In an interview with The Financial Express on the sidelines of the Invest India Risk Management Retreat 2000 in Goa, Dr Sen said the remarkable experience of the National Stock Exchange (NSE), the National Securities Depository Ltd (NSDL) and the National Securities Clearing Corporation Ltd (NSCCL) was already there in respect of equity markets and could be replicated to create a vibrant market for corporate debt soon.

"Riskxpress.com has already developed a negotiating platform for debt trading. Using these experiences, we should be able to quickly develop a modern secondary market for corporate debt fairly soon. I am hopeful that the concerned agencies will take the required collaborative initiative," Dr Sen said.

Riskxpress.com, a The Chatterjee Group (TCG) outfit, has developed an online trading platform for the debt market. ICICImarkets.com is also doing something similar.

He said the corporate debt market was growing fast, but was still a telephone-cum-fax market. So far there had not been any major failure, he pointed out, but systemic weaknesses had to be corrected. "Banks and financial institutions have an important role in the development of a modern secondary market for corporate debt not merely for themselves, but for the interest of the Indian economy," Dr Sen pointed out.

The IIBI chairman was also at the forefront of a debate, during the Retreat, of getting NSCCL to also handle debt clearing, instead of setting up a separate clearing corporation to do so. He said this was all the more urgent, since bond mutual funds were growing and insurance companies and pension fund managers were preparing to come to the markets soon.

"In the financial markets in India, many old systems and practices are being replaced by new systems and practices. Ultimately, each market segment can have an impact on some other markets," he said.

Market players, he said, take time to get adjusted to the new systems and practices and therefore, there is a need to list down systemic deficiencies for each market segment and disseminate it so that there is an overall understanding of the measure of systemic risk to all players, regulators and policy-makers.