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