New Delhi, Nov. 17 -- Nomura Holdings, a leading global investment bank, is investigating its India fixed-income operations amid concerns that reported profits in its rates division may have been inflated in recent years.

The review is being conducted by the bank's compliance department and focuses specifically on how trades in Strips were valued, a Bloomberg report stated.

Strips, short for Separate Trading of Registered Interest and Principal of Securities, are bonds in which the principal and coupon (interest) payments are separated. Investors can buy and sell these components individually rather than as a single bond.

Strips have gained popularity among insurance companies because they allow cash flows to be structured in a way tha...