InvestorQ : How exactly does the Indian debt market function in practice and is it really an efficient market?
Deepa Salunkhe made post

How exactly does the Indian debt market function in practice and is it really an efficient market?

Answer
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diksha shah answered.
1 year ago


The Indian debt market is a market meant for trading (i.e. buying or selling) fixed income instruments. Fixed income instruments could be securities issued by Central and State Governments, Municipal Corporations, Govt. Bodies or by private entities like financial institutions, banks, corporates, etc. Simply put, a bond/debt can be defined as a loan in which an investor is the lender. The issuer of the bond pays the investor interest (at a predetermined rate and schedule) in return for the amount invested. The Indian debt market offers a variety of debt instruments, offered by the Government and non-Government entities. The factors that are propelling the growth of the market are given below:

Introduction of new instruments

Increased liquidity

Deregulation of interest rates

Improved settlement systems