Banks go slow on bond sales as rising interest rates push up costs

The decision to go slow on these fund-raising plans - despite the booming credit growth - came at a time when bond market conditions turned turbulent

Banks looking to raise capital via bond sales to fund decade-high credit growth were compelled to put some of these debt issuances on hold amid a sharp rise in yields since late September, sources told Business Standard.

A major private lender, Axis Bank, has not yet followed through with a planned issuance of infrastructure bonds worth around Rs 3,000 crore. This is because volatility in the bond market in late September led to investors seeking higher yields, sources said.

Bank issuances of additional tier-1 bonds also came to a grinding halt in October as the rates being demanded by investors