{"id":2418,"date":"2019-12-06T16:11:18","date_gmt":"2019-12-06T10:41:18","guid":{"rendered":"https:\/\/www.classiciasacademy.com\/blog\/?p=2418"},"modified":"2019-12-06T16:13:55","modified_gmt":"2019-12-06T10:43:55","slug":"cabinet-gave-its-nod-to-bharat-bond-etf","status":"publish","type":"post","link":"https:\/\/www.classiciasacademy.com\/blog\/cabinet-gave-its-nod-to-bharat-bond-etf\/","title":{"rendered":"Cabinet Gave Its Nod To Bharat Bond ETF"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\">In\nNews <\/h3>\n\n\n\n<p>The Union Cabinet has given its approval for the launch of <strong>Bharat\nBond &#8211; India\u2019s first exchange-traded fund (ETF). <\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">In-Detail\n<\/h3>\n\n\n\n<ul><li><strong>The government has created\nthe Bharat Bond Exchange Traded Fund (ETF) as an additional source of funding\nfor Central Public Sector Undertakings (CPSUs), Central Public Sector\nEnterprises (CPSEs), Central Public Financial Institutions (CPFIs), and other government\norganiz<\/strong><strong>ations. <\/strong><\/li><li>With the approval from the\nCabinet Committee on Economic Affairs, the <strong>Bharat Bond ETF will become the\ncountry\u2019s first corporate bond ETF. <\/strong><\/li><li>The WTF will have an assortment\nof bonds issued by CPSEs, CPFIs, CPSUs, and other government organisations. <\/li><li>All the bonds will be AAA-rated\nbonds. <\/li><li>Each unit size of the bond has\nbeen kept at Rs. 1000 to attract retail investors. <\/li><li>The maturity period for the ETF\nis fixed and initially will be issued for 3 years and 10 years. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Safe\nInvestment <\/h3>\n\n\n\n<ul><li>The bond ETF provides safety of\ninvestment, liquidity and predictable tax as the underlying bonds are of\ngovernment-owned entities and the bonds can be traded on exchange. <\/li><li>The government is of the\nopinion that the ETF will penetrate the bond market deeper as it will attract\nretail investors who are not participating in the bond market at present.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Alternate\nFunds<\/h3>\n\n\n\n<ul><li>For the issuers of bonds, the\nETF is an alternate source for their funding requirements which are now\ndependent on bank finances. <\/li><li>With the participation of\nretail investors and High Net worth individuals, the demand for the ETF will\nrise and the band issuers can get funds at reduced costs. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">ETFs<\/h3>\n\n\n\n<ul><li>An ETF is a financial\ninstrument that can be traded on exchanges similar to stocks. <\/li><li>The holding assets of an ETF\ncan be stocks, commodities or bonds. <\/li><li>Though India has Equity ETF,\nthe Bharat Bond will be the first Bond ETF of the country.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Corporate\nBond Market <\/h3>\n\n\n\n<ul><li>The corporate bond market in\nIndia is small in scale compared to big economies. <\/li><li>The corporate debt to GDP ratio\nis 17 percent in the country compared to 123% in the US and 19% in China. <\/li><li>One of the reasons for the slow\ngrowth of the corporate bond market in the country is a narrow investor base.<\/li><li>Corporate bond investors are\npredominantly institutional investors with only 3% of the investors being\nretail investors.<\/li><li>Though several initiatives have\nbeen taken to spur the corporate bond market in the country, it still plays a\nsmall role in long-term debt requirements for private players. <\/li><li>A mature corporate bond market\nwill help finance long-term projects, especially infrastructural projects in a\nfast-growing economy like India. <\/li><li>For this to happen, attracting\nretail investors is the key.<\/li><li>In this scenario, the creation\nof Bharat Bond ETF with its low unit cost has the potential to attract retail\ninvestors. <\/li><li>Hopefully, there will be a\nspurt in activity in the corporate bond market of the country. <\/li><\/ul>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\"><p>In News The Union Cabinet has given its approval for the launch of Bharat Bond &#8211; India\u2019s first exchange-traded fund (ETF). In-Detail The government has <a class=\"mh-excerpt-more\" href=\"https:\/\/www.classiciasacademy.com\/blog\/cabinet-gave-its-nod-to-bharat-bond-etf\/\" title=\"Cabinet Gave Its Nod To Bharat Bond ETF\">    [read more]<\/a><\/p>\n<\/div>","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[98],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Cabinet Gave Its Nod To Bharat Bond ETF - UPSC Current Affairs<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.classiciasacademy.com\/blog\/cabinet-gave-its-nod-to-bharat-bond-etf\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cabinet Gave Its Nod To Bharat Bond ETF - UPSC Current Affairs\" \/>\n<meta property=\"og:description\" content=\"In News The Union Cabinet has given its approval for the launch of Bharat Bond &#8211; India\u2019s first exchange-traded fund (ETF). In-Detail The government has   [read more]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.classiciasacademy.com\/blog\/cabinet-gave-its-nod-to-bharat-bond-etf\/\" \/>\n<meta property=\"og:site_name\" content=\"UPSC Current Affairs\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/classiciasacademydelhi\/\" \/>\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/classiciasacademydelhi\/\" \/>\n<meta property=\"article:published_time\" content=\"2019-12-06T10:41:18+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-12-06T10:43:55+00:00\" \/>\n<meta name=\"author\" content=\"Classic IAS Academy\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@classic_ias\" \/>\n<meta name=\"twitter:site\" content=\"@classic_ias\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Classic IAS Academy\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.classiciasacademy.com\/blog\/cabinet-gave-its-nod-to-bharat-bond-etf\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.classiciasacademy.com\/blog\/cabinet-gave-its-nod-to-bharat-bond-etf\/\"},\"author\":{\"name\":\"Classic IAS Academy\",\"@id\":\"https:\/\/www.classiciasacademy.com\/blog\/#\/schema\/person\/11f000d5c6a57c5e6f655dd75e8f6096\"},\"headline\":\"Cabinet Gave Its Nod To Bharat Bond ETF\",\"datePublished\":\"2019-12-06T10:41:18+00:00\",\"dateModified\":\"2019-12-06T10:43:55+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.classiciasacademy.com\/blog\/cabinet-gave-its-nod-to-bharat-bond-etf\/\"},\"wordCount\":471,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.classiciasacademy.com\/blog\/#organization\"},\"articleSection\":[\"News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.classiciasacademy.com\/blog\/cabinet-gave-its-nod-to-bharat-bond-etf\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.classiciasacademy.com\/blog\/cabinet-gave-its-nod-to-bharat-bond-etf\/\",\"url\":\"https:\/\/www.classiciasacademy.com\/blog\/cabinet-gave-its-nod-to-bharat-bond-etf\/\",\"name\":\"Cabinet Gave Its Nod To Bharat Bond ETF - 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