UDAY Scheme for Discoms

RBI moves to boost bonds issued by states under UDAY

  1. Context: State govts that have signed up for the UDAY scheme have started issuing bonds to banks
  2. News: RBI has allowed banks to classify bonds issued by state govts as part of the UDAY scheme under held-to-maturity (HTM) category
  3. Impact: The remaining discom loans would attract lower provisioning for banks now, as they would be classified as standard
  4. Banks that have the highest exposure to discoms will benefit the most
  1. Context: State govts that have signed up for the UDAY scheme have started issuing bonds to banks
  2. News: RBI has allowed banks to classify bonds issued by state govts as part of the UDAY scheme under held-to-maturity (HTM) category
  3. Impact: The remaining discom loans would attract lower provisioning for banks now, as they would be classified as standard
  4. Banks that have the highest exposure to discoms will benefit the most
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