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- Govt Plans Bond Market Discounts For Senior Citizens, Women, And Retail Investors | SEBI Proposal Released
Mumbai2 minutes ago
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The central government is soon planning to give discounts to senior citizens, women and retail investors investing in the debt market.
Market regulator Securities and Exchange Board of India i.e. SEBI has issued this discount proposal on Monday.
Through this, bond issuing companies or the government will be able to offer higher interest rates on investments or discounts in the issue price to certain types of investors.
What is debt market, why is the government giving discount?
Debt market is a market where companies or governments issue bonds to borrow money. Like gold bonds. But the problem of this market is that people invest less here, especially in the secondary market where old bonds are bought and sold.
When liquidity is low, it becomes difficult to sell bonds. SEBI plans to provide incentives to some investors, such as cashback or fee concessions. This will increase the share of retail investors in the debt market.
Incentive may be available in the form of cashback or discount
SEBI’s proposal says that issuers can give incentives to buyers of long-duration bonds (which are for 5-10 years). Such as, cashback (money back), discount in fees (less charge), or other benefits.
But this discount will be available only to those investors who buy bonds for the first time. If they later sell these bonds to someone else, that buyer will not get this discount or higher interest.
Currently, under SEBI rules, the bond issuing company or any person associated with it cannot give any kind of reward or discount.
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