ICICI Bank slapped with Rs 589-mn fine for selling bonds from HTM category

The banking regulator has imposed this fine of the lender for selling paper in the HTM category ahead of maturity, in violation of rules

ICICI Bank was on Thursday slapped with a Rs 589-million penalty by the Reserve Bank of India (RBI) for selling bonds from the lender's Held To Maturity (HTM) category.

Bonds in the HTM category are kept for redemption at the end of maturity and are not for the purpose of trading. 

Therefore, these bonds don’t attract 'Mark to Market' losses (MTM), which is a practice of valuing bonds at their prevailing market rates and not at historical prices.

There are other two portfolios in bonds —Available for Sales (AFS) and Held for trading (HFT) that are used for trading purpose