2022
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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4.5%
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7.75%
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6.83%
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9.65%
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Detailed explanation-1: -SBI already raised over Rs 10,800 crore in debt capital – tier I bonds (Rs 6,872 crore) and tier II bonds (Rs 4,000 crore) – in September 2022. It issued AT1 bonds at a cut-off of 7.75 per cent.
Detailed explanation-2: -AT1 bonds are unsecured bonds that have perpetual tenor. In other words, these bonds, issued by banks, have no maturity date. They have a call option, which can be used by the banks to buy these bonds back from investors. These bonds are typically used by banks to bolster their core or tier-1 capital.
Detailed explanation-3: -BENGALURU, Dec 14 (Reuters) - State Bank of India (SBI.
Detailed explanation-4: -What are AT1 Bonds? Additional Tier 1 (AT1) bonds are a type of perpetual bonds. Banks use these bonds to increase their core equity base. Mutual funds are the major holders of perpetual debt instruments (AT1 Bonds), accounting for roughly INR 35,000 crore of the INR 90,000 crore in outstanding.
Detailed explanation-5: -AT1 bonds, short for Additional Tier 1 bonds, are a class of bonds issued by banks. After the global financial crisis of 2007-08, it was felt that banks ought to operate with a higher proportion of their own, permanent capital as opposed to borrowed capital. This permanent capital is termed as Tier 1 capital.