Banks can now issue masala bonds: RBI
MUMBAI: Indian banks can raise Tier I, Tier II and funds for lending to the infrastructure sector by issuing rupee denominated masala bonds within the Rs 2.44 lakh crore foreign investment ceiling for corporate bonds, Reserve Bank of India said in a notification on Thursday.
Banks can raise perpetual debt which qualifies as Tier I capital through rupee denominated bonds overseas. They can also raise long term funds to finance infrastructure and affordable housing projects in India, the central bank said. Tier I capital is the core capital of the bank is used to gauge a bank’s capability of absorbing losses
On Thursday, RBI just notified the measures announced for the bond market in August which included allowing banks to issue masala bonds.
Until now these bonds could only be issued by companies and NBFCs. These bonds are different from other overseas instruments because the currency risk is borne by the investor.
Source:Economic Times
No comments:
Post a Comment