RBI releases draft norms on CDS in corp bonds

The Reserve Bank of India on Wednesday released draft guidelines on the introduction of credit default swaps (CDS) for corporate bonds.

The guidelines said CDS shall not be written on securities with maturity of up to one year such as certificates of deposits, commercial papers, etc. The report also said the central bank was in favour of CDS being written on unlisted but rated bonds of infrastructure companies with a view to providing a fillip to infrastructure financing.