Only around 20-30% of the deposits that banks raise are set aside for these type of investments. These bond investments show up in three ways in a bank's books. One, health for trading or HFT; Two, available for sale or AFS; Three, health to maturity or HTM. Because bonds can be sold at any given time, the value must be marked to market.
In today’s episode for 25th March 2023, we explain whether Indian banks are on solid ground or if we should fear a Silicon Valley Bank-type collapse.