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The Swap that does it all: RBI introduces total return swaps on corporate bonds

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– Dayita Kanodia & Siddharth Pandey | finserv@vinodkothari.com

Budget 2026 proposed to introduce Total Return Swaps (TRS) for corporate bonds, purportedly as a measure for synthetic trading in corporate bonds. However, given the very slow pick up of credit default swaps, the much easier and globally prevalent version of credit derivatives, will the more esoteric TRS really make a difference? We explain what TRS is, how it differs from a CDS, give a sense of the global data on TRS as a part of OTC credit derivatives, and discuss how much the new measure will impact India’s bond market.

On February 6, RBI, in furtherance of the announcement in the Statement on Developmental and Regulatory Policies dated February 6, 2026, issued the draft revised Master Direction – RBI (Credit Derivatives) Directions, 2022. (‘Draft CD Directions’). The Draft CD Directions permit TRS to be issued to eligible persons.

Background

India’s credit derivatives market has historically remained shallow, with hardly any transanctions involving credit default swaps. This has resulted in limited hedging options focused only on default risk and an absence of tools for transferring market and price risk.

This contrasts sharply with global trends. As of mid-2025, the notional outstanding volume of OTC derivatives exceeded USD 840 trillion, with credit derivatives, despite being smaller in absolute size than interest rate or FX derivatives, recording the fastest year-on-year growth at approximately 23%.

It may be noted that as of 1996, which is when credit derivatives had almost started emerging and gaining strength, TRS transactions were significant and took up almost 32% of the market share. However, the percentage of TRS dropped. Over time, CDSs overtook the position because CDSs are more definitive and limit the risks of the protection seller. In 2025, as per 118th edition of the OCC’s Quarterly Report on Bank Trading and Derivatives Activities based on call report information provided by all insured U.S. commercial banks and others, the TRSs had become a smaller segment representing 4.9 per cent of the credit derivative market.

Meaning of TRS

In simple terms, a TRS swap transfers the entire volatility of returns of a reference asset from one party to another. TRS is a kind of derivative contract wherein the protection buyer agrees to transfer, periodically and throughout the term of the contract, the actual returns from a reference asset to the protection seller (“floating returns”), and the latter, in return, agrees to transfer returns calculated at a certain spread over a base rate (“fixed returns”) Total returns include the coupons, appreciation, and depreciation in the price of the reference bond. On the other hand, the protection seller will pay a certain base rate, say, risk free rate, plus a certain spread. The protection seller in the case of a TROR swap is also referred to as the total return receiver, and the protection buyer is similarly called the total return payer. The figure below illustrates the essential mechanics of a total return swap.

Impact of TRS
TRS swaps originate from synthetic equity structures, where economic returns of an asset are transferred without any actual investment in the underlying. The structure separates economic exposure from legal ownership. In a TROR swap, the economic impact is such that the total return receiver assumes the position of a synthetic lender to or investor  in the bonds  of the reference obligor, while the total return payer becomes a synthetic lender to the counterparty. Consider the illustration below:

  • Party PB invests in the unsecured bonds of entity X carrying a fixed coupon of 9.5 per cent. 
  • PB then enters into a TROR swap with PS, under which PB agrees to transfer the actual returns from the bonds of X and, in return, receive MIBOR plus 100 basis points.
  • Under the terms of the swap, PB periodically transfers the coupon income, plus any market price appreciation minus any market price r depreciation in the bonds, while PS periodically pays MIBOR plus 100 basis points. 
  • Although PB technically holds the bonds of X, in substance PB has neither exposure to X nor to the returns generated by X. Instead, PB is economically exposed to PS at MIBOR plus 100 basis points, which is equivalent to having invested in PS at that rate.
  • Conversely, PS, despite not holding the bonds of X, is economically exposed to the actual returns from X’s bonds (net of MIBOR plus 100 basis points). The effect of the TROR swap is therefore to synthetically create a fully refinanced investment in the bonds of X, giving a return equal to the actual returns in the bonds, and having a funding cost equal to MIBOR plus 100 basis points.

Thus, the true impact of a TROR swap is the synthetic replacement of exposures. Consequently, the advantages of a TRS can be:

  • Off-balance sheet exposure: TRS creates synthetic assets without recording loans or bonds on balance sheets improving leverage ratios and capital efficiency.
  • Regulatory Arbitrage: TRS has been used to bypass investment or lending restrictions, such as exposure norms, concentration limits, etc.
  • Provides very high leverage: In the above illustration, the synthetic investment made by the O in the bond is highly leveraged, assuming no margin has been put by the PS.
  • Alternative to a Repo: Assume PB holds a bond and is looking at having it funded. It sells the bond to Q and simultaneously enters into a TRS transaction, paying MIBOR + spread and receiving the actual returns of the bond. Hence, PB continues to have an economic stake in the bond whereas for accounting purposes, the bond may be removed from the balance sheet of PB.

TRS structures have been used globally across a wide range of asset classes, including equities, bonds, loans, real estate and property interests, credit-linked notes, and portfolios or indices of such assets. Hence, a TRS is a credit derivative only when the reference asset is a credit asset, otherwise it is a generic total return derivative. The Draft CD Direction framework deliberately confines TRS usage to specified debt instruments in order to prevent synthetic funding and balance-sheet arbitrage.

CDS Vs TRS

AspectsCDSTRS
Basic DefinitionA credit derivative contract where a protection seller commits to pay the buyer in the event of a credit event.A credit derivative contract where a payer transfers the entire economic performance of an asset to a receiver (protection seller).
Risk TransferredTransfers only the credit risk associated with a specific obligation. 
The protection seller is only concerned with the risk of default or increase in credit spreads of the asset. That is, the reference transaction only shifts the risk of credit spreads		Transfers the total volatility of returns, including credit risk, interest rate risk, and market risk. 
The receiver gains exposure to all gains and losses (coupons, appreciation, and depreciation).
Cash Flow MechanicsThe buyer makes periodic premium payments to the seller until maturity or a credit eventInvolves a periodic exchange of cash flow, the payer gives returns and appreciation; the receiver gives a benchmark rate + spread and depreciation.

No fixed premium; the premium  is inherent in the difference between actual returns and the agreed-upon spread
Synthetic ImpactUsed primarily for credit insurance or hedging against specific default.Used to synthetically replace the entire exposure of the parties, causing the receiver to assume the position of a synthetic lender to the reference obligation.

