Analysis of public debt management practices and its relative impact on indian banks

The central government securities occupy nearly 70% of the total debt market in India. But recent development in Indian financial markets has changed the dimension of the debt market. Scheduled banks and newly emerging private sectors bankers are moving aggressively and in order to expand their business are not hesitating in opting debt. Emergence of new diversified debt financial instruments is strategic answer to their requirement. Due to ever growing debt market there is a strong need to adopt debt management and suitable strategy to focus on undertaking opportunity amylases. The Reserve Bank of India despite tight liquidity conditions during 2012–13 conducted government's market borrowing programme smoothly. In order to encourage savings in rising inflation period, the Reserve Bank issued inflation indexed bonds to risk-averse investors. The study found that the weighted average yield of dated government securities declined and the weighted average maturity increased.