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Informist, Monday, Oct. 27, 2025

--Govt says municipal bonds now eligible for repo, reverse repo transactions 

MUMBAI – Municipal bonds can now be used as a security for repo and reverse repo transactions, the Department of Financial Services, Ministry of Finance, said in a notification. "...the Central Government hereby specifies the Municipal Debt Securities, having the meaning assigned to it in the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the rules or regulations made thereunder, to be as security under this section for the purposes of repo and reverse repo," it said on Friday. 

Bhavnagar Municipal Corporation is the sole issuer of municipal bonds so far this month. The municipal body plans to raise INR 250 million by issuing secured bonds maturing on Oct. 28, 2030, and has invited bids Monday, Informist reported on Friday. The coupon on the municipal bonds, payable quarterly, is yet to be decided.

Speaking at an event organised last month, SEBI Chairman Tuhin Kanta Pandey had pushed for municipal bonds as an important avenue for states to raise money, which can then be used to fund infrastructure projects. He said the importance of municipal bonds cannot be "overstated" and it can become a key pillar in financing urban infrastructure projects.  End

Reported by Kabir Sharma

Edited by Vandana Hingorani

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