Types of TRS

Total Return Swaps can be categorized into several types based on their underlying assets and funding structures:

  • Index-Based TRS: Instead of a specific bond, the returns are linked to a diversified index (e.g., a broad-based index of 100 high-yield corporate bonds). The RBI specifically allows these if the index is composed of eligible debt instruments and published by an authorized administrator.
  • Equity Swaps: A type of TRS where the reference asset is one or more equity securities. Here, the total return payer pays the return from the equity or the portfolio, and in turn, receives a base rate spread.
  • Property Derivatives: The TRS methodology has been applied to swapping the returns of property investments also, allowing investors to synthetically invest in properties or property indices. 
  • Structured TRS:  Here, the reference assets would be a pool of loans or bonds. The transaction will make uses of the credit-linked notes.

See further details on TRS in the book on Credit Derivatives and Structured Credit Trading by Mr Vinod Kothari

Regulatory framework for TRS

The Draft CD Directions permit the use of TRS while adding multiple safeguards to ensure that TRS functions strictly as a credit risk transfer instrument and not as a means of synthetic funding, balance-sheet arbitrage, or regulatory circumvention. The regulatory framework governs four key aspects:

  • Eligible participants,
  • Permissible reference assets,
  • Permitted purposes for which these instruments may be used, and
  • Prudential safeguards.

Eligible participants for TRS

Para 4.1.2(iii) of the revised Directions stipulates that at least one counterparty to every credit derivative transaction must be a market-maker. For this purpose, market-makers are defined to include 

  • Scheduled Commercial Banks, 
  • Large NBFCs (including HFCs and SPDs) with a minimum net owned fund of ₹500 crore, and
  • Specified financial institutions such as NABARD, SIDBI, and EXIM Bank.

This requirement ensures that TRS transactions are intermediated by regulated entities with adequate risk management capabilities.

In alignment with this overarching requirement, the Draft CD Directions prescribe the following specific eligibility conditions for TRS:

  • TRS may be offered only by market-makers, ensuring that such transactions are undertaken by regulated entities with adequate risk management capabilities.
  • Residents (other than individuals) may enter into TRS without any restriction on the purpose, allowing both hedging and non-hedging purposes.
  • Persons resident outside India may enter into TRS only for the purpose of hedging, and such TRS may be offered to them exclusively by market-makers.

Reference entities and reference assets for TRS

In addition to prescribing eligible participants, the Draft CD Directions impose strict controls on the nature of reference entities and assets that may be used for TRS transactions. These controls are intended to ensure transparency, prevent regulatory arbitrage, and avoid the creation of complex or opaque synthetic exposures.

Reference entity: 

A reference entity refers to the issuer whose credit risk and economic performance form the basis of the TRS contract. For TRS, the reference entity shall be a indian resident entity that is eligible to issue Reference assets under the Draft CD Directions.

By limiting reference entities to domestic issuers of eligible debt instruments, the framework ensures that TRS activity remains in the Indian corporate debt market, which was also the regulatory intent.

Reference assets: 

A reference asset refers to the underlying corporate bond or debt instrument issued by the reference entity or an index of underlying debt instruments specified in a total return swap contract. The Draft CD Directions specify the following as eligible reference assets for TRS:

  • Money market debt instruments;
  • Rated INR-denominated corporate bonds and debentures;
  • Unrated INR-denominated corporate bonds and debentures issued by Special Purpose Vehicles (SPVs) set up by infrastructure companies; and
  • Bonds with call and/or put options.

At the same time, the Directions expressly prohibit TRS on certain instruments, including asset-backed securities, mortgage-backed securities, credit-enhanced or guaranteed bonds, convertible bonds, and other hybrid or structured obligations. This exclusion reflects regulatory caution against layering derivatives on complex or credit-enhanced products that could obscure risk transfer.

Index-based reference assets

The Draft CD Directions also permit a TRS to reference an index, provided that:

  • The index comprises only eligible debt instruments as specified above; and
  • The index is published by a financial benchmark administrator duly authorised by the RBI under the Reserve Bank of India (Financial Benchmark Administrators) Directions, 2023

Although such index based reference asset has been introduced for CDS and TRS, no such index for debt securities exists currently. Accordingly, such an index must be developed. 

Preventing Regulatory circumvention:

Para 4.5.1(ii) of the Draft CD Directions expressly provides that market participants shall not undertake credit derivative transactions, including Total Return Swaps, involving reference entities, reference obligations, or reference assets where such transactions would result in exposures that the participant is not permitted to assume in the cash market, or where they would otherwise violate applicable regulatory restrictions. This provision prevents the use of TRS to bypass exposure limits, concentration norms, sectoral caps, or investment restrictions applicable to the participants.

Additional safeguards for TRS used for hedging

Where a TRS is entered into for the purpose of hedging, the market-maker is required to ensure that the user satisfies the following conditions:

  • The user has an existing exposure to the relevant reference asset
  • The notional amount of the TRS does not exceed the face value of the reference asset held by the user, and
  • The tenor of the TRS does not extend beyond:
    • The maturity of the reference asset held by the user, or
    • The standard TRS maturity date is immediately following the maturity of the reference asset.

These safeguards reinforce the principle that hedging-oriented TRS must remain strictly co-terminous and proportionate to the underlying exposure, thereby avoiding over-hedging or speculations. Further, the Draft CD Direction specify that the settlement rules and standard documentation will be specified by shall be specified by the Fixed Income Money Market and Derivatives Association of India (FIMMDA), in consultation with market participants. However, the market participants are allowed to, alternatively, use a standard master agreement for credit derivative contracts.

Will it impact the bond markets in India?

Will this new instrument have an impact on bond markets in India? The first instance of guidelines on credit derivatives was issued in 2011; this failed to have any impact at all. Then, after the report of the Working Group, new Credit Derivatives Directions were issued in 2022. These also, at least based on anecdotal market information, have not had any significant traction at all.

CDS is much more standardised than TRS; as we have noted above, TRS is only 4.9% of the global credit derivatives market. Will the Indian market, which has not yet picked up credit spread trading in the form of CDS, delve into a far more esoteric TRS trade? Was it based on any reasoned or surveyed market feedback that this regulatory change was inspired? These questions, a priori, are difficult to answer. However, like a new flavour of ice cream, you never know until you try it.

