RBI BARS BONDS WITH DAILY PUT & CALL OPTIONS

In its final guidelines on bond issuance of less than one year, RBI has said no entity can issue bonds for less than 90 days and that no entity can offer a put and call option before 90 days. Only those corporates whose accounts are classified as a 'Standard' account - one where all debts are serviced in time by their bankers - can float short-term bonds. Secondly, banks can invest in short-term bonds of those corporates who have been sanctioned working capital limits by a bank.