Simple products key to unleashing India's securitization potential: SEBI's Maninder Cheema
Mumbai, May 29
The true breakthrough for India's securitisation market lies in simplicity, said Maninder Cheema, Executive Director of the Department of Debt and Hybrid Securities at SEBI on Friday.
Speaking with media on the sidelines of the 14th Securitisation Summit 2026, Cheema noted that the market needs clear, easy-to-understand products to scale sustainably, arguing that establishing a direct link between an asset's revenue stream and the end investor is critical at this stage of India's economic growth.
"Monetization takes place naturally when the structure is transparent," Cheema noted, pointing to the success of municipal bonds, Real Estate Investment Trusts (REITs), and Infrastructure Investment Trusts (InvITs).
"In a way, municipal bonds are monetising the revenues within the municipality. REITs and InvITs are monetising the revenues which various real estate and infrastructure assets are earning."
Cheema said, these instruments are highly effective because the connection between the underlying revenue and the investor's return is completely straightforward.
"Those are simpler to understand products, and the connect between the revenue towards the investor is very straightforward. Those products may appeal to investors more than complex securities, and may serve the market more before there is a more active requirement for intricate securities deployment," she explained.
Addressing regulatory next steps, Cheema highlighted SEBI's upcoming framework aimed at deepening bond market participation. Following the roadmap previously laid out by the SEBI Chairperson, she confirmed a clear timeline for implementation.
"It's going to be a pilot project, and a timeline of six to nine months has already been given," Cheema stated.
She added that the initiative would build upon existing institutional precedents, noting, "The RBI has already done this on the securitization of certificates of deposit issued by some banks where there were other bank participants. It is going to be following on those lines."
To ensure the success of these fixed-income structures, Cheema underscored the immediate need to scale up retail participation in corporate bonds and non-equity asset classes.
She revealed that industry associations, market exchanges, and regulators are aggressively conducting investor awareness campaigns to bridge the literacy gap. Furthermore, structural access remains a major focal point for the regulator.
"There is also a discussion around allowing a distributor framework for corporate bonds," Cheema concluded, indicating that a formalized distribution network will be instrumental in making safe, fixed-income assets accessible to the broader public.
— ANI
Reader Comments
Good to see focus on retail participation. But we need more than awareness campaigns—teachers and small shopkeepers in tier-2 cities don't even know what a bond is. SEBI should tie up with post offices or local cooperative banks to distribute these products. Also, why does everything have to be complicated? KISS principle should apply.
As an expat living in Mumbai, I find Indian financial regulation fascinating. The push for simpler products makes sense. But I worry that with 1.4 billion people, financial literacy is still a huge hurdle. Even in the US, we had similar problems before the 2008 crisis. India should learn from our mistakes—transparency is key.
Ah, securitisation! This is what our economy needs. But we have to be careful—remember what happened in 2008? The West went overboard with complex products. If we keep it simple like Cheema madam says, we can avoid those pitfalls. Also, municipal bonds can help fix our cities. Imagine funding better roads and water supply through bonds! That's real progress.
The distributor framework for corporate bonds is long overdue. In Australia, we can buy bonds through our regular broker with a few clicks. Here I have to fill up forms that look like tax returns. But hats off to SEBI for pushing this. The pilot project timeline sounds realistic. Let's hope they execute properly.
My concern is that even simple products can be mis-sold. We've seen what happens with mutual funds when agents push high-commission schemes.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.