Tag: rbi

MARKET UPDATE: Sensex gained over 50 points to trade around 63,228 levels, whereas Nifty50 traded marginally above 18,700 levels

MARKET UPDATE: Sensex gained over 50 points to trade around 63,228 levels, whereas Nifty50 traded marginally above 18,700 levels
Thursday, June 8, 2023
Opening Bell: Indian markets started on a positive note today( 8 June 2023), ahead of the Reserve Bank of India's (RBI) monetary policy decision. Frontline indices the S&P BSE Sensex gained over 50 points to trade around 63,228 levels, whereas Nifty50 traded marginally above 18,700 levels. Broader markets, however, outperformed benchmark indices as Nifty Midcap 100, and Nifty Smallcap 100 indices surged up to 0.3 percent. Read more

MARKET UPDATE: Sensex slipped over 100 points to trade around 59,574 levels, whereas Nifty50 index traded flat below 17,550 levels

MARKET UPDATE: Sensex slipped over 100 points to trade around 59,574 levels, whereas Nifty50 index traded flat below 17,550 levels
Thursday, April 6, 2023
Indian markets were flat in today's(6 April 2023) trade, ahead of the Reserve Bank of India's (RBI) monetary policy decision. While the Nifty50 index traded flat below 17,550 levels, the S&P BSE Sensex slipped over 100 points to trade around 59,574 levels. Broader markets, too, fell in tandem as Nifty Smallcap 100 and Nifty Midcap 100 indices skid up to 0.2 percent. Read more

MARKET UPDATE: Sensex shed over 200 points to trade at 56,200 levels, while Nifty50 declined over 40 points to trade below 17,800 levels

MARKET UPDATE: Sensex shed over 200 points to trade at 56,200 levels, while Nifty50 declined over 40 points to trade below 17,800 levels
Friday, September 30, 2022
Opening Bell: Indian equity markets edged lower in today's(30 September 2022) trade ahead of the Reserve Bank of India's (RBI) interest rate stance post their 3-day monetary policy committee meeting. Experts expect the central bank to raise interest rates up to 50 basis points. Key indices Nifty50 declined over 40 points to trade below 17,800 levels and the S&P BSE Sensex shed over 200 points to trade at 56,200 levels. The broader markets, too, lost steam as Nifty MidCap 100 and Nifty SmallCap 100 dropped over 0.1 percent each. Reduced risk appetite coupled with rate hike fears brought volatility across sectoral pockets. Nifty Metal and Nifty Pharma indices held up with marginal gains, whereas Nifty Realty, Nifty Bank, and Nifty Auto indices were beaten down in trade. Read more

Will MPC raise repo rate 35-50 bps?

Will MPC raise repo rate 35-50 bps?
Monday, September 19, 2022
A heightened pace of policy tightening by central banks in advanced economies is increasing pressure on the RBI to continue front-loading rate hikes in order to maintain adequate interest rate differentials, analysts opined. Also, many financial experts expect the RBI to lower the GDP growth estimate to 7%. The Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) is likely to lift the policy repo rate by 35-50 basis points (bps) on September 30, as it seeks to bring back elevated domestic inflation within its target range.

MARKET UPDATE:Sensex climbed over 200 points to trade at 58,517 levels and Nifty50 rose 40 points to trade above 17,400 levels

MARKET UPDATE:Sensex climbed over 200 points to trade at 58,517 levels and Nifty50 rose 40 points to trade above 17,400 levels
Friday, August 5, 2022
The Indian equity markets steered in a positive direction after the Reserve Bank of India (RBI) hiked repo rates by 50 basis points (bps) to 5.4 percent. With this rate-hike cycle, the Indian central bank has raised interest rates by 140 bps so far. Frontline indices like Nifty50 rose 40 points to trade above 17,400 levels, whereas the S&P BSE Sensex climbed over 200 points to trade at 58,517 levels. Rate-sensitive sectors like Nifty Bank and Nifty Realty gain up to 0.4 percent. Nifty Auto, however, was down 0.1 percent in trade.

