RBI balancing growth with caution in evolving money and bond markets, says Dimple Bhandia

Dimple Bhandia, Chief General Manager at the Reserve Bank of India, speaking at the Morningstar Investment Conference held in Mumbai on November 4, 2025, said the central bank’s approach to financial market regulation is driven by both caution and ambition.

Bhandia stated, “These markets—the money market, the government securities market, and the foreign exchange and derivatives markets—are critical for macroeconomic stability. Our approach has always been to balance stability with the funding and risk management needs of an economy that is both aspirational and globalising.”

Reflecting on the evolution of India’s markets since the global financial crisis, Bhandia said, “The onset of that crisis changed the world’s perception of financial systems. At that time, our markets were developing, and bank-intermediated finance was the only option for many participants.” She added that while participation was once limited and foreign access was guarded, “global interest in the Indian rupee and offshore Indian markets continued to grow even as the domestic and offshore segments remained separate.”

On the progress made in recent years, Bhandia explained, “Our efforts have been to make capital raising more efficient, remove segmentation between onshore and offshore markets, promote innovation through a larger suite of products, and ensure fair conduct and market integrity.” According to her, these reforms have strengthened every segment of the financial system and improved India’s credibility in global markets.

Discussing the money market, Bhandia also said, “Overnight money market volumes have nearly doubled in the past five years—from ₹3 lakh crore in 2019 to nearly ₹5.9 lakh crore now.” She highlighted that mutual funds have become major lenders in repo markets, while non-banking financial companies and banks remain key issuers of commercial papers and certificates of deposit. However, she cautioned, secondary market trading in these instruments remains limited and largely short-term.”

Turning to the government securities market, Bhandia noted, “The outstanding stock of central government securities now stands at ₹88 lakh crore, and that of states at ₹67 lakh crore.” She said the RBI’s efforts have created a well-distributed maturity profile and an active yield curve extending up to 50 years. Bhandia said, “Our reforms—especially the Fully Accessible Route and inclusion in global bond indices—have brought in nearly $25 billion in foreign investments, demonstrating growing global confidence in India’s financial markets.”