RBI to release guidelines on rupee bonds soon

By: | Published: June 3, 2015 12:08 AM

The Reserve Bank of India is in consultation with the government in allowing companies to issue rupee bonds in the global bond market...

The Reserve Bank of India is in consultation with the government in allowing companies to issue rupee bonds in the global bond market and would soon put out guidelines for the same, said deputy governor HR Khan on Tuesday.

“We have drawn out the features of the bonds to the government and as soon as the government answers we would put out the guidelines,” said HR Khan in a press meet after the release of the monetary policy. When asked whether this could give raise to more transactions in the non-deliverable forward market for dollar/rupee, Khan said that efforts are being made to attract investors to hedge their risks in onshore derivatives market.

Further, the RBI has allowed banks to invest in infrastructure bonds of peer banks albeit upto a limit. Governor Rajan said that this enables for  banks to trade in such bonds but at the same time prevents concentration or misuse of funds. “The whole point was to encourage additional flows into banks other than normal route of deposits via bonds when they asked for some small limits, we gave them limits. It is a facility for them to trade,” said Rajan at the press meet.

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