India's services activity touches an eleven-year high of 59.2 in June

India's services activity touches an eleven-year high of 59.2 in June
Tuesday, July 5, 2022
In June 2022 India’s services activity expanded at the fastest pace in eleven years. Rising from 58.9 in May to 59.2 in June, the seasonally adjusted S&P Global India Services PMI Business Activity Index was at its highest mark since April 2011. The June data pointed to further accelerations in new business growth and output at Indian services companies amid ongoing improvements in demand conditions. Although firms expect the recovery to be sustained over the coming 12 months, concerns surrounding price pressures restricted business confidence. Input costs continued to rise at a historically elevated pace, although one that was the slowest in three months, while charge inflation hit a near five-year high. Read more

World Bank cuts India's GDP forecast to 7.5% for FY23

World Bank cuts India's GDP forecast to 7.5% for FY23
Wednesday, June 8, 2022
The World Bank on Tuesday cut India's economic growth forecast for the current fiscal to 7.5% from 8 percent as rising inflation, supply chain disruptions and geopolitical tensions taper recovery. This is the second time that the World Bank has revised its GDP growth forecast for the country in the current fiscal. In April, it had cut the forecast from 8.7 percent to 8 percent and is now at 7.5 percent. "In India, growth is forecast to edge down to 7.5% in the fiscal year 2022/23, with headwinds from rising inflation, supply chain disruptions, and geopolitical tensions offsetting buoyancy in the recovery of services consumption from the pandemic," the World Bank said in its latest issue of the Global Economic Prospects. The World Bank said that growth will be supported by fixed investment undertaken by the private sector and by the government, which has introduced incentives and reforms to improve the business climate. Read more

RBI raises repo rate to 4.9%; GDP growth estimate for FY23 at 7.2

RBI raises repo rate to 4.9%; GDP growth estimate for FY23 at 7.2
Wednesday, June 8, 2022
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) today(8 June 20 22) raised the repo rate by 50 basis points to 4.9 percent (bps), citing inflation concerns. It has also decided to remain focused on the withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth. The committee has decided to retain the GDP growth estimate for FY23 at 7.2 percent, said RBI Governor Shaktikanta Das. On the assumption of a normal monsoon in 2022 and average crude oil price of $105 per barrel, inflation is projected at 6.7 percent in 2022-23, with Q1 at 7.5 percent; Q2 at 7.4 percent; Q3 at 6.2 percent; and Q4 at 5.8 percent, with risks evenly balanced. Read more

Closing Bell:Sensex tumbled to a low of 55,502, and ended 1,307 points lower at 55,669 and Nifty plunged 391 points to 16,678

Closing Bell:Sensex tumbled to a low of 55,502, and ended 1,307 points lower at 55,669 and Nifty plunged 391 points to 16,678
Wednesday, May 4, 2022
The Indian markets tanked heavily trades today(4 May 2022) after RBI announced a surprise repo rate hike in an unscheduled meeting. The markets, were, already on tenterhooks awaiting the US Federal Reserve meeting outcome later tonight, wherein a 50 bps rate hike is anticipated. In an unscheduled address, RBI Governor Shaktikanta Das announced that the monetary policy committee has unanimously voted to increase the repo rate by 40 bps to 4.40 percent, adding that the central bank's stance remains accommodative. RBI also raised the CRR limit by 50 bps to 4.5 percent with effect from May 21, which in turn will lead to a withdrawal of Rs 87,000 crore from the system, the governor added. Read more

RBI raises repo rate by 40 bps to 4.40 per cent

RBI raises repo rate by 40 bps to 4.40 per cent
Wednesday, May 4, 2022
RBI Governor Shaktikanta Das today(4 May 2022) said the Monetary Policy Committee (MPC) has unanimously voted to increase the repo rate by 40 basis points to 4.40 percent with immediate effect. The Governor said that the MPC has also decided to remain accommodative while focusing on withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth. Consequently, the standing deposit facility (SDF) rate stands adjusted to 4.15 percent and the marginal standing facility rate (MSF) to 4.65 percent. Read more

MARKET UPDATE:Sensex fell around 100 pts to 58,920 and Nifty largely flat to 17,630 levels

MARKET UPDATE:Sensex fell around 100 pts to 58,920 and Nifty largely flat to 17,630 levels
Friday, April 8, 2022
The Indian key benchmark indices gave up early gains today ( 8 April 2022)as the RBI kept the key repo rate unchanged, maintaining the status quo and its accommodative stance. The central bank, however, raised inflation projections for FY23 to 5.7 percent from 4.5 percent, while downgrading real GDP estimates to 7.2 percent from 7.4 percent. The BSE Sensex fell around 100 pts to 58,920 and the NSE Nifty was largely flat to 17,630 levels.

