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
Tripura developed 25,000 ha organic land; 1,300 MT p...
MSTC launches e-marketplace with new corporate offic...
Adani Enterprises Ltd`s Rs 1,000 crore NCD issue ful...
Insurance Sector Update: A better quarter by Kotak I...
Q1FY26 Earnings Preview - FMCG & Retail by Axis Secu...
Over 1.15 crore public grievances redressed between ...
IPO Note : GLEN Industries Ltd by Choice Broking Ltd
India offers domestic circular battery economy worth...
Chemicals Sector Update : Mixed results amid continu...
Real Estate Sector Update : Starting on a strong not...