Other Resources:

  1. Draft Credit Derivatives directions: Will they start a market stuck for 8 years?
  2. Page on Credit Derivatives
  3. Book on Credit Derivatives and Structured Credit Trading

Strengthening India’s Corporate Bond Market: A Look at NITI Aayog’s Recommendations

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Simrat Singh | finserv@vinodkothari.com

India’s aspiration to become a US $30 Trillion economy by 2047 rests on its ability to mobilise long-term, stable and affordable capital. Debt capital can be an attractive source for this. While banks have historically been the backbone of credit intermediation in India, a bank-dominated financial system may be inadequate to meet the financing needs of a developing country like India which includes long-gestation exposures to infrastructure, climate transition, manufacturing and other emerging sectors. Recognising this constraint, NITI Aayog’s report on Deepening the Corporate Bond Market in India (‘Report’) lays out reforms to develop corporate bonds as another major tool for mobilising long-term low-cost capital. 

In this note we highlight some of the reforms being advocated in the Report.

Key Thrust Areas of Reforms:

Regulatory Efficiency 

A central theme of the Report is the need to reduce regulatory friction arising from fragmented and overlapping oversight by SEBI, RBI and the MCA for corporate bonds. Inconsistent treatment of similar bonds, procedural complexity, overlapping disclosures and different approval timelines are identified as major constraints, particularly for public issuances and lower-rated issuers. A specific concern highlighted is issuer-based regulation: bonds issued by banks and NBFCs are regulated by the RBI, while similar bonds issued by non-financial corporates fall under SEBI and MCA oversight. This results in different disclosure standards and compliance processes for similar bonds

To combat this, first, the Report calls for stronger inter-regulatory coordination and recommends measures such as mutual recognition of disclosures, a joint regulatory help desk/single point of contact as well as joint circulars detailing the jurisdictions of each regulator – essentially a centralised coordination mechanism involving SEBI, RBI, MCA and the Ministry of Finance.

Second, the Report emphasises the need to rationalise disclosure norms for public bond issuances, which are significantly more onerous than those applicable to private placements. This asymmetry has led to an overwhelming reliance on private placements, which account for nearly 98% of corporate bond issuances in India (p. 25). Drawing on global practices, the Report recommends a differentiated disclosure regime for well-compliant issuers (p. 66). Specific reforms include extending the validity of offer documents from one year to two or three years, removing ISIN-wise issuance constraints, simplifying PAS-2 and Information Memorandum filings through digital automation on the MCA portal, and introducing a “Well-Known Seasoned Issuer” framework to enable fast-track access to public bond markets for reputed issuers.

Third, the Report stresses the need for regulatory clarity for hybrid instruments, including covered bonds1, securitised debt and infrastructure-linked securities. Many instruments used globally to fund long-term assets do not fit neatly within India’s regulator-specific silos. Jurisdictional ambiguity (which regulator oversees which instrument?) and the absence of standardised regulatory treatment have impeded market development. The Report recommends clearly defined frameworks to facilitate market clarity. In this context, it also highlights tax distortions; for instance, SDIs2 currently attract significantly higher TDS than corporate bonds. The Report states that SDIs are taxed at a higher rate than corporate bonds which prevents securitisation of bonds. However, effective 1.04.2025, SDI TDS rates are aligned with bond rate; both at 10% (See section 194LBC of Tax Act).

Market Infrastructure and Liquidity

Bonds are heterogeneous instruments, varying by type of issuer, tenor, covenants and structure. Unlike equities, electronic order matching alone cannot ensure immediacy of execution or continuous liquidity in the secondary market, particularly in lower-rated or infrequently traded bonds. Despite progress through electronic platforms such as RFQ for secondary trading and EBP for primary issuance, trading volumes remain shallow and concentrated in highly rated bonds.

The Report recommends expanding electronic trading, enhancing post-trade reporting (to improve price discovery) and increasing the proportion of trades settled on a Delivery-versus-Payment (DVP) basis3. Absence of a robust market-making ecosystem is seen as a major constraint on secondary-market liquidity (pp. 22, 36, 106). Limited risk appetite and balance-sheet constraints deter intermediaries from providing continuous two-way quotes, especially in lower-rated and longer-tenor bonds.

To address this, the Report recommends enabling market-making through regulatory incentives and improved access to repo markets. In particular, the creation of a standing repo facility by RBI for high rated corporate bonds would allow market makers4 to monetise inventories efficiently and support continuous liquidity provision. While corporate bonds are included in the RBI’s list of repo-eligible instruments, their treatment differs materially from Government securities (G-Secs). Repos in G-Secs are exempt from CRR and SLR computation which means Banks can access funds through G-Sec repos without providing SLR and CRR on those funds. In contrast, cash raised through repos backed by corporate bonds is treated as a liability for CRR and SLR purposes, hence banks have to provide CRR and SLR on the resulting liquidity. Also, unlike G-Secs, which are centrally cleared and settled through CCIL, corporate bond repos lack a single, standardised clearing and settlement mechanism; they are cleared through F-TRAC and stock exchanges. The result is that the volume of corporate bond repo is negligible (exact data on corporate bond repo could not be sourced).

The Report also flags structural weaknesses in the credit rating ecosystem, including rating inflation, conflicts of interest under the issuer-pays model, and excessive regulatory reliance on ratings (p. 71). Strengthening governance standards is the key recommendation for credit ratings. To improve credit rating access for smaller issuers, the Report suggests exploring alternative credit assessment models, including technology-driven frameworks using GST-returns and other turnover based data and digital transaction histories.

Further, the Report recommends strengthening the existing framework requiring large corporates to raise a portion of incremental borrowings through debt securities (LCB Framework)5. Proposed enhancements include increasing the minimum market borrowing requirement and progressively extending the framework to smaller corporates with lower thresholds.

Drawing on the IMF’s FSAP 2025, the Report also recommends allowing high-quality corporate bonds to be used as collateral in RBI’s repo operations. International experience from the ECB, Bank of Japan, and Reserve Bank of Australia suggests that such measures can enhance secondary-market liquidity and broaden the investor base, subject to appropriate safeguards.

Equally important is the creation of a government-backed, centralised corporate bond data repository. Fragmented data across regulators and exchanges currently hampers price discovery and covenant monitoring. A unified, real-time repository is recommended to improve transparency for issuers, investors, and regulators.

