SEBI's New Rules for AT1 Bond Valuations, Explained

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?

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