SBI chief calls for promoting spot trades – Times of India

MUMBAI: SBI chairman C S Setty has called for expanding the pool of listed companies and promoting spot transactions, which are essential for better price discovery since over-reliance on derivatives hampers market depth and liquidity. He also called for moving from private placement toward open offers and use technology to reduce costs.
Delivering the keynote address at a National Institute of Securities Management event on Friday, Setty called for the establishment of a dedicated market infrastructure institution to track the utilisation of funds raised by businesses through equity and debt markets.
The SBI chairman stressed the need for mechanisms to track fund utilisation to build investor trust and foster transparency. “We will require a viable mechanism to track the actual use of these funds, to ensure that the funds are utilised for the purposes they have been raised for,” he said.
“India today has all the diverse drivers in place to foster deep and well functioning capital markets,” said Setty. He emphasised their role in mobilising domestic savings, fostering long-term investments, and reducing reliance on volatile foreign capital flows.
According to Setty, Indian capital markets will need to scale up to mobilise the Rs 643 lakh crore in equity that will be required by 2036 to support economic growth, raise the investment rate to 35% of GDP, and increase domestic savings to 33.5% of GDP.
MSMEs, which account for a third of India’s GDP and 40% of exports, require focused attention, particularly in addressing credit information asymmetry. “Initiatives like SME platforms and digitalised credit assessment systems are promising, but more needs to be done to formalise and consolidate data sources to improve access to credit,” he added.
Setty also drew attention to the need for climate finance, estimating that India requires $10.1 trillion to achieve its net-zero goals by 2070, with $8.4 trillion needed for the power sector alone. He stressed the importance of institutional innovation to mobilise funds efficiently, noting that annual green financing requirements could reach 2.5% of GDP.