GOI may seek crypto log on transactions from banks, exchanges

GOI may seek crypto log on transactions from banks, exchanges
Thursday, March 24, 2022
As the government begins taxing gains from cryptocurrencies and non-fungible tokens from April the Indian tax authorities may tell banks and crypto exchanges to report transactions of virtual digital assets (VDAs). So far, the tax department has relied on voluntary disclosures on transactions of VDAs. Once implemented, the sale and purchase of digital assets will reflect in the Annual Information Statement (AIS). The move will ensure that the details about VDA-related transactions are available with the authorities on a real-time basis, and there would be lower chances of revenue leakage or their going unexamined. Read more

RBI lifted the restriction on the new digital business generating activities imposed on HDFC Bank

RBI lifted the restriction on the new digital business generating activities imposed on HDFC Bank
Saturday, March 12, 2022
The RBI has lifted the restrictions imposed on HDFC Bank regarding its business-generating activities planned under the Digital 2.0 programme, HDFC said today(12 March 2022). “We would like to inform one and all that the RBI has lifted the restriction on the business generating activities planned under the bank’s Digital 2.0 programme, vide its letter dated March 11, 2022," the bank said in a stock exchange filing. In December 2020, RBI had directed HDFC Bank to temporarily halt all digital launches as well as new sourcing of credit card customers, following various outages the bank faced due to technical glitches in the past two years. The RBI action came after the bank's customers faced a number of incidents of outages in internet banking, mobile banking, and payment utilities of the bank over the past two years.

Will 'Omicron' force RBI to delay policy normalisation?

Will 'Omicron' force RBI to delay policy normalisation?
Thursday, January 6, 2022
Many economists are expecting RBI to delay the policy normalisation move, which is expected in the February review since COVID-19 infections spike in the country resulting in restrictions in various states and impacting the fragile recovery. The country has reported a single-day rise of 58,097 new COVID-19 cases as of Wednesday morning-the highest in around 199 days- of which 2,135 are Omicron cases and later in the day, the first confirmed Omicron-related death has also been reported. The active cases were recorded above 2 lakh after around 81 days and the COVID toll has climbed to 4,82,551 with 534 daily fatalities. Read more

RBI leaves key interest rates unchanged;economy better prepared to deal with Covid, says RBI Governor

RBI leaves key interest rates unchanged;economy better prepared to deal with Covid, says RBI Governor
Wednesday, December 8, 2021
The Reserve Bank of India’s monetary policy committee (MPC) today(8th December 2021) maintained key interest rates for a ninth straight meeting, retaining an accommodative stance amid the threat surrounding the Omicron coronavirus variant. Repo and reverse repo rates remain unchanged at 4 percent and 3.35 percent, respectively, said RBI governor Shaktikanta Das in a statement after a three-day meeting of the committee in Mumbai. The central bank maintained its FY22 GDP forecast at 9.5 percent and projected retail inflation to be at 5.3 percent. "Indian economy hauled itself out of its deepest contraction; we are better prepared to deal with Covid-19,” said the RBI Governor. "Given the slack in the economy and the ongoing catching up of activity, especially of private consumption, which is still below its pre-pandemic levels, continued policy support is warranted for a durable and broad-based recovery," he said. Read more

MARKET UPDATE:Sensex up 642 points at 58,276 levels while the Nifty back above the 17,350-mark

