RBI unlikely to cut upper limit of HTM portfolios of banks

The Reserve Bank of India (RBI) is likely to keep the upper limit on held-to-maturity (HTM) portfolios of banks unchanged, at least in the near term. Though RBI had earlier said the HTM limit was high, reducing it might hit the profitability of banks. It would also lead to hurdles for the government’s borrowing programme. Asked whether the HTM limit would be reduced, RBI Deputy Governor H R Khan told Business Standard, “We are working on it, but it is very difficult to give a timeframe for that. We have to balance so many things. We cannot suddenly de-stabilise the whole thing. Banks are already under pressure and government borrowing continues to be very high.”.........

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