Banks can transfer bonds held in trading portfolios till Aug 23 to HTM - cbank
MUMBAI Aug 23 (Reuters) - The Reserve Bank of India said on Friday banks can transfer their outstanding government securities held till Aug. 23 to held-to-maturity (HTM) segment valuing them at July 15 prices or market levels, whichever is lower.
Last week, the RBI had announced steps relaxing banks' mandatory bond holding rules to reduce their mark-to-market losses following the central bank's extraordinary steps mid-July of draining out liquidity to contain the rupee's decline.
The RBI had allowed banks to hold bonds up to 24.5 percent of deposits in HTM as against a previous rule of gradually bringing them down to 23 percent.
Elaborating on its last week's steps, the RBI also said banks can equally distribute their net depreciation in government bond holdings equally during the fiscal year 2013/14.
Earlier banks had to provide for the entire net loss on their government securities trading portfolios on each valuation dates. (Reporting by Suvashree Dey Choudhury and Himank Sharma; Editing by Anand Basu)