MARKET UPDATE:Sensex up 642 points at 58,276 levels while the Nifty back above the 17,350-mark
Wednesday, December 8, 2021
The Indian benchmark indices started firm today(8th December 2021), ahead of the RBI's monetary policy outcome. The six-member monetary policy committee (MPC), headed by Governor Shaktikanta Das, is likely to maintain key interest rates for a ninth straight meeting, retaining an accommodative stance amid the threat surrounding the Omicron coronavirus variant. The S&P BSE Sensex was up 642 points, or 1.11 percent, at 58,276 levels in early deals while the Nifty50 index was back above the 17,350-mark. The 50-pack index gained 192 points or 1.12 percent. 49 of the 50 Nifty constituents were trading in the green, led by ONGC (up 2.5 percent), Infosys, Wipro, ICICI Bank, Reliance Industries, Indian Oil Corporation, and Bharti Airtel. The only loser was Divis Labs, down 0.15 percent. Read more

Indian stocks unlikely to recoup recent losses: Poll

Indian stocks unlikely to recoup recent losses: Poll
Wednesday, December 1, 2021
According to a Reuters poll of strategists, Indian equities will not recoup recent losses until after mid-2022 on worries over Coronavirus (COVID-19) resurgence and global monetary policy tightening. The report also predicted a likely correction in the next six months. Buoyed by easy monetary policy, a gradual re-opening of the economy, and a rapid vaccination drive, the benchmark BSE Sensex Index has rallied nearly 20% year-to-date. But the BSE index has dropped around 8% from its all-time high of 62,245.43 sets on Oct. 19 as concerns mount over the Omicron coronavirus variant, dampening investor sentiment further. The Nov. 16-30 Reuters poll of 35 equity strategists forecast the benchmark Sensex index to touch 60,450 by mid-2022, a gain of around 5.6% from Monday's close of 57,260.58. If realised, the gain would not be enough to recoup recent losses. However, the index was expected to rise further to hit a high of 63,000 by end-2022. Read more

LIC gets RBI's nod to increase stake in Kotak Mahindra Bank

LIC gets RBI's nod to increase stake in Kotak Mahindra Bank
Monday, November 29, 2021
Private lender Kotak Mahindra Bank today ( November 29 )said that Life Insurance Corporation (LIC) has received approval from the Reserve Bank of India (RBI) to increase its stake in the Bank up to 9.99%. The approval is valid for a period of one year, the bank said. Currently, the life insurer holds 4.96 per cent in the private lender.As per RBI norms, prior approval of the RBI is required to increase stake in private banks beyond 5 per cent."We wish to inform you that Kotak Mahindra Bank Limited ("Bank") has received an intimation from Life Insurance Corporation of India ("LIC") stating that the Reserve Bank of India had granted its approval to UC, for increasing its holding in the Bank up to 9.99% of the paid up equity share capital of Bank," Kotak said in an exchange filing. LIC is one of the biggest institutional investors in India’s stock market and has stakes in a number of private and public sector banks. It also holds 49.24 per cent stake in IDBI Bank. Read more

A bill listed in winter session of Parliament seeking to ban all private cryptocurrencies

A bill listed in winter session of Parliament seeking to ban all private cryptocurrencies
Wednesday, November 24, 2021
In the upcoming winter session of Parliament, starting November 29, the government has listed a bill seeking to ban all private cryptocurrencies. This is among the 26 pieces of legislation, including the repeal of three farm laws, listed for the session. The price of Bitcoin was down sharply from Rs 46 lakh to Rs 40 lakh in just about 90 minutes after this news came in. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, seeks to “prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” according to the list of businesses for the winter session of Parliament. Read more

India's Oct WPI accelerates to 5-month high of 12.54%

India's Oct WPI accelerates to 5-month high of 12.54%
Monday, November 15, 2021
Annual wholesale price-based inflation in India accelerated in October to a five-month high, pushed up by increases in fuel and manufacturing prices, fuelling concerns of rising inflationary pressures for firms. The gap between retail and wholesale price-based inflation has widened in recent months as many companies and retailers are still trying to absorb galloping input costs that threaten to hit their bottom lines. Annual wholesale price-based inflation in October rose to 12.54% from the previous month's 10.66%, remaining in double-digits for the seventh month in a row, government data showed on Monday. Consumer prices based on inflation, the main gauge monitored by the monetary policy committee of the Reserve Bank of India, rose 4.48% in October from the same month last year, speeding up from September's 4.35%, separate data released on Friday showed. Read more

