The Securities and Exchange Board of India (Sebi) has proposed a comprehensive overhaul of municipal bond regulations to enhance urban infrastructure financing in India. The changes aim to facilitate easier access to debt for urban bodies amid rising demands for infrastructure due to rapid urbanization. Key recommendations include allowing pooled bond issuances by multiple municipalities, which would benefit smaller municipalities that struggle to access debt markets independently. Sebi also suggested lowering the minimum face value of municipal bonds to ₹10,000 or ₹100,000 to encourage retail investors' participation. Furthermore, municipalities would be required to provide detailed disclosures regarding the refinancing of old debts, including lender information and repayment terms. To ensure responsible use of funds, Sebi proposed that no more than 25% of the bond proceeds can be allocated for working capital. Despite the regulatory framework introduced in 2015, municipal bonds have seen limited uptake, with only 22 municipal corporations raising ₹4,540 crore (approximately $550 million USD) through bond issuances by March 2026. Public feedback on the proposed changes is open until June 3.