SDG 9: Industry, Innovation and Infrastructure | SDG 16: Peace, Justice and Strong
Institutions Institutions: Ministry of Finance | Securities and Exchange Board of India (SEBI)
The Securities and Exchange Board of India (SEBI) has issued a new Master Circular, dated October 15, 2025, consolidating all previous guidelines related to the issue and listing of various fixed-income securities. The circular provides a single-point, streamlined framework for five major debt categories:
Non-convertible Securities (NCS): These are the most common corporate bonds—straight-up loans that big companies raise from investors.
Commercial Paper (CP): Very short-term loans that companies use for their immediate needs.
Securitised Debt Instruments (SDI) & Security Receipts (SR): These are packages of loans (like housing or vehicle loans) that banks sell off to investors. This process is called securitization.
Municipal Debt Securities (Muni Bonds): These are bonds issued by city corporations (like the one in Surat or Indore) to raise money for building local infrastructure like roads, parks, and water treatment plants.
Why This Policy Change Matters?
Ease of Doing Business & Transparency: For a company that wants to raise a big loan from the market, they no longer have to hunt through dozens of circulars to figure out the process. All the rules—from what to disclose to the timeline for listing the bond—are now in one place. This makes raising money faster, cheaper, and clearer, encouraging more companies to use the bond market instead of relying solely on banks.
Financial Stability & Risk Management: The consolidation of rules for Securitised Debt Instruments makes the process of packaging and trading bank loans safer and more transparent. Policy aims to ensure that when banks sell off risk (securitization), the new owners have clear, mandatory rules (disclosures) to follow. This prevents hidden risk from building up, which is crucial for overall financial health.
Decentralizing Infrastructure Finance: By making the rules for Municipal Debt Securities simpler, SEBI is directly supporting a national economic goal: funding local infrastructure. It empowers city governments to tap into the market and raise capital independently, rather than depending on state or central government budgets, a crucial step for urban development policy.
Who Benefits?
Policy Makers (SEBI): They gain a more robust framework for regulation and clearer authority.
Borrowers (Corporates & Municipalities): They benefit from a simpler, faster, and cheaper way to raise large amounts of long-term and short-term capital.
Investors (You, Pension Funds, etc.): They benefit from enhanced disclosure and a transparent, single-window system, which increases trust and confidence in the debt market, making it a more attractive place to invest.
Follow the full update here: https://www.sebi.gov.in/legal/master-circulars/oct-2025/master-circular-for-issue-and-listing-of-non-convertible-securities-securitised-debt-instruments-security-receipts-municipal-debt-securities-and-commercial-paper_97343.html