Innovation in Instruments and Market design

The Report makes it clear that regulatory reforms alone are insufficient; product and market innovation are essential to expand depth and distribute risk. India’s bond market remains narrow not only due to investor risk aversion but also due to the limited availability of instruments aligned with diverse risk–return preferences and long-gestation financing needs. Green bonds, sustainability-linked bonds6, and transition bonds are identified as important instruments for financing climate action and infrastructure. However, the absence of a standardised green taxonomy and concerns around greenwashing have constrained growth. The Report, therefore, recommends establishing clear definitions, disclosure standards and verification frameworks to ensure credibility and scale ESG-oriented bond markets.

The Report proposes institutionalising a dedicated class of Corporate Bond Dealers (CBDs), modelled on the U.S. primary dealer system. Eligible banks, NBFCs and other financial institutions would be required to provide continuous two-way quotes, supported by incentives such as capital relief on bond inventories and access to RBI refinance and repo facilities. Enhanced market surveillance, real-time trade reporting, price dissemination and inventory disclosures are also recommended.

Investor and Issuer Participation

Broadening the investor base is identified as another critical reform pillar. Long-term institutional investors such as insurance companies, pension funds and provident funds are natural holders of long-duration bonds, yet regulatory investment norms constrain exposure only to higher-rated securities. The Report recommends a calibrated relaxation of these norms.

For retail investors, the Report proposes lowering minimum investment thresholds (from existing ₹ 10,000), increasing retail quotas in public bond issuances, particularly for tax-free and ESG-linked bonds7, and simplifying TDS provisions to address tax inefficiencies in secondary market trades. OBPPs have been acknowledged to contribute to secondary market liquidity, however, the volumes are low. Further, there is no mention of concerns w.r.t downselling through OBPPs which was recently highlighted by SEBI8

On the issuer side, India’s corporate bond market remains heavily concentrated among AAA and AA-rated entities. To address this imbalance, the Report advocates scaling up credit enhancement mechanisms such as PCEs and support from development finance institutions. It also highlights the need to promote longer-tenor issuances, especially for infrastructure and climate-linked projects, where asset lives significantly exceed typical corporate bond maturities. In this context, it is noteworthy that NITI Aayog has cited our resource, “Partial Credit Enhancement: A Catalyst for Boosting Infrastructure Bond Issuances?”, in the Report while discussing the role of partial credit enhancement mechanisms in deepening the corporate bond market (pp. 75 and 99). Further, regulatory subsidies for first-time or low-volume issuers and pooled issuance platforms to facilitate market access for smaller issuers is also recommended (pp. 65, 75).

The Report recognizes that CDS are underdeveloped. Currently, CDS can be purchased only by investors who already own the underlying bond, which prevents trading in the CDS market. Further, only single-name CDS are permitted, which means a separate CDS contract is required for each issuer, unlike global markets such as the U.S., where index CDS allows one CDS to cover a basket of bonds. Lastly, there is a limit on FPI investors providing CDS which is 5% of the outstanding corporate bond market. These restrictions have resulted in limited CDS protection. The Report also recommends bigger NBFCs to act as CDS market makers

Conclusion

NITI Aayog’s recommendations envisage a corporate bond market that evolves from a supplementary funding channel into a core pillar of India’s financial system. If implemented in a coordinated manner, these reforms could expand the market to ₹100–120 trillion by 2030, improve financial stability, and channel long-term capital into productive investment. The real challenge, however, lies in execution, particularly in achieving sustained regulatory coordination and market-making capacity. Addressing these constraints will be critical if corporate bonds are to play a meaningful role in financing India’s long-term growth and infrastructure ambitions under the vision of Viksit Bharat by 2047.

See our other resources on bonds

  1. Bond Credit Enhancement Framework: Competitive, rational, reasonable
  2. Demystifying Structured Debt Securities: Beyond Plain Vanilla Bonds
  3. Bond market needs a friend, not parent
  4. SEBI Securitisation Regulations: Track Record, Risk retention and Investment size among several new requirements
  5. Mandatory listing for further bond issues
  6. NHB’s PCE Scheme for HFCs
  7. Corporate Bonds and Debentures
  1. Covered bonds are secured debt instruments backed by a segregated pool of high-quality assets, offering investors dual recourse to both the issuer and the underlying assets. May refer to our resource on covered bonds. ↩︎
  2. May refer to our book Listing Regulations on Securitised Debt Instruments and Security Receipts ↩︎
  3. DVP is a settlement mechanism in which the transfer of securities and funds occurs simultaneously, eliminating counterparty and settlement risk
    ↩︎
  4.  May refer to our resource ‘Bond issuers set to become Market Maker to enhance liquidity’ ↩︎
  5. May refer to our resource ‘Mandatory bond issuance by Large Corporates: FAQs on revised framework’ ↩︎
  6. May refer to our resources ‘Sustainability or ESG Bonds’ and ‘From Rooftops to Ratings: India’s Green Securitisation Debut’ ↩︎
  7. May refer to our resource ESG Debt Securities: Framework for Issuance and Listing in India ↩︎
  8. May refer to our resource “Downstreamed through intermediaries: Deemed public issue concerns for privately placed debt” ↩︎

Bond Credit Enhancement Framework: Competitive, rational, reasonable

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The RBI’s framework for partial credit enhancement for bonds has significant improvements over the last 2015 version

The RBI has released a new comprehensive framework for non-fund based support, including guarantees, co-acceptances, as well as partial credit enhancement (PCE) for bonds. The guidelines with respect to non-fund based facilities other than PCE are not applicable on NBFCs. The PCE framework has been significantly revamped, over its earlier 2015 version.

Note that PCE for corporate bonds was mentioned in the FM’s Budget 20251, specifically indicating the setting up of a PCE facility under the National Bank for Financing of Infrastructural Development (NaBFID).nd 

The highlights of the new PCE framework are:

What is PCE?

Partial Credit Enhancement (PCE) is a risk-mitigating financial tool where a third party provides limited financial backing to improve the creditworthiness of a debt instrument. Provision of wrap or credit support for bonds is quite a common practice globally. 

PCE is a contingent liquidity facility – it allows the bond issuer to draw upon the PCE provider to service the bond. For example, if a coupon payment of a bond is due and the issuer has difficulty in servicing the same, the issuer may tap the PCE facility and do the servicing. The amount so tapped becomes the liability of the issuer to the PCE provider, of course, subordinated to the bondholders. In this sense, the PCE facility is a contingent line of credit. 

A situation of inability may arise at the time of eventual redemption of the bonds too – at that stage as well, the issuer may draw upon the PCE facility. 

