Corporate Debt Market Development Fund (CDMDF) has been constituted to act as a Backstop Facility for the purchase of investment grade corporate debt securities
The government of India approved the Guarantee Scheme for Corporate Debt (GSCD) to provide a guarantee cover for the debt raised by the Corporate Debt Market Development Fund (CDMDF), which aims to stabilise the corporate bond market during times of stress. Accordingly, SEBI issued guidelines for the operation and management of the scheme and for the fund to act as a backstop facility for the purchase of investment grade corporate debt securities. A backstop facility in the stock market means a financial agreement or arrangement that creates a supplementary source of funds if the original source of funds fails to satisfy the essential demand, thereby being a last-resort support.