FM Jaitley asks market-makers to improve their credibility, integrity

Mumbai: Finance minister Arun Jaitley on Saturday called for improving the credibility and integrity of all market participants, including the regulators and corporates, to channel more household savings into the system.

“Though we have covered a reasonable distance over the past two-and-a-half decades in terms of financial market development, there is still a long way to go in terms of market depth...

“We need to improve the credibility and integrity of our market institutions, the regulators, corporates and other market-makers to attract more retail funds into the market,” Jaitley said.

Addressing an NSDL (National Securities Depository) function here this evening, he noted that there has been considerable amount of institution-building and considerable amount of capacity-building in the past few decades in our financial markets.

“But if the economy grows at the pace we are striving it to achieve, then we need to massively improve these capacities and their credibility.”

The event was to celebrate NSDL, which is the largest depository in the country with over 89 per cent market share of the demat securities and the third largest in the world in terms of volume, crossing the value of stocks under its custody at USD 1.75 trillion or Rs 115 trillion.

The minister said, though in comparison to most other nations, our household savings at 28-29 per cent is good, going by our conservative nature of spending, we can still have a considerably high level of savings and a good portion of that can be brought into productive investments.

“But this to happen, we need to have more credible market institutions, regulators, depositories, corporates and other market-making bodies as also better quality of service from them. They also need to improve their integrity,” he added.

Stating that while most of the world is facing a gloom scenario, he said “their gloom is our boom”, though he noted that exports are a concern for the government. He also expressed concern over the rural stress following two successive years of poor monsoons, which brought down the spending power of the rural folks.

On the rising bad loans in the banking system, which crossed 13 per cent of the system in the June quarter, he said this is reflective of the stress in some key sectors of the economy like power, steel and other metals and expressed the hope that the recent measures will be fruitful.

On the reform measures of the Narendra Modi government, he said that unlike in the past today “the number of obstructionists to reforms are very few and that if we don’t initiate reform measures to attain higher growth levels it will be unfair on our future generations.”