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: VAT RATES :: list of goods taxed at 4% :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: due date for vat payment :: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: cpt :: VAT Audit :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: empanelment
 
 
« Latest Circulars »
 Payment Systems - Next Orbit (Shri R. Gandhi, Deputy Governor - February 20, 2017 - at the launch of Bharat QR Code at Hotel Trident, Mumbai)
 Financing MSMEs: Banks & FinTechs – Competition, Collaboration or Competitive Collaboration? (Shri S. S. Mundra, Deputy Governor – February 20, 2017 – at the NAMCABS Seminar organized by College of Agricultural Banking in Mumbai)
 Issuance of Rupee denominated bonds overseas – Multilateral and Regional Financial Institutions as Investors
 RBI-Formation of twenty one new districts in the State of Telangana - Assignment of Lead Bank Responsibility
 RBI imposes penalty on Janata Urban Co-operative Bank Ltd., Wai, District Satara
 Monitoring of Foreign Investment under PIS in Indian Companies- Incorporation in Ban List–M/s HDFC Bank Ltd.
 Reserve Bank of India seeks Comments on Draft Circular on Rationalisation of Merchant Discount Rate (MDR) for Debit Card Transactions
 Forward Rate Agreement (FRA) and Interest Rate Swap (IRS) - Withdrawal of Fortnightly return
 RBI-Foreign Investments in India
  RBI cancels the Licence of the Shri Chhatrapati Urban Co-operative Bank Ltd., Pimple Nilakh, Pune, Maharashtra
  Finance Minister meets the Directors of the RBI Central Board

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