- Banks issued Rs. 70,000 crore worth of gross bonds in FY22. The prior high point was Rs. 80,000 billion in FY17.
- As the credit-to-deposit (CD) ratio of the banking sector continues to firm up, bank gross bond issuances are predicted to reach Rs. 1.3-1.4 lakh crore by the end of FY23.
- Strong loan growth and limited liquidity are blamed for this record-high issuance of bank bonds.
- In FY23 (until December 16, 2022), the incremental credit expansion was Rs. 12.7 lakh crore, while deposit accretion remained behind at Rs. 8.9 lakh crore.
- The credit-deposit deficit expands to Rs. 5.7 lakh crore (after accounting for Cash Reserve Ratio (CRR)/CLR regulations) (as of December 2022).
- ICRA states that in addition to supporting lendable resources, debt capital instruments like Tier-I and Tier-II bonds are eligible for inclusion in capital ratios.
- Banks may also issue long-term infrastructure bonds to finance particular qualifying assets.
- Due to the longer period of these debt instruments, they also enhance the net stable financing ratio and the liquidity coverage ratio (LCR) (NSFR).
- To lessen the reliance of infrastructure developers on bank guarantees, Union Minister Nitin Gadkari, Ministry of Road Transport and Highways (MoRTH), announced India's first-ever "Surety Bond Insurance" product from Bajaj Allianz General Insurance Company in December 2022.
- Small Industries Development Bank of India (SIDBI):
- Chairman & Managing Director (CMD)– Sivasubramanian Ramann
- Establishment– 1990
- Headquarters– Lucknow, Uttar Pradesh
Question:
Q.1 Gross bond issuances by Indian banks hit a record of Rs. _______ in the first nine months (April to December) of the fiscal year 2022–23, according to ICRA.
a. 70,000 crore
b. 90,000 crore
c. 95,000 crore
d. 91,500 crore
a. 70,000 crore
b. 90,000 crore
c. 95,000 crore
d. 91,500 crore
