Reserve Bank of India has brought a number of changes in bonds issued under Basel III international banking norms as a way to make it easier for banks to raise capital and also to make such bonds attractive for investors.The first part of the change is , the minimum maturity period of such bonds have been introduced and banks have been allowed to tap retail investors. as presently the share of retail investors in the bond market is very very low as compared to other developed economies.
Reserve Bank of India informed banks can issue any kind of papers to retail investors, including tier-I bonds and tier-II perpetual bonds, provided they made sure that such bond buyers fully understand the complexity and risks of such investment. To broaden the investor base, Reserve Bank of India halved the maturity of the bonds from 10 to 5 years, paving the way for the local lenders to raise money through such bonds in the international market. Now RBI is hoping that with these changes there will be increase in the number or investors for the bonds from the retail side
Reserve Bank of India informed banks can issue any kind of papers to retail investors, including tier-I bonds and tier-II perpetual bonds, provided they made sure that such bond buyers fully understand the complexity and risks of such investment. To broaden the investor base, Reserve Bank of India halved the maturity of the bonds from 10 to 5 years, paving the way for the local lenders to raise money through such bonds in the international market. Now RBI is hoping that with these changes there will be increase in the number or investors for the bonds from the retail side
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