ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Trading in Public Sector Bonds

Trading in Public Sector Bonds Jairaj Kapadia A KEY recommendation by the Nadkarni committee which submitted its report to the Reserve Bank of India last week on trading procedures for public sector undertakings' bonds is likely to prove embarrassing to the RBI. The recommendation is about repurchase of the bonds for which the committee has desired the practice of ready forward transactions to continue, The RBI banned this practice as it commenced investigation in the stock-securities-banks scam. However, the committee has stated that a ban on the so-called REPO transactions would be counterproductive, as they serve a useful purpose as a money market instrument and The Week's Companies facilitate liquidity of banks and bulk investors in PSU bonds in the short run.

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