Public sector banks request RBI on bond portfolios as yields harden

At its policy review in April, the RBI had increased the limit on HTM portfolios to 23 per cent of net demand and time liabilities till March 31, 2023

Senior treasury officials of some state-owned banks requested officials from the Reserve Bank of India (RBI) to provide dispensations regarding their bond holdings at an informal meeting on Friday, sources told Business Standard.

The treasury officials requested a further increase in the limits for held-to-maturity (HTM) portfolios for government bonds as well as permission to amortise marked-to-market losses incurred on bond holdings in the current quarter.

Leeway on amortisation would provide banks the room to spread out treasury losses incurred in the first quarter throughout the entire year, giving more elbow room on usage of capital, treasury officials said. The communication by