2023-09-14 09:38:21am | Source: LKP Securities
Quote on today`s RBI`s New Valuation Rules for Bonds by Ajit Kabi, LKP Securities
Below the Quote on today`s RBI`s New Valuation Rules for Bonds by Ajit Kabi, Banking analyst at LKP Securities
"RBI has removed the cap on HTM bond investment by banks. Typically, Government bonds are categorized as HTM investments. Currently the investment limit is 19.5% of the bank's net deposit.
The recent move will allow banks to invest more on Govt securities and state development bonds. The new norm is likely to reduce the earning volatility on banks because HTM bonds need not be marked to market.
Investment in the AFS (available for sale) category also benefits since the new norms state they can move all valuation gains or losses in this category to an AFS reserve, bypassing their income statement."
The recent move will allow banks to invest more on Govt securities and state development bonds. The new norm is likely to reduce the earning volatility on banks because HTM bonds need not be marked to market.
Investment in the AFS (available for sale) category also benefits since the new norms state they can move all valuation gains or losses in this category to an AFS reserve, bypassing their income statement."
Above views are of the author and not of the website kindly read disclaimer
Disclaimer:
The content of this article is for informational purposes only and should not be considered financial or
investment advice. Investments in financial markets are subject to market risks, and past performance is
not indicative of future results. Readers are strongly advised to consult a licensed financial expert or
advisor for tailored advice before making any investment decisions. The data and information presented
in this article may not be accurate, comprehensive, or up-to-date. Readers should not rely solely on the
content of this article for any current or future financial references.
To Read Complete Disclaimer Click Here
Latest News
Paddy procurement rises sharply in Tamil Nadu, over ...
Daily Derivatives Report 27th October 2025 by Axis S...
Sell Natural Gas Oct @ 285 SL 290 TGT 280-275. MCX -...
India among `attractive` emerging markets for invest...
JPYINR trading range for the day is 57.34-58.14 - Ke...
HM Amit Shah to hand over modern deep-sea fishing ve...
Daily Technical Report 27th October 2025 by Axis Sec...
Strong domestic demand to keep India`s growth steady...
The Nifty 50 ended the week at 25,795, witnessing pr...
GST 2.0 rollout, festive demand drive record two-whe...
More News
Reaction On RBI Monetary Policy By Mr. Pankaj Kalra, CEO, Essar Oil and Gas Exploration and ...
Reaction on the RBI`s 50 bps cut in the repo rate by Mr. Amit Goyal, Managing Director, India Sotheby?s International Realty
Quote RBI MPC by Mr. Vinod Francis, General Manager, Chief Financial Officer, South Indian Bank
Reaction on The RBI`s Monetary Policy Announcement by Shrinivas Rao, FRICS, CEO, Vestian