GDP to clip at 9.5% as growth impulses strong: RBI Governor

GDP to clip at 9.5% as growth impulses strong: RBI Governor
Thursday, November 11, 2021
Reserve Bank Governor Shaktikanta Das yesterday(10th Nov.2021) expressed confidence in the economy clipping at the projected 9.5 percent this fiscal as per the growth impulses and the strong fast-moving indicators. Giving all the credit for the faster-than-expected recovery of the economy to the government, Das said the central bank has only been supporting the government in reviving the economy ravaged by the pandemic. Citing a slew of measures the government has taken since the pandemic struck in March 2020, the governor specifically mentioned tax cuts on fuels, tax resolution for the telecom sector, annulling of the retro tax legislation, sale of Air India, plans to sell some of the public sector banks and PLI scheme as the major reforms and growth-drivers bearing fruits now. Read more

Extension given to Mr. Shaktikanta Das, RBI governor, is good for the markets

Extension given to Mr. Shaktikanta Das, RBI governor, is good for the markets
Friday, October 29, 2021
According to expert economists, the extension given to Mr. Shaktikanta Das, the governor of the Reserve Bank of India (RBI) is good news for the market, as the economy is in the preparation mode for a takeoff. The government has quite rightly made the announcement before the term came to an end so that there is certainty on all sides. From a market perspective, this means that the mindset of the Governor is known and there will be no surprises. While it is true that institutions are more important than the person, the ideology and approach of Governors of central banks are important. Mr. Das has followed a very cogent approach of patiently hearing out the market before taking any decision, which has been a strength. There have hence been some major achievements under his first term, which has helped the economy and market. Read more

The Indian economy is picking up leaving behind the shadow of the pandemic: RBI report

The Indian economy is picking up leaving behind the shadow of the pandemic: RBI report
Tuesday, October 19, 2021
The Indian economy is picking up leaving behind the shadow of the pandemic as consumer demand improves and supply constraints ease due to strong Kharif agricultural production and revival in manufacturing and services. Also, softer food prices are aligning headline inflation closer to the target of 5.3 percent for FY'22. "The green shoots of revival have spilled out of the high-frequency indicators and on to the headline metrics in a recovery that is progressively solidifying," the report said. RBI's Economic Activity Index (EIA) indicates that real GDP grew by 9.6 percent in July-September 2021

MARKET UPDATE:Sensex drops 100 points, Nifty at 17,875

MARKET UPDATE:Sensex drops 100 points, Nifty at 17,875
Monday, October 11, 2021
The renewed strength in the equity market, which got a boost from the Reserve Bank of India (RBI) persisting with its accommodative monetary policy on Friday,8th October, could push the Nifty past the 18,000-mark in the days ahead. While investors will shift focus to September quarter earnings season starting this week, analysts warn that disappointments could take the wind out of their sails as stronger profits are seen as imperative to justify elevated share valuations. On 8th October (Friday), the Sensex reclaimed the 60,000 and the Nifty ended 0.6% shy of 18,000,though the market gave up a portion of early gains sparked by the Indian central bank's continued monetary support. Both indices had gained 2% last week, shrugging off global concerns over the likelihood of persistent high inflation, which is putting upward pressure on US bond yields.

RBI’s no change policy hints at rate hike ahead

RBI’s no change policy hints at rate hike ahead
Friday, October 8, 2021
Analysts across the spectrum lauded the Reserve Bank of India's money policy, as they believe a 'wait and watch' approach is appropriate for the time being. RBI kept all policy rates unchanged to bolster a fragile economic recovery and reiterated an accommodative stance to back sufficient liquidity and keep borrowing costs low for both the state and companies to help drive investments. Analysts, though, saw some signs of tightening ahead in Shaktikanta Das’ speech. “RBI signalled the beginning of gradual 'tapering'of liquidity by extending VRR auction tenor, a measure widely expected by markets. While RBI has refrained from committing any GSAP amount to support bond yields, its emphasis on an ‘orderly evolution of the yield curve’ should provide comfort to the bond market,” said Churchil Bhatt, EVP Debt Investments, Kotak Mahindra Life Insurance. Read more

