India’s banking industry has been on edge the past two weeks.
The apprehensions stemmed from a March 10th SEBI circular which directed mutual funds to price Additional Tier-1 (AT1) bonds using 100-year valuation norms.
On Monday, SEBI relaxed the timeline for the implementation of these rules, providing the market with a breather.
But what exactly are AT1 bonds? How are they different from other bonds? And why did SEBI's recent circular on these bonds raise a storm?