banking
overview
| news
| basics
|
lendings
|advanced banking
| products
| IT
in banking
articles
& policies |
banking software|
deposits|
bank directory|
internet banking|
bank results|
banking & you
Issue of Long-term Bonds by Banks
- Reserve Bank Guidelines
Terms of Issue for Long-term Bonds by Banks
(i) Type of bond
The instrument shall be fully paid, redeemable, unsecured and would be ranked pari passu along with other uninsured, unsecured creditors.
(ii) Currency of issue
The bonds shall be denominated in Indian Rupees.
(iii) Maturity period
The minimum maturity period of the long-term bonds shall be 5 years.
(iv) Amount
The total amount of long-term bonds issued shall not be more than the bank’s exposure of residual maturity of more than five years to the infrastructure sector at the time of issuing the bonds.
(v) Options
The bonds should be issued in plain vanilla form without call or put option.
(vi) Rate of interest
The bonds may be issued with a fixed or floating rate of interest. The floating rate of interest shall be referenced to market determined benchmark rates.
(vii) Method of issue
The bonds may be issued through a public issue or private placement in full compliance with SEBI guidelines / norms including mandatory rating and listing.
Other requirements
(viii) Compliance with reserve requirements
The bonds will form part of time liabilities and would therefore be subjected to CRR/SLR requirements. The funds collected by/ on behalf of the bank for the issue, pending final allotment shall also be taken into account for the purpose.
(ix) Eligibility for deposit insurance
The bonds would not be eligible for deposit insurance.
(x) Regulatory compliance
Banks issuing long-term bonds shall be required to comply with all relevant SEBI and other regulatory authorities’ regulations/ requirements.
(xi) FEMA requirement
Banks shall comply with the necessary FEMA requirements.
(xii) Reporting requirements
The banks issuing long term bonds shall submit a report to Reserve Bank of India giving details of the bonds issued, such as amount raised, maturity of the instrument, rate of interest, together with a copy of the offer document, soon after the issue is completed.
GO TO DAILY NEWS.
about us | contact us |
associate | terms of use | disclaimer
©copyright banknetindia.com All rights reserved worldwide.