SEBI has launched an information database on municipal bonds. As part of its efforts to develop the bond markets, an outreach programme on municipal bonds and municipal finance was organised by SEBI in the national capital on January 20 and 21.
Key points
- The information database contains a wide range of information in the form of statistics and regulations, circulars, guidance note and FAQs issued by SEBI in respect of municipal debt securities.
- The repository contains various checklists for prelisting requirements and sample letters and certificates from various intermediaries to be obtained by an issuer who plans to tap the municipal bond market.
About Municipal Corporation Bonds
- Municipal Corporation Bonds are bonds issued by urban local bodies to raise money for financing specific projects such as infrastructure projects.
- Under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) scheme, cities have been encouraged to mobilize resources by issuing municipal bonds.
- Bengaluru Municipal Corporation floated municipal bonds for the first time in India in 1997, followed by Ahmedabad Municipal Corporation in 1998.
- The Indore Municipal Corporation became the first municipal corporation to list on the NSE in 2018, while Ghaziabad Municipal Corporation became the first municipal corporation to issue green bonds in India in 2021.
- According to the Securities and Exchange Board of India (SEBI) regulations (2015), to issue such bonds, municipalities must: Not have negative net worth in any of the three preceding financial years, and Not have defaulted in any loan repayments in the last one year.
