Banks Can Invest in Infra Bonds of Other Lenders: RBI

Subscribe to GoodReturns
For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

    The Reserve Bank of India on Monday allowed banks to invest in Infrastructure bonds issued by other banks.

    However, the RBI said, "the primary objective of allowing regulatory exemptions on CRR and SLR requirements as well as priority sector lending is to encourage issue of long term bonds for lending to infrastructure projects and affordable housing."

    Banks Can Invest in Infra Bonds of Other Lenders: RBI

    Banks cannot hold their own bonds and banks' investment in such bonds will not be treated as assets with the banking system in India? for the purpose of calculation of total deposits, it said.

    "Such investments are not to be held under HTM category," it said.

    "An investing bank's investment in a specific issue of such bonds will be capped at 2 per cent of the investing bank's Tier 1 Capital or 5 per cent of the issue size, whichever is lower," it added.

    GoodReturns.in

    Read more about: rbi banks infrastructure bonds
    Story first published: Tuesday, June 2, 2015, 12:57 [IST]
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more