FIIS make a re­turn to In­dia’s debt mar­ket


Bank of In­dia’s con­tin­ued liq­uid­ity sup­port through a se­ries of open mar­ket oper­a­tions (OMOS) has helped calm the bond mar­kets, bring­ing down bond yields. In Oc­to­ber, it an­nounced ₹36,000 crore of OMO pur­chases and met its tar­get in three tranches through­out the month. RBI has an­nounced

₹40,000 crore of pur­chases through the same route in Novem­ber. RBI’S mon­e­tary pol­icy panel has also de­cided to adopt a neu­tral liq­uid­ity stance. Un­der this, RBI aims to keep call money rates closer to the repo rate.

Signs of sta­bil­ity in the ru­pee and the ebbing of global trig­gers (par­tic­u­larly oil) have drawn FPIS back to the In­dian debt mar­kets, ac­cord­ing to Rad­hika Rao, an econ­o­mist at DBS Bank Ltd. “The pre­mium on pol­icy tight­en­ing risks has also re­duced af­ter the cen­tral bank kept rates on hold last month and softer in­fla­tion pro­file low­ers the odds for a move in De­cem­ber,” Rao said in an email from Sin­ga­pore.

The trend has, how­ever, not re­versed in eq­uity mar­kets, where FIIS have sold nearly $5.64 bil­lion since Jan­uary.

Be­tween 24 Oc­to­ber and 5 Novem­ber, they were net sell­ers of $1.01 bil­lion.

The fin­tech and pay­ments in­dus­try, in­clud­ing banks and non-bank­ing fi­nan­cial com­pa­nies (NBFCS), is con­sid­er­ing ar­ti­fi­cial in­tel­li­gence (Ai)-based so­lu­tions for ful­fill­ing E-KYC (know-your­cus­tomer) re­quire­ments as there is no clear mech­a­nism in place to ver­ify cus­tomers dig­i­tally, two peo­ple fa­mil­iar with the devel­op­ment said on con­di­tion of anonymity.

Rep­re­sen­ta­tives from the in­dus­try have held sev­eral rounds of dis­cus­sions on al­ter­na­tives to Aad­haar-based E-KYC, said these two peo­ple.

“There will be more rounds of de­lib­er­a­tions and con­sul­ta­tions and once the so­lu­tion is fi­nal­ized, it will be pre­sented to re­spec­tive reg­u­la­tors such as the Re­serve Bank of In­dia

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