RBI: State Bank Guarantee To Tata Motors Debt Issue Will Hold
May 31 2009 - 11:26PM
Dow Jones News
The guarantee provided by State Bank of India (500112.BY) to
Tata Motors Ltd.'s (500570.BY) INR42 billion bond issue will
continue to be in place, a spokeswoman of the central bank said
Monday.
Last month, Tata Motors had raised INR42 billion through an
issue of non-convertible debentures guaranteed by State Bank of
India, the country's largest bank by assets.
The Reserve Bank of India, in a circular dated May 29, asked
banks not to provide guarantees to corporate bonds.
"The SBI didn't interpret our guidelines correctly. The issue is
already concluded now and investors have put in their money," the
spokeswoman told Dow Jones Newswires.
Under existing guidelines, banks can guarantee only loans
extended to companies.
-By Harsh Joshi, Dow Jones Newswires; 91-22-6145-6115;
harsh.joshi@dowjones.com