RBI's bond loss re­lief for banks

India Business Journal - - NEWS ROUND-UP -

The RBI has al­lowed banks to spread pro­vi­sion­ing to­wards de­pre­ci­a­tion of bond port­fo­lio over four quar­ters, com­menc­ing from the quar­ter in which the loss is first in­curred. This re­lax­ation comes in the back­drop of banks fac­ing huge pro­vi­sion­ing bur­den to­wards bad loans in the fourth quar­ter of

FY18. Bond yields have risen sharply over the past six months on con­cerns of ex­cess govern­ment bond sup­ply. Yields on the 10-year govern­ment se­cu­rity jumped from 6.51 per cent at the end of the first quar­ter of FY18 to 7.55 per cent at the end of fourth quar­ter of FY18.

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