Photo: AFPMumbai: The government may not directly issue recapitalisation bonds to avoid breaching its fiscal deficit target, said analysts. In India, recapitalisation bonds are off balance sheet items and are not part of fiscal deficit. Out of the total commitment, Rs1.35 trillion will come from the sale of so-called recapitalisation bonds. Banking experts do not rule out the possibility of recapitalisation bonds being issued as inter-bank bonds where one PSB issues the bonds to another PSB. In subsequent years, however, the interest on these bonds will directly impact the fiscal deficit, although this impact is likely to be very second-order.

Source: Mint October 25, 2017 06:35 UTC