Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARDS :: VAT Audit :: form 3cd :: VAT RATES :: TDS :: cpt :: ACCOUNTING STANDARD
 
 
« Latest Circulars »
 RBI amends Banking Ombudsman Scheme: Includes Complaints relating to Misselling and Mobile/ Electronic Banking
 Recording of Details of Transactions in Passbook/ Statement of Account
 Exclusion of β€œThe Royal Bank of Scotland N.V.” from the Second Schedule to the Reserve Bank of India Act, 1934
 Monitoring of Foreign Investment under PIS in Indian Companies- Removal from Ban List - FIIs/RPIs : M/s IDFC Limited
 FIIs/FPIs can now invest 24 to 49 per cent under PIS in M/s Satin Creditcare Network Limited
  Bankers & SME Borrowers: The Emerging Mantras (Shri S. S. Mundra, Deputy Governor – June 16, 2017 – at the 3rd Bankers Borrowers Business Summit organized by ASSOCHAM in New Delhi1)
 RBI extends Directions issued to Navodaya Urban Co-operative Bank Ltd, Nagpur, Maharashtra
 Developments in India’s Balance of Payments during the Fourth Quarter (January-March) of 2016-17
 Bankers & SME Borrowers: The Emerging Mantras (Shri S. S. Mundra, Deputy Governor – June 16, 2017 – at the 3rd Bankers Borrowers Business Summit organized by ASSOCHAM in New Delhi1)
 RBI-Formation of a new district in the State of West Bengal - Assignment of Lead Bank Responsibility
 RBI-Period for Submission of Agency Commission Claims

RBI-Issue of Long Term Bonds by banks for Financing of Infrastructure and Affordable Housing Cross Holding
June, 02nd 2015

RBI/2014-15/618
DBR.BP.BC.No.98/08.12.014/2014-15

June 01, 2015

All Scheduled Commercial Banks
(excluding RRBs)

Dear Sir,

Issue of Long Term Bonds by banks for Financing of Infrastructure and Affordable Housing – Cross Holding

Please refer to our circular DBOD.BP.BC.No.25/08.12.014/2014-15 dated July 15, 2014 allowing banks to issue long term bonds, with exemptions from certain regulatory pre-emptions, for their financing of infrastructure and affordable housing loans. Further, in order to provide liquidity to retail investors in such bonds, we also allowed banks; vide circular DBOD.BP.BC.No.50/08.12.014/2014-15 dated November 27, 2014, to extend loans to individuals against such long-term bonds issued by them.

2. In terms of paragraph 13 of circular dated July 15, 2014, presently banks are not permitted to cross-hold such bonds among themselves. It has been represented to us that such prohibition on cross-holding inhibits the liquidity and tradability of these bonds, as banks are the major participants in the debt market.

3. On a review, it has been decided that henceforth, banks can invest in the long term bonds issued by other banks under the provisions of the above-mentioned circular dated July 15, 2014. However, 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. To preserve this objective and in order to prevent double counting of regulatory exemptions allowed, such investments will be subject to conditions as follows:

  1. Banks’ investment in such bonds will not be treated as ‘assets with the banking system in India’ for the purpose of calculation of NDTL.

  2. Such investments are not to be held under HTM category.

  3. An investing bank’s investment in a specific issue of such bonds will be capped at 2% of the investing bank’s Tier 1 Capital or 5% of the issue size, whichever is lower.

  4. An investing bank’s aggregate holding in such bonds will be capped at 10% of its total Non-SLR investments.

  5. Not more than 20% of the primary issue size of such bond issuance can be allotted to banks.

  6. Banks cannot hold their own bonds.

6. All other terms and conditions as mentioned in circulars DBOD.BP.BC.No.25/08.12.014/2014-15 dated July 15, 2014 and DBOD.BP.BC.No.50/08.12.014/2014-15 dated November 27, 2014 will remain unchanged. Further, RBI’s relevant extant prudential norms will be applicable on such issuances and investments.

Yours faithfully,

(Sudarshan Sen)
Chief General Manager-in-Charge

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Organic SEO Outsourcing Organic Search Engine Optimization Outsourcing Organic Website SEO Organic SEO India Website SEO India Organic Search Engine Optimization India Organic Internet SEO India Organic Web

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions