India’s credit markets most suppressed among large economies, says Ex-SEBI member
BusinessLine 23 hrs ago·24 Sept 2026, 2:35 pm
Former SEBI member Madhabi Puri Buch has stated that India's credit market is the most suppressed among major global economies. This means interest rates on loans and bonds are significantly lower than what is typical for a country of India's size and growth potential. Consequently, the cost of borrowing is artificially cheap, which encourages businesses and individuals to take on more debt.
This cheap credit environment has diverted household savings away from fixed deposits and into equities. As a result, stock valuations have stretched higher than historical averages. While this supports domestic investment, it also makes Indian assets less attractive to foreign investors who might find better returns elsewhere. The market is currently relying heavily on domestic liquidity to sustain its momentum.
Investors should monitor the central bank's policy stance and the government's fiscal measures. If credit conditions tighten or foreign capital flows reverse, valuations could face pressure. Keeping an eye on global interest rate trends will be crucial for understanding the future trajectory of India's credit market and stock valuations.
Excerpt from BusinessLine
India’s credit markets, at 65 per cent of GDP, are the smallest among all large economies, former SEBI Whole Time Member Ananth Narayan said at the 13th SBI Banking and Economics Conclave in Mumbai, calling the country’s fixed income ecosystem “absolutely suppressed.” Narayan flagged a policy contradiction at the…Read the original at BusinessLine
Key takeaways
- Category: Corporate Action.
- AI reads the tone as negative (potentially bearish) for the stock.
- Flagged as a high-impact, market-moving story.
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