Since the credit support is partial and not total, the maximum claim of the bond issuer against the PCE provider is limited to the extent of guarantee – if there is a 20% guarantee, only 20% of the bond size may be drawn by the issuer. If the facility is revolving in nature, this 20% may refer to the maximum amount tapped at any point of time.

Given that bond defaults are quite often triggered by timing and not the eventual failure of the bond issuer, a PCE facility provides a great avenue for avoiding default and consequential downgrade.  PCE provides a liquidity window, allowing the issuer to arrange liquidity in the meantime. 

Who can be the guarantee provider?

PCE under the earlier framework could have been given by banks. The ambit of guarantee providers has been expanded to include SCBs, AIFIs, NBFCs in Top, Upper and Middle Layers and HFCs. 

As may be known, entities such as NABFID have been tasked with promoting bond markets by giving credit support. 

Who may be the bond issuers?

The PCE can be extended against bonds issued by corporates /special purpose vehicles (SPVs) for funding all types of projects and to bonds issued by Non-deposit taking NBFCs with asset size of ₹1,000 crore and above registered with RBI (including HFCs).

What are the key features of the bonds?

  1. REs may offer PCE only in respect of bonds whose pre-enhanced rating is “BBB minus” or better.
  2. REs shall not invest in corporate bonds which are credit enhanced by other REs. They may, however, provide other need based credit facilities (funded and/ or non-funded) to the corporate/ SPV. 
  3. To be eligible for PCE, corporate bonds shall be rated by a minimum of two external credit rating agencies at all times.
  4. Further, additional conditions for providing PCE to bonds issued by NBFCs and HFCs:
    1. The tenor of the bond issued by NBFCs/ HFCs for which PCE is provided shall not be less than three years. 
    2. The proceeds from the bonds backed by PCE from REs shall only be utilized for refinancing the existing debt of the NBFCs/ HFCs. Further, REs shall introduce appropriate mechanisms to monitor and ensure that the end-use condition is met. 

What will be the form of PCE? 

PCE shall be provided in the form of an irrevocable contingent line of credit (LOC) which will be drawn in case of shortfall in cash flows for servicing the bonds and thereby may improve the credit rating of the bond issue. The contingent facility may, at the discretion of the PCE providing RE, be made available as a revolving facility. Further, PCE cannot be provided by way of guarantee. 

What is the difference between a guarantee and an LOC? If a guarantor is called upon to make payments for a beneficiary, the guarantor steps into the shoes of the creditor, and has the same claim against the beneficiary as the original creditor. For example, if a guarantor makes a payment for a bond issuer’s obligations, the guarantor will have the same rights as the bondholders (security, priority, etc). On the contrary, the LOC is simply a line of liquidity, and explicitly, the claims of the LOC provider are subordinated to the claims of the bondholders.

If the bond partly amortises, is the amount of the PCE proportionately reduced? This should not be so. In fact, the PCE facility continues till the amortisation of the bonds in full. It is quite natural to expect that the defaults by a bond issuer may be back-heavy. For example, if there is a 20% PCE, it may have to be used for making the last tranche of redemption of the bonds. Therefore, the liability of the PCE provider will come down only when the outstanding obligation of the bond issuer comes to less than the size of the PCE.

Any limits or restrictions on the quantum of PCE by a single RE?

The previous PCE framework restricted a single entity to providing only 20% of the total 50% PCE limit for a bond issuance. The sub-limit of 20% has now been removed, enabling single entity to provide upto 50% PCE support. 

Further, the exposure of an RE by way of PCEs to bonds issued by an NBFC/ HFC shall be restricted to one percent of capital funds of the RE, within the extant single/ group borrower exposure limits.

Who can invest in credit-enhanced bonds?

Under the earlier framework, only the entities providing PCE were restricted from investing in the bonds they had credit-enhanced. However, the new Directions expand this restriction by prohibiting all REs from investing in bonds that have been credit-enhanced through a PCE, regardless of whether they are the PCE provider. The new regulations state that the same is with an intent to promote REs enabling wider investor participation.

This is, in fact, a major point that may need the attention of the regulator. A universal bar on all REs from investing in bonds which are wrapped by a PCE is neither desirable, nor optimal. Most bond placements are done by REs, and REs may have to warehouse the bonds. In addition, the treasuries of many REs make opportunistic investments in bonds.

Take, for instance, bonds credit enhanced by NABFID. The whole purpose of NABFID is to permit bonds to be issued by infrastructure sector entities, by which banks who may have extended funding will get an exit. But the treasuries of the very same banks may want to invest in the bonds, once the bonds have the backing of NABFID support. There is no reason why, for the sake of wider participation, investment by regulated entities should be barred. This is particularly at the present stage of India’s bond markets, where the markets are not liquid and mature enough to attract retail participation. 

What is the impact on capital computation?

Under the new Directions the capital is required to be maintained by the REs providing PCE based on the PCE amount based on applicable risk weight to the pre-enhanced rating of the bond. Under the earlier framework, the capital was computed so as to be equal to the difference between the capital required on bond before credit enhancement and the capital required on bond after credit enhancement. That is, the earlier framework ensured that the PCE does not result into a capital release on a system-wide basis. This was not a logical provision, and we at VKC have made this point on various occasions2. 

  1.  Union Budget 2025: Key Highlights and Reforms focusing on Financial Sector Entities ↩︎
  2.  Partial Credit Enhancement: A Catalyst for Boosting Infrastructure Bond Issuances? ↩︎

Bond Credit Enhancement Framework: Competitive, rational, reasonable

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-Vinod Kothari (vinod@vinodkothari.com)

The RBI’s proposed framework for partial credit enhancement for bonds has significant improvements over the last 2015 version

The RBI released the draft of a new comprehensive framework for non-fund based support, including guarantees, co-acceptances, as well as partial credit enhancement (PCE) for bonds. The PCE framework is proposed to be significantly revamped, over its earlier 2015 version.

Note that PCE for corporate bonds was mentioned in the FM’s Budget 20251, specifically indicating the setting up of a PCE facility under the National Bank for Financing of Infrastructural Development (NaBFID).

A quick snapshot of how PCE works and who all can benefit is illustrated below:

The highlights of the changes under the new PCE framework are:

What is PCE?

Partial Credit Enhancement (PCE) is a risk-mitigating financial tool where a third party provides limited financial backing to improve the creditworthiness of a debt instrument. Provision of wrap or credit support for bonds is quite a common practice globally. 

