Affluence Advisory
Quick Summary
Introduction With the recent changes given by the regulators on the Fixed Income side with reference to Banks, this article is an impact study of the same on the FI portfolio. The entire portfolio is classified into the three segments as has been historically: HTM (Held Till Maturity):Banks
Daily Limit Reached
You have reached your daily limit of 2 Free Articles
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Broadcasts
- Daily E-Newsletter
- Unlimited Articles Access
BEST VALUE
2 YEAR PLAN
3,499
(Inclusive of GST)
1 YEAR PLAN
1,999
(Inclusive of GST)
View all CCI PRO benfits
Already a PRO member? Login here for an ad-free experience.
FAQ :
The main segments are Held Till Maturity (HTM), Available For Sale (AFS), and Held For Trading (HFT).
The previous limit of 23% of Net Demand and Time Liability for the HTM category has been reversed, and corporate bonds can now be included in this category.
The HFT portfolio must be valued at fair value, with premiums and discounts amortised. Both market-to-market gains and losses can now be recognised directly in the Profit and Loss account.
For AFS portfolios, banks must create an AFS reserve in the Capital Account, and market-to-market gains or losses will be adjusted against this reserve, meaning they won't impact the Profit and Loss account.
Since corporate bonds can now be held in the HTM category, their demand may increase as they offer additional returns if held to maturity.
After FY 2026, banks will be required to disclose both the book value and the fair value of their entire fixed income portfolio.
CAclubindia
