As India looks to unlock deeper pools of long-term capital, Finance Minister Nirmala Sitharaman has called for a stronger push to develop corporate and municipal bond markets through structural reforms and broader investor participation.

Speaking at the 38th Foundation Day of the Securities and Exchange Board of India (Sebi) on Saturday, FM Sitharaman said that deepening the corporate bond market requires structural reforms across multiple dimensions, with Sebi playing a key role as a convenor and coordinator.

The finance minister stressed that building a deep and inclusive bond market, spanning both corporate and municipal segments, will be essential to mobilise long-term capital, enhance financial resilience, and support sustainable economic growth.

Highlighting the corporate bond segment, she called for continued standardisation in issuance documentation, stronger frameworks to improve secondary market liquidity, and enhanced coordination among stakeholders.

She also underscored the need to build a more effective credit enhancement architecture so that access to bond markets is not confined to top-rated issuers but can gradually extend to a wider set of fundamentally sound enterprises.

On municipal bonds, Sitharaman said India must significantly scale up this segment to meet the country’s urban infrastructure needs. “A deeper bond market must also include a strong push for municipal bonds. India’s cities are central to growth, but urban infrastructure cannot be financed sustainably through budgetary resources alone,” she said.

She urged Sebi to work closely with urban local bodies (ULBs), state governments, and the Ministry of Housing and Urban Affairs to strengthen the municipal bond framework and improve its adoption.

Sitharaman welcomed Sebi’s October 2025 consultation aimed at increasing retail participation in corporate bonds, noting that greater investor diversity will be key to long-term market development.

FM also called for a simplified, seamless, and portable know-your-customer (KYC) framework across the financial sector to improve user experience and reduce duplication.

“We must also work towards improving our citizens’ experience of financial services. We need a seamless, secure, and portable KYC experience across the financial sector. This has been discussed, as I said, with the regulators at the FSDC (Financial Stability and Development Council),” she said.

She urged Sebi to take the lead in prescribing common KYC norms and accelerating the simplification and digitalisation of KYC processes in the securities market, citing its scale of investor participation, strong digital infrastructure, and institutional credibility. “Sebi has the scale of investor participation, the depth of digital infrastructure, and the institutional credibility among peer regulators to take the lead in this domain.”

On cybersecurity, Sitharaman said that the Sebi must be prepared to tackle emerging challenges, as AI-led tools are making cyberattacks faster, more adaptive, scalable, and, in some cases, more autonomous in execution.

“A single successful cyberattack on a major exchange, depository, clearing corporation, or large broker could disrupt markets at a national scale, erase wealth, and shake public confidence in ways that take years to rebuild,” she warned.

She also directed Sebi to invest significantly in public awareness through campaigns across major platforms in regional languages, and to strengthen rapid-response mechanisms for taking down fraudulent content impersonating public officials.