New Student User - Use Code HELLO

Register Now

Bank Bond Issuances Reach a Record of Rs. 91,500 Crore: ICRA Report

Published on January 11, 2023
Current Context: Gross bond issuances by Indian banks hit a record of Rs. 91,500 crores in the first nine months (April to December) of the fiscal year 2022–23, according to a study from credit rating agency ICRA Limited (previously Investment Information and Credit Rating Agency of India Limited) (FY23).
Bank Bond Issuances Reach a Record of Rs. 91,500 Crore: ICRA Report
  • 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

Can I help you?

ramandeep singh

Hey I am Ramandeep Singh. I am determined to help students preparing for RBI, SEBI, NABARD and IBPS exams. Do you want me to help you ?

Join my class here
    Follow me:
Close Menu
Close Menu