State Bank of India is seeking RBI nod  to mark-to-market only 25% of Rs 9996 crore of government bonds. SBI can sell only 25% of government given bonds in Q1. It may sell balance 75% of bonds in tranches in subsequent quarters. SBI is hoping to hear from RBI this week on extent of MTM.

After ICICI Bank, the State Bank of India (SBI) has also had exposure to bond portfolios that could be marked down severely for the company’s balance sheet and impact their profitability. It’s come out in the open now and the management is giving a clarification.

SP Tulsian of sptulsian.com said, "This was expected because this is very usual - whenever you see the interest rates hardening, banks always carry government securities in their portfolio on which the yield drops and in that event they have to provide for the mark-to market (MTM) losses either held on the MTM basis or Yield-To-Maturity (YTM) basis. So this was expected, but only the quantum was deferring. So probably now SBI is trying to take help from the Reserve Bank of India (RBI) by deferring this provision maybe in 3-4 tranches with one tranche of 25% getting booked in Q1. So this was nothing unusual, this was very much expected, this was referring the quantum of the government bonds held by the SBI and the losses on that account."

This information is source-based and has not been provided to the stock exchanges.