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Government asks PSBs to share data on bond portfolios

March 24, 2023

Government asks PSBs to share data on bond portfolios
The government has asked a clutch of major public sector banks (PSBs), including the country’s largest lender by assets, State Bank of India (SBI), to furnish data on bond investment portfolios in the wake of the ongoing US banking crisis. Apart from SBI, the government has asked for data from Punjab National Bank (PNB), and Bank of Baroda (BoB), said people familiar with the development.

“The government has asked only major banks such as SBI, PNB, and BoB to submit data on their respective bond portfolios to check their status. It is also obvious that the government will not seek this information from banks that have small portfolios. These include Bank of Maharashtra, Punjab and Sindh, etc,” told a source to Moneycontrol.
 
The move assumes significance as sharp value erosion in the bond portfolios of banks like Silicon Valley Bank (SVB) in long-term securities had caused the crisis in the US, which led to the collapse of at least three regional banks in the US.
 
“But in India, there’s a limit on bonds for availability and selling. This is the main reason we will not face the United States-like crisis in India. So, the FM has simply asked the details of bonds from the Indian public sector banks for caution,” one of the persons quoted above said.

This directive has come ahead of the scheduled meeting between finance ministry and public sector lenders on March 25 to take stock of the industry growth. 
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