##39. 58 lakh crore 8. the number of instruments outstanding was 29, 745. the average size of an outstanding corporate bond instrument was, therefore, ₹133 crore – a small amount not conducive to development of liquidity in the secondary market. compare this with the current outstanding stock of government securities at ₹84. 71 lakh crore in 100 instruments 9. the two markets are not comparable and it is not my intention to compare them. there is a single issuer in the government securities market – the government, compared to 5, 394 issuers, as on june 30, 2022, in the corporate bond market. replicating the https : / / www. sebi. gov. in / statistics / corporate - bonds / corpbondsarchivesnew. html source : https : / / www. sebi. gov. in source : rbi experience of the government bond market in the corporate bond market is not a realistic objective. sebi has been progressively making efforts to nudge the market towards re - issuances in a bid to reduce fragmentation and improve liquidity in corporate bond markets - limiting the number of corporate bonds that could mature in any financial year. the constraint is that a corporate does not have the tools available to a government to meet the rollover risk implicit in bunched up repayment obligations that result from consolidation through reissuance. other factors that contribute to the limited activity in the secondary market are the “ buy and hold ” nature of investors and the predominance of private placement. c. development of complementary markets 15. it is well - established globally that well - functioning related markets – derivatives and repo markets - complement and supplement the development of liquidity in the cash market by enabling investors and market - makers to better manage risks and fund positions. 16. the primary risks associated with holding corporate bonds are interest rate risk and credit risk. the interest rate derivative market is reasonably liquid, particularly the overnight indexed swaps market. markets for other interest rate derivative products like swaptions are developing. recent regulatory efforts seek to harmonize on - shore and off - shore markets by, on the one hand, allowing non - residents to access the domestic market, and on the other hand, permitting domestic market makers to access the offshore market. interest rate derivatives are also trading on exchanges though volumes are small. 17. the absence of a market for credit derivatives, despite regulatory initiatives for more than a decade, is

the credit risks involved. however, there are some signs indicating that the lending attitude of financial institutions perceived by small firms is becoming slightly more cautious. meanwhile, the fund - raising conditions of firms in the markets for such instruments as corporate bonds and cp are improving further owing to the decline in market interest rates and the more active stance of investors to take credit risks. on the other hand, credit demand of private firms continues to lack momentum as the level of corporate expenditures such as business fixed investment remains below firms ’ cash flow. moreover, firms continue to reduce their debts as part of their balance - sheet restructuring measures. as a result, credit demand in the private sector has continued to be basically stagnant. in view of this, the underlying tone of private banks ’ lending remains sluggish. the growth rate of amount outstanding of corporate bonds issued is slightly below 2 percent year - on - year. the amount outstanding of cp issued is well above that of the previous year and marking the highest level to date, reflecting the favorable environment for issuing cp. the growth rate of money stock ( m2 + cds ) in may was higher than that of the previous month due mainly to the inflow from postal savings. funding costs for firms are on a declining trend reflecting developments in market interest rates. in this financial environment, the lending attitude of financial institutions and corporate financing conditions remain easy as a whole. for the time being, attention should be paid to the effects of the monetary easing measures taken by the bank, while careful monitoring is required for the effects of stock price developments and corporate profit conditions on the behavior of financial institutions and the fund - raising conditions of firms.