Bond standoff exposes flawed policy

Sebi is not wrong in expressing a desire to draw an empirical bright line for an outer limit, in order to be able to compute yields, and thereby value the bonds

The public debate over the change in policy governing perpetual bonds issued by banks underlines many an issue with policy choices and their implementation in the Indian regulatory landscape. 

While much ink has been spilled on the subject, a short summary of the situation would be useful. Perpetual bonds are essentially debt that do not have any specific date for repayment — i.e. they are perpetual and therefore akin to equity. Banks, as corporations are artificial legal persons with perpetual life and succession. Perpetual debt has to never be repaid by a specified date. The issuer of the bond has an