Economic recovery or not, most of the macro indicators are trending upwards

Economic recovery or not, most of the macro indicators are trending upwards
Monday, October 4, 2021
The RBI’s monetary policy review is due on October 6. WPI inflation rose in August 2021 to 11.4 percent, from 11.2 percent the previous month. While that increase may seem marginal, it’s important to note that average WPI inflation in the last five months has been 11.6%. Retail inflation, at 5.3% in August, has not only spent two consecutive months below the RBI’s upper tolerance limit of 6%, but has also come down to below the level it was at before the second wave struck. Given the sheer amount of liquidity made available by the RBI over the last year and more, the fact that retail inflation is low while the Sensex has been scaling new heights suggests that investment activity so far has been restricted to equities rather than factories and that demand is still subdued. Read more

Centre initiates talks with RBI to kick-off bank privatisation process

Centre initiates talks with RBI to kick-off bank privatisation process
Tuesday, September 28, 2021
The government has initiated consultations with the Reserve Bank of India (RBI) to devise a new security clearance framework for screening potential bidders of public sector banks (PSBs) as it kick-starts the privatisation process, beginning with the strategic divestment of IDBI Bank. As the government is moving ahead with strategic divestment of IDBI Bank and is looking to privatise two PSBs, the Department of Investment and Public Asset Management (DIPAM) is looking to put in place an appropriate framework as the potential buyers will have to meet the RBI’s fit and proper criteria, according to an official. Read more

RBI deputy governor sees FY22 inflation at 5.7% or lower

RBI deputy governor sees FY22 inflation at 5.7% or lower
Thursday, September 16, 2021
The retail inflation fell to 5.3% in August and stayed within the Reserve Bank of India’s target range for two successive months. This could lead the RBI to revise the inflation projection for the current financial year. In the August review of monetary policy, RBI revised its inflation projection for the current financial year upward to 5.7% from 5.1% projected in the June policy review. Read more

Market rally would remain broad-based going ahead: Experts

Market rally would remain broad-based going ahead: Experts
Wednesday, September 15, 2021
Markets have been trading sideways ahead of the meetings of the two major global central banks – the US Federal Reserve and the Reserve Bank of India (RBI) – over the next couple of weeks. Market experts expect natural profit-taking to happen with rising markets, but do not see any meaningful correction unless there is a more aggressive taper stance by the US Fed. They are cautiously optimistic on markets for 2021, on surplus global liquidity, and benign interest rates. The US Federal Reserve (US Fed), prior to the pandemic, had an outstanding balance sheet size of $4.2 trillion as of December 2019, which doubled in size to $8.3 trillion. Likewise, the European Central Bank (ECB), which had a pre-pandemic balance sheet size of 4.7 trillion euros also saw a similar proportional increase in size to 8.2 trillion euros. This liquidity is providing support to asset inflation in high-risk asset classes, including emerging equities like India. Read more

Lifting of credit card ban may spark up to 32% rally in HDFC Bank

Lifting of credit card ban may spark up to 32% rally in HDFC Bank
Wednesday, August 18, 2021
The Reserve Bank of India has lifted the ban on the issue of new credit cards which may trigger an up to 32 percent rally in the HDFC Bank’s stock, according to analysts, as the lift has come ahead of the festive season, presenting an opportunity to capture market share. The HDFC Bank scrip surged 3 percent at Rs 1,564.75 on the BSE in intra-day trade today(18th August 2021) and was among the top gainers on the BSE barometer. In comparison, the S&P BSE Sensex was up 0.5 percent at 10:30 AM. Some analysts opine that the lender will be able to regain its lost market share of 180 bps or even more, as there is a large customer base to which it can cross-sell. Financially, the lifting of the ban will protect HDFC Bank's overall profitability as the credit card segment is the key earnings driver, says Motilal Oswal Financial Services.

