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Rukmani Vishwanath

Mumbai , Oct. 18

WITH interest rates on rupee and dollar deposits having lost some of their sheen with the recent ceilings imposed by RBI, non-resident Indians are now eyeing the Indian bond market as a means to park their investible surplus.

Bankers and money market dealers are reluctant to elaborate about the nature of these investments, but admitted that there are quite some enquiries from `high net worth' individual NRIs about opening CSGL accounts with local banks.

One banker said: "NRIs are interested and we have received several mails enquiring about investment opportunities in bonds and T-bills. Unlike resident Indians, their options for investments in the country are limited."

"Another advantage of the G-sec market is its mostly zero risk unlike the equities market. It is unlikely that the average individual customers are going to swarm the bond market, as it needs a deep understanding of the Indian market scenario to be able to make sensible investments here.

But high net worth customers can afford to do so as they may be having the requisite contingencies in place,'' he added.

It is understood that some of these NRIs have local advisors to monitor their investments. Some banks also provide them with advisory services, as they might not be able to keep tabs on the market on a day-to-day basis.

Some market players confided that there was an apprehension that resident Indians might be routing money through the NRIs into the market, as the domestic bond market is booming.

The newfound NRI interest notwithstanding, the retailing of g-secs for most banks and PDs has still not taken off. The Reserve Bank of India is understood to have recently convened a meeting with top bankers to discuss the retailing of G-secs, and some measures in this area are expected in the Monetary and Credit Policy, aimed at giving a boost to retail participation in the debt market.

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