Core worth of PSB capital bonds half that of similar other paper: Ind-Ra

The intrinsic net-worth of bonds being used to infuse capital worth Rs 14,500 crore in four public sector banks (PSBs) will be 50 per cent lower than similar maturity government papers in the market, according to rating agency India Rating.

The illiquid, non-trading nature of these securities could add to the discount.  So it may not strengthen their tangible equity by as much but may bolster regulatory norms.

The Government of India has decided to infuse Rs 14,500 crore in four PSBs – Central Bank of India - Rs 4,800 crore, IOB – 4,100 crore, Bank of India Rs 3,000 crore and