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Our Bureau

Mumbai , June 11

THE Reserve Bank of India today allowed banks to raise long-term bonds with a minimum maturity of five years to finance infrastructure projects.

As per the guidelines issued, banks will be allowed to raise funds to the extent of their exposure of residual maturity of more than five years to the infrastructure sector. It is intended that banks should have first provided assistance to such infrastructure projects before raising resources through bonds.

In its annual policy statement issued in April, RBI proposed to allow banks to raise long-term resources from the market, which are not in the nature of subordinated debt.

The minimum maturity period of the long-term bonds will be five years. The bonds may be issued through a public issue or private placement as per SEBI norms. The bonds should be issued in plain vanilla form without call or put option and with a fixed or floating rate of interest.

More Stories on : Infrastructure | RBI & Other Central Banks | Corporate Bonds

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