{"id":30767,"date":"2018-10-26T18:08:58","date_gmt":"2018-10-26T12:38:58","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=30767"},"modified":"2018-10-26T18:08:58","modified_gmt":"2018-10-26T12:38:58","slug":"banks-face-rs-20000-cr-bond-losses-report","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/banks-face-rs-20000-cr-bond-losses-report\/","title":{"rendered":"Banks face Rs. 20,000 cr. bond losses: report"},"content":{"rendered":"<p><a href=\"http:\/\/www.thehindu.com\/todays-paper\/tp-business\/banks-face-rs-20000-cr-bond-losses-report\/article22972448.ece\"><b>Banks face Rs. 20,000 cr. bond losses: report<\/b><\/a><\/p>\n<p><b>Context:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Indian bank are starting at Rs 20,000 crore losses in the bond portfolio in the January-March quarter, which is three times more than the losses incurred in the Oct-Dec quarter.<\/span><\/li>\n<\/ul>\n<p><b>Highlight from the report:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">As per the Credit Suisse(Swiss multinational financial services holding company, headquartered in Z\u00fcrich), banks were having huge liquidity after demonetization.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Banks hold 10% more bonds than what is mandated.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Banks are required to hold 19.5% of their deposits in government papers.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Rising bond losses will add to concerns on the adequacy of the recap plan.<\/span><\/li>\n<\/ul>\n<p><b>RBI intervention:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">As per the report, RBI intervention by either raising \u00a0the HTM (held to maturity) threshold or buyback of treasures are needed to help contain the MTM(mark-to market) hit for the bank.<\/span><\/li>\n<\/ul>\n<p><b>What is held-to maturity security?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A held-to-maturity security is purchased with the intention of holding the investment to maturity.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">This type of security is reported at amortized cost on a company&#8217;s financial statements <\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"> \u00a0<\/span><span style=\"font-weight: 400;\">It is \u00a0usually in the form of a debt security with a specific maturity date<\/span><\/li>\n<\/ul>\n<p><b>What is Mark to market?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Mark to market is an accounting practice that involves recording the value of an asset to reflect its current market levels.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"> At the end of the fiscal year, a company&#8217;s annual financial statements must reflect the current market value of its accounts.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Banks face Rs. 20,000 cr. bond losses: report Context: Indian bank are starting at Rs 20,000 crore losses in the bond portfolio in the January-March quarter, which is three times more than the losses incurred in the Oct-Dec quarter. Highlight from the report: As per the Credit Suisse(Swiss multinational financial services holding company, headquartered in&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/banks-face-rs-20000-cr-bond-losses-report\/\">Continue reading <span class=\"screen-reader-text\">Banks face Rs. 20,000 cr. bond losses: report<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-30767","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704659379},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/30767","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=30767"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/30767\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=30767"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=30767"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=30767"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}