Move to give push for corporate bonds: Chidambaram

March 28th, 2008 - 5:23 pm ICT by admin  

A file-photo of P. Chidambaram

Mumbai March 28 (IANS) After removing tax deduction at source on corporate bonds, the government now plans to allow repurchase options in such commercial paper, Finance Minister P. Chidambaram said Friday. “Repos on corporate bonds is waiting to happen and I hope it will happen sooner than later,” the finance minister told reporters here after a meeting with the directors of the Bombay Stock Exchange.

“Securities and Exchange Board of India (SEBI) has moved forward with discussion paper. The Reserve Bank is on board. And we have taken an important step in the budget by withdrawing tax deducted at source from corporate bonds,” he said.

“We are pushing SEBI and the RBI to move forward quickly. You must understand that these are independent regulators who have to make their judgements,” the finance minister added.

Corporate bonds are similar to private placements by companies but these can be traded freely in the debt market. Companies repurchase these bonds if they find it an attractive option after weighing the interest rate and the market price.

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