UNIT IV: DEBT MARKETS
Introduction The Debt Market is a financial market where long-term debt instruments are traded. These instruments, such as bonds and debentures, are used by governments and corporations to raise capital for a period typically longer than one year . In this market, the issuer promises to repay the borrowed amount (principal) along with interest to the investor. 💰 Evolution of the Debt Market in India The Indian debt market has undergone a significant transformation from being an underdeveloped, government-dominated market to a more dynamic and mature one. Its evolution can be understood through the following key phases and developments: Pre-1990s: The market was largely informal and illiquid. It was dominated by a handful of institutional investors, and government securities formed the bulk of the trading. Transactions were often opaque and lacked an organized structure. Reforms in the 1990s: Following the economic liberalization of 1991, major reforms were initiated to deve...