IRDAI has allowed insurers to invest up to.....in Additional Tier 1 (AT1) bonds, that are issued by banks to augment their tier 1 capital, in order to expand the pool of eligible investors for the banks.

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

IRDAI has allowed insurers to invest up to____in Additional Tier 1 (AT1) bonds, that are issued by banks to augment their tier 1 capital, in order to expand the pool of eligible investors for the banks.

A	25 per cent
B	30 per cent
C	20 per cent
D	10 per cent

Explanation:

Detailed explanation-1: -AT-1, short for Additional Tier-1 bonds, are a type of unsecured, perpetual bonds that banks issue to shore up their core capital base to meet the Basel-III norms.

Detailed explanation-2: -AT-1 bonds are regulated by the Reserve Bank of India (RBI).

Detailed explanation-3: -AT1 bonds are regulated by the Reserve Bank of India. RBI ensures that these bonds follow the Base III norms laid down by SEBI. It believes that AT1 bonds are riskier than debt instruments, so it has instructed to limit their ownership by 10% of the capital of the scheme.

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