India Widens Global Funds' Access to $639-bn Credit Market

INDIA HAS EXPANDED the usage of total return swaps, a derivative product popular with foreign investors, according to sources, giving them a wider access to the nation's $639-billion credit market.

- SAIKAT DAS, SUBHADIP SIRCAR & BHASKAR DUTTA

International Financial Services Centers Authority, the financial regulator for the GIFT City, has allowed global banks, including HSBC Holdings and Standard Chartered, to offer total return swaps for corporate bonds, sources said.

A total return swap (TRS) is a financial contract where two parties agree to exchange the total return of an underlying asset, such as a bond or stock, for a different stream of payments, based on a floating interest rate.