Indian banks will gravitate towards corporate bonds they intend to hold until maturity once new central bank rules kick in next month, as yields are currently elevated and the investments would be spared from market-linked markdowns, treasury officials said. From April 1, corporate bond investments will be allowed under held-to-maturity (HTM) category for the first time, provided the fair value is disclosed and investments protected from mark-to-market volatility, according to revised Reserve Bank of India rules.Currently banks can hold up to 23% of their deposits under HTM as investments in government bonds and state debt and this cap will be removed in April. The current yield spread…
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