RBI and other regulators sleeping. Very sad state
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Frankly, the guy was sold AT-1 of Standard chartered and Credit Suisse bank by Bahrain branch of HDFC bank. Not sure why should RBI get involved at all.
That guy almost invested half a million dollar, and now he is saying he had no idea what he was investing into? This is plain stupid. At some point investors should also be responsible for their decision.
No point blaming RBI always.
No one knew of the risk of AT1 Bonds before the Yes Bank fiasco. Everyone went by the belief that Banks cannot fail, which to a certain extent is true. No one in their life, would have thought that AT1 Bonds could be written off whilst equity shareholders still got something - Yes Bank Saga
After the Yes bank saga, everyone became experts, now this gentlemen was approached by HDFC in 2021. Yes Bank saga took place in 2020. Every news paper had this mis selling of AT1 bond holders by yes bank RM. Was he not aware of this.
SEBI or RBI then put a restrictions on retail investor in India to invest in these Bonds. This was news too.
HDFC must have approached him and when the name of banks were told, I empathise, no one could even think that Credit Suisse or Standard Chartered Bank could fail. These were solid banks.
Since the Yes bank fiasaco, Indian banks raised Rs 82,370 crore in the calendar year 2022 via additional AT1 Bonds.
Institutional investors should have invested in these bonds knowing the risks. The point I am trying to make is that, Banks continue to issue these Bonds and investors continue to invest in these bonds.
State Bank of India’s board approved the fund-raising proposal to raise Rs 10,000 crore in FY24 via AT1 Bond. Will I invest I might if given an opportunity and if the coupon rate is higher than Bank FD.
Hence now, it is not right to say, the investor did not know the risk of AT1 Bonds. This is pure bad luck at play. I do not blame the investor as I would have done the same, if the name was Standard Chartered or CS.
I will repeat what I said last year, people investing quarter or half of million dollars through an offshore entity have no right to cry foul saying that we didn’t know what we were doing and bank mislead us.
If you are investing crores of rupees through such exotic routes, you should know the risks or face the consequences.
Anyone has a link to the complaint or court order?