December 12, 2022
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Wholesale corporate debt market to get fillip
The Association of Mutual Funds in India has anticipated that AMC Repo Clearing Ltd (ARCL) will become operational from January 2023, which will provide a fillip to the wholesale corporate debt market.
“We want the government to allow the mutual fund industry to manage funds of pension, provident and insurance firms. This will help the MF industry ensure greater efficiency in managing the resources in a cost-effective manner. The industry can achieve the target of doubling the asset under management to Rs 80 lakh crore much earlier than the targeted year of 2027,” AMFI chief executive N S Venkatesh said at a programme organised by the Indian Chamber of Commerce.
Speaking about the ARCL, he said the equity capital of the entity is currently at Rs 150 crore and is contributed by all asset management companies (AMCs) in proportion to their AUM of open-ended and debt-oriented mutual fund schemes for 2020-21.
“With this, AMCs will be able to improve their return by using corporate debt securities as against the one and only option of government securities with guaranteed liquidity.
“Market regulator SEBI is to be given credit for this, which will go a long way in developing the debt market in India,” he said.
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