The Hindu Business Line — Markets

Banks Snap up Bonds as Holdings Approach Regulatory Floor

Indian banks are accelerating purchases of government bonds as their sovereign‑debt holdings edge toward the RBI’s 18% regulatory minimum. In February, state‑owned lenders bought a net ₹225.8 billion ($2.5 billion), the largest monthly purchase recorded since Bloomberg began tracking in 2006. Their holdings have slipped to 27% of deposits, down from 30% a year earlier, prompting a rebound in demand that has already nudged the 10‑year yield lower. Treasury officials expect the renewed buying to shave another 10‑15 basis points off yields.