FM asks regulators to speed up financial market reforms

Font Size

Print

Feedback

Email

Discuss

Related Articles

Strict debt fund rules on anvilFIIs sell shares worth Rs 910 cr

Mumbai, Aug 29 : Making it clear that financial innovation is the key to India’s growth, finance minister Palaniappan Chidambaram exhorted regulators to speed up the growth of full-fledged markets for other financial products like interest rates and credit derivatives. He also called for deepening the corporate bond market. Chidambaram was speaking at the inauguration of the first ever Exchange Traded Currency Futures (ETCF) platform at the National Stock Exchange (NSE) in Mumbai.

Referring to the plan of making Mumbai an international financial centre, Chidambaram said, “London and New York are global financial centres, Singapore and Hong Kong have established themselves in the east and now Dubai is also coming up. Now, how does Mumbai position itself?” the minister asked. The need of the hour, he said, is to innovate financial products. “Bonds, currency and derivatives are the priority areas,” he added. He also stressed the need for having deeper markets for exchange-traded interest rate derivatives, credit derivatives and boosting the corporate bond market and urged the regulators to move forward on these.

Speaking at the event, the finance minister congratulated the Reserve Bank of India (RBI) and the Securities & Exchange Board of India (Sebi) for collaborating and getting the regulations in place for the launch. He also lauded the NSE team for having put in place a platform to make trading possible. “This is an important step for financial innovation,” he said.

Within a few minutes of the opening, around 3,000 contracts were traded at around Rs 44.1500 to a dollar. NSE sources said over 300 members and 11 banks have so far registered for participating in the currency futures segment and that the number is likely to go up.

Chidambaram then exhorted the regulators to depict a similar speed while implementing other innovative financial products. He mentioned the examples of stock index futures, which took five years to see the light of day and also the gold exchange traded funds (ETFs) that took another four years to be implemented. Interest rate derivatives, which were launched in 2003, have not taken off, said the minister.