PCE is a contingent liquidity facility – it allows the bond issuer to draw upon the PCE provider to service the bond. For example, if a coupon payment of a bond is due and the issuer has difficulty in servicing the same, the issuer may tap the PCE facility and do the servicing. The amount so tapped becomes the liability of the issuer to the PCE provider, of course, subordinated to the bondholders. In this sense, the PCE facility is a contingent line of credit. 

A situation of inability may arise at the time of eventual redemption of the bonds too – at that stage as well, the issuer may draw upon the PCE facility. 

Since the credit support is partial and not total, the maximum claim of the bond issuer against the PCE provider is limited to the extent of guarantee – if there is a 20% guarantee, only 20% of the bond size may be drawn by the issuer. If the facility is revolving in nature, this 20% may refer to the maximum amount tapped at any point of time.

Given that bond defaults are quite often triggered by timing and not the eventual failure of the bond issuer, a PCE facility provides a great avenue for avoiding default and consequential downgrade.  PCE provides a liquidity window, allowing the issuer to arrange liquidity in the meantime. 

Who can be the guarantee provider?

PCE under the earlier framework could have been given by banks. The ambit of guarantee providers has been expanded to include SCBs, AIFIs, NBFCs in Top, Upper and Middle Layers and HFCs. However, in case of NBFCs and HFCs, there are additional conditions as well as limit restrictions. 

As may be known, entities such as NABFID have been tasked with promoting bond markets by giving credit support. 

Who may be the bond issuers?

The PCE can be extended against bonds issued by corporates /special purpose vehicles (SPVs) for funding all types of projects and to bonds issued by Non-deposit taking NBFCs with asset size of ₹1,000 crore and above registered with RBI (including HFCs).

What are the key features of the bonds?

  1. REs may offer PCE only in respect of bonds whose pre-enhanced rating is “BBB minus” or better.
  2. REs shall not invest in corporate bonds which are credit enhanced by other REs. They may, however, provide other need based credit facilities (funded and/ or non-funded) to the corporate/ SPV. 
  3. To be eligible for PCE, corporate bonds shall be rated by a minimum of two external credit rating agencies at all times.
  4. Further, additional conditions for providing PCE to bonds issued by NBFCs and HFCs:
    1. The tenor of the bond issued by NBFCs/ HFCs for which PCE is provided shall not be less than three years. 
    2. The proceeds from the bonds backed by PCE from REs shall only be utilized for refinancing the existing debt of the NBFCs/ HFCs. Further, REs shall introduce appropriate mechanisms to monitor and ensure that the end-use condition is met. 

What will be the form of PCE? 

PCE shall be provided in the form of an irrevocable contingent line of credit (LOC) which will be drawn in case of shortfall in cash flows for servicing the bonds and thereby may improve the credit rating of the bond issue. The contingent facility may, at the discretion of the PCE providing RE, be made available as a revolving facility. Further, PCE cannot be provided by way of guarantee. 

What is the difference between a guarantee and an LOC? If a guarantor is called upon to make payments for a beneficiary, the guarantor steps into the shoes of the creditor, and has the same claim against the beneficiary as the original creditor. For example, if a guarantor makes a payment for a bond issuer’s obligations, the guarantor will have the same rights as the bondholders (security, priority, etc). On the contrary, the LOC is simply a line of liquidity, and explicitly, the claims of the LOC provider are subordinated to the claims of the bondholders.

If the bond partly amortises, is the amount of the PCE proportionately reduced? This should not be so. In fact, the PCE facility continues till the amortisation of the bonds in full. It is quite natural to expect that the defaults by a bond issuer may be back-heavy. For example, if there is a 20% PCE, it may have to be used for making the last tranche of redemption of the bonds. Therefore, the liability of the PCE provider will come down only when the outstanding obligation of the bond issuer comes to less than the size of the PCE.

Any limits or restrictions on the quantum of PCE by a single RE?

The existing PCE framework restricts a single entity to providing only 20% of the total 50% PCE limit for a bond issuance. It is now proposed that the sub-limit of 20% be removed, enabling single entity to provide upto 50% PCE support. 

Further, the exposure of an RE by way of PCEs to bonds issued by an NBFC/ HFC shall be restricted to one percent of capital funds of the RE, within the extant single/ group borrower exposure limits.

Who can invest in credit-enhanced bonds?

Under the existing framework, only the entities providing PCE were restricted from investing in the bonds they had credit-enhanced. However, the new Draft Directions expand this restriction by prohibiting all REs from investing in bonds that have been credit-enhanced through a PCE, regardless of whether they are the PCE provider. The draft regulations state that the same is with an intent to promote REs enabling wider investor participation.

This is, in fact, a major point that may need the attention of the regulator. A universal bar on all REs from investing in bonds which are wrapped by a PCE is neither desirable, nor optimal. Most bond placements are done by REs, and REs may have to warehouse the bonds. In addition, the treasuries of many REs make opportunistic investments in bonds.

Take, for instance, bonds credit enhanced by NABFID. The whole purpose of NABFID is to permit bonds to be issued by infrastructure sector entities, by which banks who may have extended funding will get an exit. But the treasuries of the very same banks may want to invest in the bonds, once the bonds have the backing of NABFID support. There is no reason why, for the sake of wider participation, investment by regulated entities should be barred. This is particularly at the present stage of India’s bond markets, where the markets are not liquid and mature enough to attract retail participation. 

What is the impact on capital computation?

Under the Draft Directions the capital is required to be maintained by the REs providing PCE based on the PCE amount based on applicable risk weight to the pre-enhanced rating of the bond. Under the earlier framework, the capital was computed so as to be equal to the difference between the capital required on bond before credit enhancement and the capital required on bond after credit enhancement. That is, the existing framework ensures that the PCE does not result into a capital release on a system-wide basis. This was not a logical provision, and we at VKC have made this point on various occasions2. 

Related Resources –

  1.  Union Budget 2025: Key Highlights and Reforms focusing on Financial Sector Entities ↩︎
  2. Partial Credit Enhancement: A Catalyst for Boosting Infrastructure Bond Issuances? ↩︎

Partial Credit Enhancement: A Catalyst for Boosting Infrastructure Bond Issuances?

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-Abhirup Ghosh (abhirup@vinodkothari.com)

What is partial credit enhancement?

Partial Credit Enhancement (PCE) is a risk-mitigating financial tool where a third party provides limited financial backing to improve the creditworthiness of a debt instrument. It ensures that investors are partially protected against default risk, making it easier for issuers to raise funds at better terms.

