In a little less than a year, the character of the Indian bond market has radically changed. What has added to the heady cocktails of low volume-high volatility market is short selling by a few banks and primary dealers. Both the government and RBI, its merchant banker, have been trying hard to bring back normalcy to the bond market. Although a few large corporate houses are present in the government bond market these days, they cannot substitute the PSBs. It may not be a cakewalk for the government to borrow Rs6.06 trillion with the PSBs staying away from the bond market, which now rivals stock market in volatility.

Source: Mint April 23, 2018 03:55 UTC