Sebi for PF investments in municipal bonds

Mumbai: Capital markets regulator Sebi’s executive director Pramod Rao on Friday urged pension funds (PFs) and insurers to support municipal bonds by subscribing more to such papers.

He said the size of the municipal bond market is much smaller when compared to the US, where the overall municipal bond outstanding is $4 trillion, or the size of the Indian economy, and the annual issuances exceed $300 billion.

“Our municipal bonds are quite small compared to what we witness in the US. I would urge pension funds and insurers to look at increasing support to municipal bond issuances,” he said, speaking at an event organized by industry lobby grouping Assocham here.

Very few civic bodies have used the route to raise long-term resources for funding, even as policymakers have been trying hard to increase their usage.