The government is working on setting up a “backstop facility” as announced in the Union budget in a bid to deepen the corporate bond market, a senior government official said on Friday.

At an event organised by CII, Anand Mohan Bajaj, additional secretary in the ministry of finance, said the government in consultation with the RBI has increased foreign investor participation ceiling in corporate bonds from 9 per cent to 15 per cent.

On the corporate bond market, he said a lot has been done over the years and a lot needs to be done. “We are working on a very comprehensive facility. It will certainly instill confidence among the participants in the corporate bond market,” he said.

Based on a Sebi proposal, an announcement in the Union Budget for 2021-22 was made on the creation of a backstop facility that would purchase investment-grade debt securities both in stressed and normal times, and help the development of the bond market.

Bajaj said the government was also working on framing an investor charter. The charter will focus on the rights and responsibilities of investors and also the investor grievance redressal mechanism.