RBI guidelines on issue of long term infrastrucure tbonds by Banks

Key points of RBI guidelines on issue of long term bonds released on July 15, 2014:

1. Banks can issue long-term bonds with a minimum maturity of 7 years to raise resources for lending to (i) long term projects in infrastructure sub-sectors, and (ii) affordable housing. Housing loans upto Rs. 50 lakhs for houses of values upto Rs. 65 lakhs in six metropolitan cities and up to Rs. 40 lakh for houses of values upto Rs. 50 lakhsin other centres have been included under this.

2. The bonds shall be fully paid, redeemable and unsecured and would rank pari-passu along with other uninsured, unsecured creditors. The RBI, however has specified that the long term bonds must be plain vanilla in forms and cannot have a call or put option

3. These bonds will be exempted from computation of net demand and time liabilities (NDTL) and would therefore not be subjected to CRR/SLR requirements. Eligible bonds will also get exemption in computation of Adjusted Net Bank Credit (ANBC) for the purpose of Priority Sector Lending (PSL)

4. The bonds may be issued with a fixed or floating rate of interest. The floating rate of interest shall be referenced to market determined benchmark rates

5. The bonds may be issued through a public issue or private placement in full compliance with SEBI guidelines / norms including mandatory rating and listing. 

Issuance of long term bonds by banks for financing infrastructure project loans and affordable housing
http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=9103&Mode=0


Flexible structuring and refinancing of new project loans to infrastructure and core sector
http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=9101&Mode=0