Early implementation of the draft bankruptcy code submitted by the Viswanathan Committee alongwith providing legal certainty to close-out netting for certain transactions would address the two key issues for enabling a credit market. Work is already underway in addressing some of the market infrastructure issues, including development of an electronic platform for repo in corporate bonds.
Market making in corporate bonds has proved to be a challenging issue, particularly the funding of brokers. Banks are explicitly permitted to fund market making activities but at the end of day, it will be their call based on commercial judgement. Separate structure for market making with direct/indirect support of the Government could be a possible way out. 34.