Reserve Bank of India (RBI) has asked public sector banks under its prompt corrective action (PCA) to retire high cost debt like additional tier 1 (AT1) capital. Banks, which have sold AT1 bonds worth Rs87,195 crore, would receive funds from Government of India soon and will have to extinguish debt well before maturity or even the stipulated call option. The move is part of the austerity measure to restore commercial viability for banks under RBI's PCA like Allahabad Bank, Bank of Maharashtra, Corporation Bank, Dena Bank, Indian Overseas Bank and UCO Bank.
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