Easier bond market rules for FPI cheer public-sector bank stocks

Bond yields could slip, easing mark-to-market provisioning pain for banks; housing finance companies can access foreign borrowings

Public-sector banks' (PSBs) stocks were up on Monday, after the Reserve Bank of India (RBI) eased rules for foreign portfolio investors (FPI) to invest in government and corporate debt, late last week. The move, whch is the second by the regulator in less than two months, will help the bad loan-hit public-sector banks (PSBs) by easing their mark-to-market provisioning pain. After giving a leeway to PSBs to spread mark-to-market provisions from the October-December 2017 quarter equally in four quarters, the regulator liberalised some rules for investments by FPIs in the debt market, which would help push down bond yields.

While the