RBI hints at normalising ultra-loose policy

RBI hints at normalising ultra-loose policy
Friday, August 6, 2021
The August review of the Reserve Bank of India’s bi-monthly monetary policy was interesting as: 1.) no unanimous voting on the policy stance 2.) more than expected revision in inflation forecast for FY22 and 3.) announcement of the variable rate reserve repo auction – an indication that the central bank has started the gradual withdrawal of the ultra-loose monetary policy that was in place since the onset of the Covid-19 pandemic. As expected, there was complete unanimity among all the six members of the monetary policy committee (MPC) to keep the interest rate unchanged at 4%. However, on maintaining the accommodative stance, five of the six members voted in favour. Professor Jayanth Verma disagreed. Read more

MARKET UPDATE: Sensex quoted at 54,600 levels, up 100 points and Nifty held 16,300-mark, up 7 points

MARKET UPDATE: Sensex quoted at 54,600 levels, up 100 points and Nifty held 16,300-mark, up 7 points
Friday, August 6, 2021
As the RBI kept the monetary policy rate unchanged at 4 percent and continued with the "accommodative" policy stance, the BSE Sensex quoted at 54,600 levels, up 100 points while the Nifty50 held 16,300-mark, up 7 points. Sectorally, all but IT and pharma stocks were in the green. The Nifty PSU Bank and Auto indices were the top gainers, up 0.6 percent each. More than 100 companies are slated to post their numbers on Friday including M&M, Voltas, Ujjivan SFB, Tata Power, Torrent Power, SAIL, Hindalco, Indigo Paints, BEML, and BEL. Further, on Saturday Divis Labs, Bank of Baroda, Dodla Dairy, Indiabulls Real Estate, and VRL Logistics will release quarterly earnings.

Young Indian investors rather put money in crypto than gold

Young Indian investors rather put money in crypto than gold
Monday, June 28, 2021
In India investments in crypto grew from about $200 million to nearly $40 billion in the past year, according to Chainalysis. That’s despite outright hostility toward the asset class from the central bank and a proposed trading ban. Indians now totaling more than 15 million are buying and selling digital coins. That’s catching up with the 23 million traders of these assets in the U.S. and compares with just 2.3 million in the U.K. The growth in India is coming from the 18-35-year-old cohort, says the co-founder of India’s first cryptocurrency exchange. Latest World Gold Council data indicated Indian adults under age 34 have less appetite for gold than older consumers.“They find it far easier to invest in crypto than gold because the process is very simple,” say experts. Read more

RBI holds back selling 10-yr bond

RBI holds back selling 10-yr bond
Friday, June 25, 2021
The RBI did not sell any of its planned Rs 14,000 crore of the benchmark 10-year bond on auction today(25th June 2021), which may indicate its discomfort in breaching the limit outstanding in the bond, and that a new 10-year bond could be coming any time soon, maybe in the next auction itself. The government has raised more than Rs 1.19 trillion against the existing bond, a limit after which a new paper is issued to ease the redemption pressure. The RBI, however, had paid underwriting fees for the existing 10-year paper, indicating its willingness to sell the bond. And so, experts say, it could be a late decision not to increase the volume. In today's auction, the RBI sold a little more than Rs 12,000 crore, less than half of the Rs 26,000 crore planned through three bonds.

RBI will use the existing 10-year bond to raise at least Rs 14,000 crore from the markets

RBI will use the existing 10-year bond to raise at least Rs 14,000 crore from the markets
Tuesday, June 22, 2021
The RBI will use the existing 10-year bond to raise at least Rs 14,000 crore from the markets on Friday, taking the outstanding of the paper to more than Rs 1.33 trillion, possibly the highest ever amount raised against security. Generally, a fresh set of bonds is announced after about Rs 1.2 trillion is raised against security, but this is possibly the only case where that limit has been breached. This gives credence to the theory that the central bank may not want to issue a fresh set of 10-year papers in a hurry and would rather continue with the existing security.

