The Department of Financial Services (DFS), under the finance ministry, has purportedly sent a memorandum to the chairman of the Securities and Exchange Board of India (Sebi) asking the regulator to withdraw a rule treating AT1 bonds (perpetuals) as having 100-year maturity. The memorandum was sent on Thursday.
A circular on the AT1 bonds was issued by Sebi on 10 March and the rule was to take effect from 1 April. However, it had generated significant apprehension in the mutual fund industry that losses would result from a consequential revaluation of such bonds. A representation to withdraw this provision was made by industry body AMFI to Sebi on Thursday itself.
