Monday, November 15, 2010

PRUDENTIAL NORMS ON INVESTMENT IN ZERO COUPON BONDS

RBI has decided that:

  • Banks should henceforth not invest in ZCBs unless the issuer builds up sinking fund for all accrued interest and keeps it invested in liquid investments/securities (Government bonds), and
  • Banks should put in place conservative limits for their investments in ZCBs.

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