The Securities and Exchange Board of India (Sebi) has extended the compliance requirement to three years for large corporates to raise at least 25 per cent of their incremental borrowings through debt securities.

In 2018-19, the market regulator had said that listed large corporates with borrowings of Rs 100 crore or more and with credit ratings of AA and above would have to borrow 25 per cent or more of the incremental borrowings through bonds.

It had allowed them to meet the norm in a contiguous block of two years. The companies were to meet the criteria beginning 2019-20.

It had said that from 2021-22, the requirement of 25 per cent of incremental borrowing through bond market shall be tested for contiguous blocks of two years — 2021-22 and 2022-23 — wherein they will be treated as one block and the requirement of 25 per cent borrowing through bond market shall be complied for the sum of incremental borrowings made across the period of the block.

The regulator had added that at the end of the block if there is any deficiency in the requisite bond borrowing, a monetary penalty of 0.2-0.3 per cent of the shortfall shall be levied. This contiguous block of two years has now been made three years. It comes after the board of Sebi approved a proposal on Wednesday.