India’s Expanding Economy Requires More Diverse Sources of Capital: SEBI Chairman

New Delhi, Sep 24 (KNN) India’s expanding and increasingly sophisticated economy requires a more diverse pool of financing, with banks and capital markets playing complementary roles, Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey said on Wednesday.

Addressing the 13th SBI Banking & Economics Conclave, Pandey noted that India’s financing needs span infrastructure, manufacturing, urbanisation, energy transition, micro, small and medium (MSMEs) and technology-driven businesses, requiring different forms of capital.

“India's aspirations are large. We need capital for infrastructure and manufacturing. We need it for urbanisation and energy transition. We need finance for MSMEs as well as large companies. We need capital for traditional businesses and for enterprises built around technologies that may not even have existed a decade ago,” Pandey said, as quoted by ANI.

He emphasised that banks would remain important for project assessment, credit disbursement and relationship monitoring, but specialised capital pools would increasingly be required as businesses and funding needs diversify.

“As an economy becomes larger and more sophisticated, its financing requirements also become more diverse. Some businesses need debt, others need risk capital, infrastructure may require patient long-duration capital, young businesses may need equity before they are ready for conventional debt, large and established companies may benefit from diversifying their borrowings between banks and bond markets,” Pandey noted.

Corporate Bond Market Gains Importance

India’s market capitalisation has grown at an annual compound rate of around 17 per cent since FY16 to about Rs 481 trillion, Pandey said. Domestic companies have raised an average of around Rs 10 trillion annually through equity and debt issuances over the past decade.

Mutual fund assets under management stood at around Rs 87 trillion in August 2026, while the unique investor base reached nearly 150 million.

Pandey identified the corporate bond market as an important link between banks and securities markets. Outstanding corporate bonds stood at around Rs 61 trillion in August 2026, equivalent to about 55 per cent of outstanding bank credit to industry and services.

He said regulatory reforms should improve ease of doing business without weakening investor protection, arguing that better-designed regulation can reduce unnecessary friction while maintaining market confidence.

(KNN Bureau)