MBMC plans to better its credit ranking for municipal bonds

In an attempt to maintain a high level of credit worthiness, the Mira Bhayandar Municipal Corporation (MBMC) has rolled up its sleeves to improve its ranking in the credit rating system, which are assigned based on assets and liabilities of urban local bodies, revenue streams, resources available for capital investments, double entry accounting practice, tax reforms, private third party audits and other measures towards a transparent governance.

The credit rating gives an indication of the financial performance of civic bodies. Eyeing AA+, the present credit rating of MBMC stands at A+. The step assumes significance as MBMC’s accounting team led by Municipal Commissioner Balaji Khatgaonkar recently participated in a day-long conclave titled “Development of the Municipal Bond Market in India” held under the aegis of the National Stock Exchange of India in collaboration with the Ministry of Housing and Urban Affairs.

Held to strengthen and give a boost to develop a healthier municipal bond (muni-bond) market, the conclave highlighted the importance of financially empowering urban local bodies (ULB) to mobilise funds to improve the urban infrastructure. Experts deliberated on various issues, including structuring, credit rating, accrual accounting and fund raising aspects of the municipal bonds for aspirational municipal corporations to attract investors with its rating and raise funds by issuing the bonds, which are financial instruments, and can be issued by ULB’s to raise money for specific infrastructure projects.