RBI monetary policy review: Revised HTM cap to aid govt borrowing

The increase in the limit for keeping specified securities in the held-to-maturity (HTM) portfolio from 22 per cent to 23 per cent will provide room for supporting the elevated borrowing programme of the government.

It is also expected to help in softening the blow from hardening bond yields, bankers and analysts said.

Through Friday’s policy announcement, the Reserve Bank of India hiked the limits under HTM until March 2023.

Anil Gupta, vice president and co-group head, ICRA, said the increase in the HTM limit by 1 percentage point could create an additional headroom of Rs 1.6-1.7 trillion for banks.

They can hold government securities