Developing a bond market in India is possibly the longest cherished dream. Probably, as a country we would have set up the maximum number of committees on this, starting with RH Patil committee, way back in late 90s but still struggling to see a developed bond market.

I think enough ink has been spent on this by expert committees but my two thoughts on this:

1) It has to start with developing the govt bond & widen the participation there.

We cannot have a liquid corp. bond market unless govt bond market including its derivatives is liquid.

2) The first thing that govt & @RBI has to do, is to do away with two separate depositories. FM announced for inter-operability between RBI and SEBI depositories two yrs back, but still WIP. Who is responsible for it? @RBI @DasShaktikanta @FinMinIndia @SEBI_India @NileshShah68

3) We cannot have cash market trading on one front end, NDS-OM and its derivatives, IRF on exchange platform, with non-institutional participants having no access to cash market. We have to get cash market liquid on exchange as well and that would require inter-operability.

Today, if our equity market is so liquid, because both cash and its derivatives is available on the same screen. Don't undermine the capabilities of large equity prop brokers and HNIs who will find enough opportunities, making our market more liquid.

If one sees the participants wise break-up, biggest volume makers in IRF are not any banks or PDs but few prop guys, who don't have access to underlying market.

So don't undermine the capabilities and creativity of these guys who can add to liquidity and depth. @sanjeevsanyal

4) Once we get the platform right and bring everyone at par, then comes making the regulations market friendly, so that we can see more participants in derivatives market.

A) MFs are still out of IRF/IRO market, becasuse @SEBI_India has kept some arbitrary 90% co-relation condition with underlying market, for last 5 years and has not got time to review it.

Fail to understand why can't we simply move to duration based hedging.

B) Block window - most of the institutional players are habituated to do deals in size of 5 crs as in cash market. Why can't SEBI allow block window in IRF/IRO as well. Globally, all exchanges have this facility in derivatives. SEBI has still not moved to that.

C) Position Limit - Few of the banks/PDs have their book running in thousands of crs. Agains this, 600 crs limit in 10 yrs and 400 crs in 5 and 15 yr bucket respectively, does not make sense for these entities to look at the product in a serious manner.

5) Finally, exchanges can need to be little more creative and look at launching a corporate bond index for lower rated papers, so that if someone wants to hedge the underlying corp bond, can do so with some basis risk. @ashishchauhan @vikramlimaye @NSEIndia @BSEIndia

Even if after 20 years we have not been able to develop the bond market and its derivatives, widen the base of participants and make accessibility easier, whose fault it is...market participants, regulators or someone else.