Aimed at developing the corporate debt market, the draft guidelines said that debt securities which have been assigned ‘AA’ or higher ratings by the credit rating agencies will be eligible for repo transactions. Under the repo transactions, the entities holding listed corporate debts would be able to sell them to other entities with an option to repurchase the security. Commercial banks, NBFCs, financial institutions, insurance firms, mutual funds, housing finance firms and RBI-approved primary dealers can do repo transactions in corporate debts.
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