“If NaBFID offers credit enhancements to such municipalities, we can ensure that we have strong investor interest,” he said at an event on infrastructure financing here.
He said only 100 of the 5,000 civic bodies are qualified, leaving a “long queue” of bodies that can raise funds. money It contributed to improving credit. The government has declared NaBFID as a public financial institution.
The senior official of the capital The markets regulator also said this will not work in perpetuity for any city agency.
He later told reporters that any such measure would have to come from the Reserve Bank.
It may be noted that municipal bonds have not taken off despite consistent efforts by policy makers over the past few years. Speaking at the same event, Reserve Bank Deputy Governor M. Rajeshwar Rao asked NaBFID to think of offering innovative solutions such as providing partial credit enhancements through rating upgrades or providing first loss default guarantees. “As NaBFID develops its internal rating model for credit assessment, it could also offer products like credit default swaps (CDS), which would go a long way in building confidence in the bond market,” Rao added.
Rao made a number of other suggestions to Nabfid, especially on the green finance front.
He argued for insurers and pension funds to have a green investment mandate, just as they do for corporate bonds.
We also need green market infrastructure institutions and Nabfid can be the catalyst in that, he said, adding that there is a need to integrate sustainable reporting systems.
He also said that it is necessary to get the entities that provide insurance to support green finance under some regulatory framework.
Infrastructure investment trusts have barely scratched the surface and Nabfid can look to state governments to exploit this avenue, he said.
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.