The sharp rise in bond yields has hit banks with losses on treasury operations dominated by sovereign bond holdings. Even the yield on newly issued 10-year bonds that would mature in 2028 has inched up 27 basis points since January 5. Bankers have pleaded that the Reserve Bank of India allow them to stagger the reporting of these losses over several quarters. Just as banks need to be held accountable for their lending decisions and their advances, treasury operations and bond investments also need accountability and risk management systems. Any temporary measure, such as the request to stagger the recognition of bond losses, will only worsen it.

Source: The Hindu January 16, 2018 18:45 UTC