SLR investments are central government bonds managed by RBI. Non-SLR investments are investments in commercial papers (CPs), stocks, bonds and MFs. Such investments earn more returns than government bonds. While non-SLR exposure earns 100 basis points higher than the comparable sovereign bonds, stock market investments could yield a bonanza if there is rally in equities market, experts say.
However, banks have to set aside more capital as against SLR securities depending on the risk profile of the product they are investing in
Indian government bond yields experienced a decrease due to value buying and a decline in U.S. bond yields, as traders anticipate a bond buyback and the release of domestic inflation data. The Reserve Bank of India’s shift to a neutral stance disappointed investors, signaling limited potential for further rate cuts.