The key features of a PCE are as follows:

  1. Parties involved: A typical PCE structure would involve at least three parties:
  • Issuer: A company or an entity that wants to raise funds by issuing debt instruments;
  • PCE Provider or Credit Enhancer: A third party (usually a government agency or a financial institution with strong credibility) that provides the credit enhancement 
  • Investor(s): The one who invests in the debt instruments. 
  1. Multiple forms: Can be structured in various forms, like guarantee, subordinated line of credit, investment in subordinated tranche, cash collateral etc. 
  2. Limited coverage: Unlike full credit enhancement, PCE covers only a portion of the potential losses in case of default. The extent of coverage is pre-fixed and does not extend once the same is exhausted.
  3. Improved Credit Rating: PCE lowers the perceived credit risk, leading to an improved bond rating by credit rating agencies. A higher credit rating results in lower interest rates, benefiting the issuer.

Why has this become so important all of a sudden?

The concept of PCE has been in India for quite some time now, and is commonly used in securitisation transactions. However, the Finance Minister’s announcement during Union Budget 2025 about setting up of a PCE facility under the National Bank for Financing Infrastructure Development (NaBFID) has brought this into the limelight.

How does it help issuance of bonds by an infrastructure entity?

Infrastructure development is the backbone of economic growth, but funding large-scale projects such as highways, railways, power plants, and airports requires substantial capital. Infrastructure projects often face challenges in raising funds due to their long gestation periods, high risks, and lower credit ratings. PCE serves as an effective financial tool to improve the creditworthiness of infrastructure bonds, making them more attractive to investors. By providing a partial guarantee or security, PCE helps reduce the cost of borrowing and widens investor participation, ultimately facilitating infrastructure financing.

Challenges in Infrastructure Bond Issuances

Infrastructure bond issuances face several obstacles that make fundraising difficult. One of the primary challenges is low credit ratings. Infrastructure projects, especially those in their early stages, often receive sub-investment-grade ratings (such as BBB or lower), making them unattractive to investors. Additionally, these projects are subject to high perceived risks, including revenue uncertainty, regulatory hurdles, construction delays, and cost overruns. Since many infrastructure projects rely on user charges, such as tolls or metro fares, their cash flow projections can be unpredictable.

Another major issue is the long maturity period of infrastructure bonds. Most investors prefer short- to medium-term investments, whereas infrastructure bonds typically have tenures of 10 to 30 years. This mismatch reduces the appetite for such bonds in the market. Lastly, lack of institutional investor participation further limits the success of infrastructure bond issuances, as pension funds, insurance companies, and mutual funds prefer highly rated bonds with stable returns.

Enhancing Credit Ratings and Investor Confidence

One of the most significant ways PCE helps infrastructure bond issuances is by improving their credit ratings. When a bank or financial institution provides partial credit enhancement in the form of a guarantee or reserve fund, it reduces the default risk associated with the bond. This leads to a higher credit rating, making the bond more attractive to investors. For example, an infrastructure company with a BBB-rated bond issuance may improve its rating to A with a 20% PCE support, or AA with a 50% PCE support thereby increasing demand from investors. A higher rating not only boosts investor confidence but also expands the pool of potential buyers, including institutional investors such as pension funds and insurance companies.

Reducing Cost of Borrowing

By improving the credit rating of infrastructure bonds, PCE directly leads to a reduction in interest costs. Bonds with higher ratings attract lower interest rates, which helps infrastructure companies secure financing at more affordable terms. For instance, without PCE, a BBB-rated bond may require 12%, whereas a bond upgraded to an AA rating with PCE support may only require 9%. This reduction in interest rates can result in significant savings over the life of the bond. Lower borrowing costs also make infrastructure projects more financially viable, ensuring their timely execution and long-term sustainability.

Attracting Institutional Investors

Institutional investors, such as mutual funds, pension funds, and insurance companies, typically have strict investment guidelines that restrict them from investing in low-rated securities. Since many of these investors require bonds to be rated AA or higher, infrastructure bonds often struggle to meet these requirements. PCE helps bridge this gap by enhancing the credit rating, making infrastructure bonds eligible for investment by these large institutional players. This leads to greater liquidity and stability in the corporate bond market, ensuring a steady flow of capital to infrastructure projects.

Why is issuance of bonds helpful/ important for the infrastructure entity?

PCE contributes to the overall development of the corporate bond market by encouraging more issuers to raise funds through bonds rather than relying solely on bank loans. Traditionally, infrastructure financing in India has been dependent on banks, which exposes them to high asset-liability mismatches due to the long tenure of infrastructure projects. By facilitating infrastructure bond issuances, PCE helps shift the burden away from banks and towards a broader investor base. This not only diversifies funding sources but also enhances financial stability in the banking sector.

As per a CII report (2022), the infrastructure financing gap is estimated at over 5% of GDP. Approx. 80% of the investment in infrastructure space is by government agencies (80%), and the remaining 20% comes from private developers. 

As per the National Infrastructure Pipelines, the total investment target was set at INR 111 trillion (USD 1.34 trillion) for the period between FY 20 and FY 25; and only 6-8% (INR 6.66-8.88) of the such targets were expected to be met by bond issuances. Reliance on bond markets is planned to the extent of 6% to 8% (INR 6.66 – 8.88 trillion). As per the said estimates, the average annual issuances should have been INR 1.480 trillion. However, between FY18 and FY22, the issuance of infrastructure bonds has been at INR 5.37 trillion, that is, an average of INR 1.07 trillion per annum, that is a shortfall of ~30% compared to the target.

Furthermore, the issuances have been highly concentrated in the top 5 PSUs. The charts below show the annual bond issuances between FY 18 – FY 22, and share of issuance by top 5 PSUs and others:

Source: CRISIL

The market is dominated by highly rated issuers. In general approx. 75% of bond issuers are rated AAA, and more than 90% of the issuances are by AA and above rated entities. The reason for this dominance by highly rated issuers is the fact that for practical purposes, the most acceptable rating in the infra bonds space is AA, as long term investors like insurance companies, pension funds etc. are by regulation required to invest in AA or above rated papers. 

PCE support from a credible source will help a lot of infrastructure operators, who are stopped at the gate, with ratings in the range of A, with easy access to the market. 

Existing scheme for PCE – why has it not found takers

The existing scheme for PCE was notified by the RBI in 2015. In a nutshell, the scheme provides for the following:

Form of PCE: To be structured as a non-funded, irrevocable contingent line of credit. This facility can be drawn upon in the event of cash flow shortfalls affecting bond servicing.

