The benchmark 10-year bond yield was down 5 basis points at 7.72 per cent by 0337 GMT.
The move would strengthen the supervision and regulation of commercial banks, urban cooperative banks and non-banking financial companies.
Mumbai: Indian bonds gained on Wednesday morning after the central bank relaxed investment rules for foreign investors in debt by allowing them to invest in short-term treasury bills issued by the central government.
Last week the Reserve Bank of India withdrew a restriction that allowed foreign portfolio investors to invest in corporate and government debt with tenures of three years or more.
The benchmark 10-year bond yield was down 5 basis points at 7.72 per cent by 0337 GMT.
The partially convertible rupee was flat at 66.66 per dollar after falling to a low of 66.75 in initial trades.
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