There has been a steady increase in the corporate bond issuances and the outstanding amount has crossed Rs. 40 lakh crore as of March 2022. As we all know, corporate bond market acts as a risk diffuser within the financial system, redistributing the risk among a larger set of investors.
While the gradual shift in the flow of credit from banks to market-based mechanisms has been evident, the road has been longer in our case as we can still see the centrality of banks in the economic system.