RBI ISSUES GUIDELINES ON CAPITAL CLASSIFICATION

The Reserve Bank of India released guidelines on how banks must classify capital in their balance sheets to ensure uniformity in reporting from the financial year ending March 31, 2010. The RBI has asked banks to classify perpetual non-cumulative preference shares, redeemable non-cumulative preference shares and redeemable non-cumulative preference shares and subordinated debt should be clearly classified as borrowing. Banks must adopt this classification while preparing their balance sheet for the current financial year.