Municipalities with surplus can issue bonds

To boost the market for municipal bonds, the Securities and Exchange Board of India (SEBI) has allowed municipalities that have a surplus on their books in any of three immediately preceding financial years to issue such securities. The move comes after SEBI’s board approved changes to the relevant regulations in February 2017 to provide a criterion alternative to the net worth of municipalities. Besides, the municipality should not have defaulted in the repayment of debt securities or loans obtained from banks or financial institutions during the past 365 days.