Dharmadhi Bank wants to issue Perpetual Non-Cumulative Preference Shares. Can a bank issue such instruments ?

Regulation 3 of the SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013 (NCRPS Regulations) extends the applicability of Regulations to issue and listing of Perpetual Non-Cumulative Preference Shares and Perpetual Debt Instrument, issued by banks on private placement basis in compliance with Guidelines issued by Reserve Bank of India. The provisions of Chapter VI of SEBI NCRPS Regulations may, apply to the issuance and listing of Perpetual Non-Cumulative Preference Shares and Innovative Perpetual Debt Instruments by Banks. No issuer other than a Bank shall issue these instruments. RBI guidelines allow banks to raise capital by issue of non-equity instruments such as Perpetual Non-Cumulative Preference Shares and Innovative Perpetual Debt Instruments. These instruments need to be in compliance with the specified criteria for inclusion in Additional Tier I Capital. A Bank may issue such instruments subject to the prior approval and in compliance with the Guidelines issued by Reserve Bank of India: If a bank is incorporated as a company under Companies Act, 1956/2013, it shall, in addition, comply with the provisions of Companies Act, 2013 and/or other applicable statues. The bank shall comply with the terms and conditions as may be specified by the Board from time to time and shall make adequate disclosures in the offer document regarding the features of these instruments and relevant risk factors and if such instruments are listed, shall comply with the listing requirements. Accordingly, Dharmadhi Bank can issue perpetual non-convertible preference shares subject to fulfilment of the conditions as stated above.