SEBI Considers Exempting Merchant Bankers from Small‑Value Debt Issue Rules

SEBI has announced that it is reviewing the existing framework governing modest‑size debt issuances, aiming to simplify compliance for merchant bankers. Under current rules, merchant bankers must obtain approval and meet disclosure obligations even for debt issues below a set threshold, a requirement industry players say adds unnecessary cost and delay. Sources familiar with the deliberations said the regulator is considering an exemption that would let merchant bankers issue small‑value debt instruments without the full suite of approvals, while still ensuring investor protection through basic disclosure norms. The proposal forms part of SEBI’s broader effort to deepen India’s debt market and encourage more issuers, especially SMEs, to raise funds; a final decision is expected after stakeholder consultations. If implemented, the change could cut transaction time and cost, potentially widening participation in the corporate bond segment.