Don't run to the RBI: Banks should manage treasury portfolios by themselves

Over the past six months, the Indian bond market has seen a great deal of action. In the quarter ending December 2017 the 10-year government security (the G-sec) yield, which is generally used as a benchmark, has gone up by 67 basis points. The yield curve has steepened sharply; and banks fear the spike in bond yields has caused profits to decline equally sharply. This has, predictably, led to demands for relief from banks. The banking regulator, the Reserve Bank of India, is the first port of call under such circumstances. Recently, RBI Deputy Governor Viral Acharya revealed that banks