Limitations: The total PCE extended by a single bank cannot exceed 20% of the bond’s total size; however, overall, the PCE provided by all banks, in aggregate, cannot exceed 50% of the bond’s total size.

Further, PCE can be provided only to bonds which have a pre-enhanced rating of BBB- or above.

Capital Requirements: The bank providing PCE does not hold capital based only on its PCE amount. Instead, it calculates the capital based on the difference between:

  • The capital required before credit enhancement.
  • The capital required after credit enhancement.

The objective is to ensure that the PCE provider should absorb the risks that it covers in the entire transaction. Illustrating with an example:

Assume that the total bond size is Rs. 100 crores for which PCE to the extent of Rs. 20 crore is provided by a bank. The pre-enhanced rating of the bond is BBB which gets enhanced to AA with the PCE. In this scenario:

  1. At the pre-enhanced rating of BBB (100% risk weight), the capital requirement on the total bond size (Rs.100 crores) is Rs.9.00 crores.
  2. The capital requirement for the bond (Rs.100 crores) at the enhanced rating (AA, i.e., 30% risk weight)) would be Rs.2.70 crores.
  3. As such, the PCE provider will be required to hold the difference in capital i.e., Rs.6.30 crores (Rs.9.00 crores – Rs.2.70 crores).

As can be seen, the capital has to be maintained on the total bond issuance, and not just the exposure. Ironically, this capital has to be maintained until the outstanding principal of bonds falls below the extent of PCE provided​. Usually, the bonds are amortising in nature – that is, the actual exposure of the guarantor continues to come down. Given, however, that default in bonds may be back-ended, the capital has still to be maintained till the redemption of the bonds​. This requires the PCE provider to maintain huge regulatory capital for a significantly long period of time; which also gets reflected in the ultimate cost to the beneficiary, therefore, making it unviable. 

How to make it work?

The FM’s announcement though comes with a lot of promise, as it shows a positive intent. But to make things work, there are quite a few things that should be put into place:

  1. Specific applicability: Currently, the PCE framework applies only to banks. For NaBFID to commence its PCE operations, it would be ideal to receive explicit approval from the RBI, even if the requirement is minor or procedural in nature.
  1. Limitations: Currently, the RBI’s PCE framework restricts a single entity to providing only 20% of the total 50% PCE limit for a bond issuance. It is recommended that a single institution, such as NaBFID, be allowed to provide the entire PCE, which would enhance flexibility.  The existing framework is not particularly attractive for banks in India. In the infrastructure finance sector, a 20% PCE contribution from a single entity may not be sufficient to secure a strong rating from credit rating agencies. Removing this 20% sub-limit would grant NaBFID greater flexibility while also reducing the time required to identify multiple institutions to fulfill the remaining PCE. Additionally, this change would lead to a reduction in operational expenses associated with coordinating multiple PCE providers.
  1. Capital treatment: The current setting of capital requirement makes the transactions very costly. There has to be an alternative way of achieving the objective. Setting the capital requirement as a fixed proportion of the outstanding bond value may not be appropriate, as defaults can occur at any stage. A more effective approach would be to apply the capital treatment for structured credit risk transfer under the Basel III framework, that is SEC ERBA.  Under Basel III, capital requirements are not linked to the total bond issuance size but are instead based on the rating of the tranche and the extent of exposure undertaken. This method ensures that capital is aligned with the actual risk exposure, rather than a fixed percentage of the bond size. Additionally, it accounts for the possibility of defaults occurring later in the bond’s lifecycle, providing a more efficient risk management framework.
  1. Credit risk transfer: The PCE framework should specifically allow credit risk transfer by the PCE provider – this will help the PCE provider reduce its exposures, and consequently, extent of capital to be maintained on the PCE provided​. This will help in reducing the cost of the PCE support as well.

Enhanced role of CRAs in technical defaults by issuers

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– Palak Jaiswani, Manager & Simrat Singh, Executive | corplaw@vinodkothari.com

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AT1 Bonds: Death before it is due?

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– Abhirup Ghosh | abhirup@vinodkothari.com

Additional Tier 1 bonds which are known by many names – AT1 bonds or Contingently Convertible Bonds (CoCo Bonds) or Perpetual Bonds, are capital structure instruments. Every liability instrument in corporate finance is essentially a capital structure instrument, that is, it is somewhere in the order of priority for its loss absorbency feature, but some of the instruments are high in the order of priorities, and therefore, their placing in the capital structure is commonly not a matter of concern. However, AT1 bonds are placed just after common equity, and therefore, if equity has suffered a meltdown, AT1 bonds will be next to be hit.

This article examines the life and death of AT1 bonds.

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A shocker for the bond markets: Withholding tax to apply on listed bonds, without grandfathering 

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Team Financial Services | finserv@vinodkothari.com

Section 193 of the Income Tax Act[1] provides for TDS payment in case of interest on securities. Currently listed debentures are exempt from TDS without any limit. The exemption comes way of clause (ix) of the proviso to sec. 193.

The said clause is now sought to be deleted. The deletion, if affirmed by the statute, will be effective from 1st April, 2023, thereby meaning that any interest paid by companies on listed bonds will now be subject to tax.

The amendment has a retroactive effect, as it applies even to bonds that may have already been issued. If the issuer and the investor have both entered into a securities transaction on the strength of the law then existing, and the bondholder suddenly comes under the purview of deduction of tax at source, this will be like acquiring a security with no safe harbor. It is notable that certainty of tax treatment for capital market transactions is an essential mainstay for the healthy growth of capital markets.

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Credit Default Swaps (Global and Indian Scenario)

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Credit default swaps (what is happening in global markets and the recommendations of the working group)

Other ‘I am the best’ presentations can be viewed here

Our other resources on related topics –

      1. https://vinodkothari.com/wp-content/uploads/RBIa%CC%82%C2%80%C2%99s-Guidelines-on-Credit-Default-Swaps-for-Corporate-Bonds.pdf
      2. https://vinodkothari.com/2021/02/rbi-issues-draft-directions-on-credit-derivatives/
      3. https://vinodkothari.com/isda_new_definition_credit-derivs_impact/
      4. https://vinodkothari.com/2013/12/secnews-110810/
      5. https://vinodkothari.com/rbi-new-cds-guidelines-feeble-effort-start-non-starting-product/