RBI tightens Tier I,II bond issue norms

The Reserve Bank of India,on Friday said banks would not be allowed to issue Tier I or Tier II bonds with an option of offering higher coupon after some years,known as “step-up option”. The change is in line with the new definition of regulatory capital under the Basel Committee on Banking Supervision,the Reserve Bank of India (RBI) said in a statement on its website. “Such instruments can be issued with only ‘call option’…,” the RBI said.