India Central Bank Proposes Relaxing Key Investment Class Rules
- RBI paper suggests removing current cap on HTM securities
- Also proposes allowing more types of instruments in HTM
Outside the Reserve Bank of India (RBI) building in Mumbai.
Photographer: Kanishka Sonthali/BloombergThis article is for subscribers only.
India’s central bank has suggested changes to the valuation of bank investments, including relaxing rules on a key class of long-term investments that are shielded from frequent valuation changes, but tightening those on shifting securities between classes.
A Reserve Bank of India discussion paper released late Friday suggests removing caps on the Held-To-Maturity (HTM) class of securities, and allowing more types of instruments to be held within them. However banks will not be allowed to sell more than 5% of their investments in this class per year, barring specified exceptions, under the proposed rules.