India central bank raises overseas perpetual debt limit for banks

MUMBAI, Sept 30 (Reuters) – The Indian central bank has raised the limit for perpetual debt that banks can raise overseas and use as part of their core capital, according to a circular late on Monday. Perpetual debt is debt that does not have a maturity date. Perpetual debt issued in foreign currency or in Indian rupees overseas will be eligible for inclusion in banks' additional tier-1 capital of up to 1.5% of risk weighted assets, the RBI said. Additional tier-1 capital is the core capital of lenders. Earlier, the RBI had set the limit for such perpetual debt in bank capital at 1.5% of risk assets but said that less than half of this can be raised in foreign currency or in rupees overseas. (Reporting by Ira Dugal; Editing by Sonia Cheema)

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