The Reserve Bank of India (RBI) and the government are working on a framework for issuing sovereign green bonds at par with global standards. RBI Governor Shaktikanta Das said on Monday, the issuance of green bonds provides a strong indication of the country’s commitment to a low-carbon economy. Issuance of green bonds is part of the announcement of Union Budget 2022-23.
In his address at FIMMDA’s annual event in Mumbai, Das said, “The issuance of green bonds provides a strong indication of the country’s commitment to low carbon. EconomyAdding, “It also helps in reducing the cost of capital for green projects.”
He said, “Following the announcement in the Union Budget for 2022-23, the government and the RBI are preparing a framework for issuing Sovereign Green. bondin line with global standards.”
On February 1, Finance Minister Nirmala Sitharaman in her speech for the Union Budget 2022-23 said, Sovereign Green Bonds will be issued to mobilize resources for green infrastructure. The proceeds will be channeled into public sector projects that help reduce the carbon intensity of the economy.
Issuance of sovereign green bonds is part of the total market borrowing of the government in 2022-23.
Further, the RBI governor said, “The orderly development of the sovereign yield curve requires significant market liquidity at key benchmark tenor points and supply of G-Secs of different tenors to a wide variety of market participants to match their investment needs.” Is.”
Further, he said, “For this purpose, the benchmark security issuance strategy was introduced during 2020-21, under which Government securities of specific benchmark tenors of 2, 5, 10, 14, 30 and 40-year (gsecs) are issued. This year, Government securities are also offered with a period of 7 years after market consultation.”
As part of RBI’s continued efforts to increase retail participation in G-Secs, the central bank ‘in November last year to facilitate individual investors to easily invest in Government Securities, State Development Loans (SDLs) and Sovereign Gold’. RBI Retail Direct Scheme was launched. Bond.
Further, in order to ensure liquidity to the retail investor, “Retail Direct Scheme – Making Markets” was notified on January 04 this year. “The scheme requires the primary dealers to respond to buy/sell requests from retail investors across the market hours,” Das said today.
“RBI is continuously engaged in ensuring state-of-the-art infrastructure for trading, settlement and timely dissemination of information in the G-Sec market,” Das said.
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