Securities Identification Numbers, alongside issuer buybacks, liquidity-support arrangements and further development of the request-for-quote platform.

 

India’s outstanding corporate bonds have grown from about ₹17.5 trillion at the end of FY15 to over ₹60 trillion at the end of July 2026.