a big challenge. For instance there is the issue of stamp duty and several overlaps between Sebi and RBI as regard to who will be the guiding authority. These need to be addressed first,” Jagannadham Thunuguntla, equity head, SMC capital, said.
Higher stamp duty and the existing arbitrage due to inter-state variations increases the cost of issuing such papers.
As such, the finance ministry is working on host of other measures to jump-start activity in the corporate bond market for ultimately benefiting India Inc. Apart from asking banks to cut their exposure to top listed companies by 10 per cent of their current levels, it is also planning to allow full reinvestment of debt papers of FIIs.