First, heterogeneity of market participants in terms of transaction needs, risk assessments and investment horizons needs to be encouraged to lend greater stability to the market. With the liberalisation and activation of insurance sector, long-term saving through debt instruments is bound to increase and the debt market will have an important role to play in this regard.
Mr.Rangachary, Chairman of the Insurance Regulatory Development Authority (IRDA) had raised the issue of lengthening of maturities of Government Securities and the RBI had assured fulfillment of this requirement of the insurance sector. Also, pension reforms have made a start in the recent Union Budget. This is bound to result in an increased demand for long-term debt securities.