India needs banks, capital markets to work together to fund growth: SEBI chief Tuhin Kanta Pandey

Reports coming in for today mention that India’s expanding economy will require a wider and more diverse pool of capital, with banks and capital markets playing complementary rather than competing roles, Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey stated on Wednesday.

Speaking at the 13th SBI Banking and Economics Conclave, Pandey stated India’s financing requirements were becoming more diverse as the economy expands, with different sectors requiring different forms and durations of capital.

“Some businesses need debt. Others need risk capital. Infrastructure may require patient, long-duration capital. Young businesses may need equity before they are ready for conventional debt. Large and established firms may benefit from diversifying their borrowings between banks and bond markets,” Pandey stated.

“As a result, the question before us is not whether India’s expansion should be financed by banks or markets. We need both. And we need both to be firm,” Pandey stated.

Pandey stated India needs capital for infrastructure and manufacturing, urbanisation and energy transition, as well as for micro, small and medium enterprises and large firms. The country additionally needs financing for traditional businesses and technology-fuelled enterprises, he further noted.

He stated Indian firms had boosted, on average, around Rs 10 trillion every year through equity and debt issuances in the securities market over the last decade.

Market capitalisation has grown at a compound annual rate of around 17 percent since FY16 and stood at around Rs 481 trillion, while mutual fund assets under management rose from around Rs 12.3 trillion in FY16 to around Rs 87 trillion by August 2026, Pandey stated.

The number of unique market participants in the securities-market ecosystem has additionally more than tripled to around 150 million, he further noted.

Pandey stated the corporate bond market was an important bridge between banks and capital markets, with outstanding corporate bonds reaching around Rs 61 trillion as of August 2026, equivalent to around 55 percent of outstanding bank credit to industry and services.

He stated SEBI’s focus was to make the corporate bond market more accessible, efficient and liquid, while additionally improving investor participation and price discovery.

“The real resilience of India’s financial system will come from each part doing what it does best — and from all of them working together to ensure that savings can reach productive opportunities efficiently and responsibly,” Pandey stated.

India has demonstrated considerable economic resilience, Pandey stated. Its ambitions for the coming decade are even larger, and financing those ambitions will require a financial system that is not merely bigger, but deeper, more diverse, efficient, resilient and trusted.

“Banking and capital markets will stay central to this journey. Mutual funds, insurers, pension funds, alternative investment funds, REITs and InvITs will bring different pools of savings and different forms of capital,” he stated.