Page 4 - Corporate Bond Market
Letters: Vibrant bond market
With reference to "Changing lending landscape" (August 29), the Reserve Bank of India's (RBI) move to develop a robust corporate bond market is in line with the international banking trends. A strong and deep bond market will hasten the process of disintermediation (read corporates ignoring lenders). That would be tantamount to an indirect admission by lenders that they do not have the skill set to vet corporate loan proposals. It has taken more than 40 years for the RBI and Indian lenders to realise that they lack appraisal and follow-up skills in corporate lending and that the time has come to develop a vibrant bond market. Over time, lenders have been experimenting with their credit portfolio. Some banks had 30-70 per cent exposure to corporate/retail sectors. Some others experimented with the reverse exposure. That amply proves that lenders have not been able to realise their strengths and adopted a trial-and-error method. That has cost them in terms of a huge pile-up of bad assets
Panel suggests forcing large firms to bond market
RBI in May suggested banks should cut lending to highly leveraged companies and force them to tap the bond market route instead
 "Panel suggests forcing large firms to bond market")