Banks permitted to raise long-term funds

The central bank has decided to allow banks to raise long-term resources from the market.

"Banks are now permitted to issue long-term subordinated debt in the nature of unsecured redeemable bonds that qualify for inclusion in Tier-II capital."

"Apart from raising resources through Tier-II capital bonds, and in order to realign portfolios from the asset-liability management angle and to honour long-term commitments, banks will now be allowed to raise long-term resources from the market which are not in the nature of subordinated debt."

"A suitable policy guidelines for banks in this regard will be worked out in consultation with them," the statement added.