Don’t miss the latest developments in business and finance.

Banks May Get Use Of Gilts To Clean Balance Sheets

Image
Our Banking Bureau BUSINESS STANDARD
Last Updated : Jan 28 2013 | 1:27 AM IST

The Reserve Bank of India (RBI) may allow commercial banks to book the appreciation of their stocks of government securities in their profit and loss (P&L) accounts and use the proceeds to clean their balance sheets, though on a one-time basis.

The government securities portfolio of banks is classified in three categories: held to maturity (HTM), available for sale (AFS) and held for trading (HFT). Banks are required to mark to market the individual scrips in the AFS category at the end of every quarter.

According to the norms, the net depreciation should be recognised and fully provided for, while the net appreciation should be ignored.

More From This Section

First Published: Jan 07 2003 | 12:00 AM IST

Next Story