Most effective routes to market depth and liquidity bypass reliance on derivatives, asserts SBI Head

State Bank of India Chairman Challa Sreenivasulu Setty emphasized the need to deepen India’s capital markets by widening the pool of listed companies and encouraging spot transactions for price discovery, rather than relying on derivatives. He stated that the recent SEBI measure to curb access to derivatives is a step in the right direction. Setty emphasized the importance of capital markets in mobilizing savings and achieving economic growth, and highlighted the need for India to devise mechanisms to ensure private placements lead to more open offers and better use of technology to reduce costs and enhance investor education. He also stressed the importance of strengthening investor protection and developing the Investor Protection Fund. Setty predicted that India will require ₹1,094 lakh crore in savings by 2036 to achieve its growth goals, and emphasized the need for capital markets to mobilize more private capital for key sectors with financing needs. He also highlighted the importance of domestic savings rates rising to 33.5% and money being channeled for productive use rather than derivatives.