HDFC Bank: RBI denies Bank's plea to classify old HDFC Bonds as infrastructure debt, HDFC share price opens in green

livemint.com:

₹1 lakh crore issued by the erstwhile HDFC Ltd as infrastructure bonds, according to a report by Economic Times. Infra classification would have granted regulatory relaxations to the country's largest private sector bank. The stocks of HDFC Bank were trading in green at ₹1444.35, up 0.93 per cent on March 21, at 9:54 am on BSE.

The stocks of the bank is around 17 per cent down from its 52-week high of ₹1,757.80. The bank enjoys a market capitalisation of ₹10,97,142.48 crore. Livemint could not independently verify this news. The central bank communicated to HDFC Bank that there exists a technical obstacle in granting the infrastructure tag to bonds issued by the former HDFC Ltd.

As those were issued by a non-banking finance company (NBFC), and norms for treatment of bonds differ for banks and NBFCs, the report added. HDFC Ltd had issued the bonds in question before its merger with HDFC Bank, which took effect in July 2023. Last year, HDFC Bank sought the RBI's approval to classify debt instruments with maturities ranging from seven to ten years as infrastructure bonds.

The erstwhile housing finance company had around ₹1.2 lakh crore worth of bonds classified as infrastructure finance instruments. An infrastructure tag would have provided relief to HDFC Bank on cash reserve ratio (CRR) and statutory liquidity ratio (SLR) requirements against such debt, as per the report. CRR is a percentage of deposits that banks are mandated to maintain with the RBI in cash.