perpetual bonds are also known as Additional Tier 1 Bonds. AT1 bonds are issued by Banks & NBFCs that do not have any specified maturity date. Banks issue AT1 bonds to meet their capital adequacy requirement in case of financial crisis. They can be redeemed by issuers, usually after five years or ten years by exercising the call option. The issuer may call or redeem the bonds if they can refinance the issue at a cheaper rate, especially when interest rates are declining. They also have the option to keep paying you interest or skip and extend the tenure of bond.
issuers can skip paying interest or principal if the capital adequacy ratio falls below a certain threshold to protect themselves from any systemic risk. Issuers try to keep their capital adequacy ratio above this regulatory limit. Some of the major issuers in India are State Bank of India, Bank of Baroda, Punjab National Bank, HDFC Bank, HDFC Limited.