of over five years as the same are eligible for tax exemption. This would to some extent meet the long-term funding requirement of banks, the regulator said.
Large institutional investors like pension funds, provident funds, insurance companies, etc should be encouraged to invest in bonds issued by banks, it added.
In this regard, the report suggested that banks explore the option of take-out financing apart from promoting securitisation market for better asset liability management.
The report maintained banks should charge pre-payment penalty on fixed rate loan products on the outstanding amount only, adding penalty should be reasonable so that it does not act as a disincentive for the fixed rate loan borrowers.