Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Monday, 8 June said the markets regulator is on track to launch a bond tokenisation pilot within six to nine months, as part of a sweeping reform agenda aimed at deepening India's capital markets. Pandey made the remarks at the ICICI Securities India Investor Conference in Mumbai.

Bond Tokenisation: What SEBI Is Planning

The upcoming pilot is designed to make fixed-income instruments more accessible and operationally efficient for a broader set of investors. Pandey described bond tokenisation as a key step toward improving participation in India's debt markets. 'The regulator is expected to roll out a pilot for bond tokenisation within six to nine months,' he said, signalling a concrete timeline for an initiative that has long been discussed in regulatory circles.

This comes amid rapid growth in India's bond issuance landscape, with corporate bond issuances having crossed ₹9 lakh crore. Despite that scale, SEBI acknowledged that secondary market liquidity remains relatively shallow — a structural gap the tokenisation pilot, alongside other reforms, is intended to address.

Corporate Bond Market and RBI Coordination

On the corporate bond market, Pandey said SEBI is developing a market-making framework to improve liquidity in secondary trading. He also underlined that coordination with the Reserve Bank of India (RBI) is critical for the next phase of reforms, particularly around products such as total return swaps and corporate bond derivatives, for which the central bank has already released draft guidelines earlier this year. 'These products are expected to move forward once the regulatory framework is finalised,' Pandey explained.

Broader Market Strength: The Numbers

Pandey pointed to macro-level indicators that reflect the growing centrality of capital markets in India's financial system. Overall market capitalisation has risen to around 128 per cent of GDP, while mutual fund assets have climbed beyond ₹80 lakh crore. A revised SEBI methodology — using granular market-level data and wider instrument coverage — now presents what the regulator describes as a more accurate picture of this strength. 'Together, these developments show a clear shift: Capital markets are increasingly becoming a core avenue for household savings and wealth creation,' Pandey stated.

Broker Capital Norms Under Review

In another significant reform area, SEBI is reviewing variable net worth requirements for stock brokers. Pandey said the proposal remains under examination and no final decision has been taken, indicating that the framework could be recalibrated to balance capital adequacy with operational flexibility for intermediaries. The review also encompasses IPO price discovery and foreign investor access, both of which form part of SEBI's wider agenda for the year.

What This Means for Investors

The convergence of bond tokenisation, a market-making framework, and revised broker norms signals a structural push to bring India's fixed-income market closer to the scale and efficiency of its equity segment. Notably, this reform cluster arrives as household financial savings are increasingly flowing into market instruments rather than traditional bank deposits — a trend SEBI appears keen to sustain and formalise. The next key milestone will be the finalisation of the RBI-SEBI regulatory framework for bond derivatives, after which the tokenisation pilot timeline is expected to firm up further.