The RBI said in its release on Thursday that it was actively considering accepting corporate bonds as collateral in its liquidity operations. While these measures will have a positive effect on turnover and transparency in pricing for corporate bonds, more steps may need to be taken to deepen the market to the desired level, bond market participants said. “There is no magic wand for the bond market and things cannot happen overnight. For instance, RBI’s rule to make bank loans expensive for so-called specified borrowers will prod these companies to meet their funding requirements through corporate bonds. The biggest measure is still awaited: RBI accepting corporate bonds as collateral in its liquidity operations.

Source: Mint August 28, 2016 18:11 UTC