Market regulator Sebi has proposed several changes to the municipal bond framework including easing fundraising norms and enabling pooled financing by multiple urban local bodies. On Wednesday, the regulator has proposed allowing municipalities to explicitly raise bonds for refinancing existing debt, while mandating detailed disclosures on lenders, repayment schedules, interest costs and any past restructuring. It has also suggested capping the use of issue proceeds towards working capital requirements at 25% and said issue proceeds should not be used for general purposes. As on March 31, 2026, 22 municipal corporations have accessed capital market and raised 4,540 crore through 31 issuances of municipal debt securities, Sebi data showed.