RBI keeps growth revival top priority;maintained status quo on interest rates

RBI keeps growth revival top priority;maintained status quo on interest rates
Friday, June 4, 2021
The monetary policy committee of RBI maintained the status quo on interest rates for the sixth consecutive review meeting today(4th June 2021), indicating that reviving economic growth was top on its agenda as it decided to look through inflation pressure which is resurfacing in the economy due to a variety of factors including hardening of crude oil prices. “The MPC also decided unanimously to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward,” said RBI governor Shaktikanta Das in Mumbai while announcing the policy review decision. Read more

MARKET UPDATE:Sensex up 120 points and hovered around 52,350 levels; Nifty topped the 15,700-mark

MARKET UPDATE:Sensex up 120 points and hovered around 52,350 levels; Nifty topped the 15,700-mark
Friday, June 4, 2021
The markets in India ticked up in morning deals today(4th June 2021) after the Reserve Bank of India (RBI) maintained the status quo and left the repo rate unchanged at 4 percent, with an accommodative stance. The S&P BSE Sensex hovered around 52,350 levels, up 120 points, and the Nifty50 index topped the 15,700-mark. ONGC gained 2 percent and was the top Sensex gainer, followed by Larsen & Toubro and Mahindra & Mahindra (both up 1%).

RBI's Monetary Policy Committee expected to hold rates and continue with an accommodative stance to encourage growth

RBI's Monetary Policy Committee expected to hold rates and continue with an accommodative stance to encourage growth
Thursday, June 3, 2021
The RBI is expected tomorrow(4th June 2021) to hold interest rates after a three-day meeting of its Monetary Policy Committee (MPC). The policy will likely maintain an accommodative stance, as helping economic growth remains a priority. Here are key decisions to look at from the review meeting: The market will look out for RBI’s GDP growth forecast for the financial year. In the last policy review meeting of April, GDP growth for the current financial year was projected at 10.5%. For the first quarter, it was projected at 26.2%. The prediction was before the second wave of the coronavirus pandemic that has hurt economic activity due to lockdowns by state governments. Most economists and rating agencies have trimmed their forecasts following the second wave. Many see GDP growth for FY22 in single-digit now, as compared to double-digit predictions made before the second wave. Read more

Rally in domestic stocks despite contraction in FY21 GDP poses the risk of a bubble:RBI

Rally in domestic stocks despite contraction in FY21 GDP poses the risk of a bubble:RBI
Thursday, May 27, 2021
The rally in domestic stocks despite an estimated 8 percent contraction in FY21 GDP poses the risk of a bubble, according to a RBI study. RBI in a study “Is the Bubble in Stock Markets Rational?”, said the widening gap between stretched asset prices relative to prospects for recovery in real economic activity has emerged as a global policy concern while suggesting the need to consider a calibrated unwinding of stimulus once the pandemic waves are flattened and the real economy is firmly on a recovery path. The BSE Sensex hit a record high of 52,154 on February 15, which represented a 100.70 percent surge over March 23, 2020 levels. The index is hovering at 51,000-odd levels in Thursday's trade. “This order of asset price inflation in the context of the estimated 8 percent contraction in GDP in 2020-21 poses the risk of a bubble," it said. Read more

Banks and NBFCs with more than Rs 1,000-crore asset base must bring in new auditors:RBI

Banks and NBFCs with more than Rs 1,000-crore asset base must bring in new auditors:RBI
Wednesday, May 26, 2021
RBI in its April 27th norms on auditors had said banks and NBFCs, excluding those that don’t take deposits and have a sub-Rs 1,000-crore asset base, must immediately bring in new auditors. The para banks, however, were allowed to do the change from the second half of the fiscal year. Banks and NBFCs, having an asset size of Rs 15,000 crore or more, were asked to appoint joint auditors. Crucially, there was retrospective applicability of the extended eligibility criteria for auditors, including those relating to the provision of audit and non-audit services. Both the NBFC lobby group Finance Industry Development Council and the Confederation of Indian Industry protested the rules. However, the RBI argued that the guidelines are compulsorily applicable to only 300 NBFCs, of the 9,600 operational in India. The other NBFCs, with asset sizes below Rs 1,000 crore, have the option to continue with their existing auditors. Read more

RBI is urging lenders to cut ties with cryptocurrency exchanges and traders

RBI is urging lenders to cut ties with cryptocurrency exchanges and traders
Thursday, May 13, 2021
RBI is informally urging lenders to cut ties with cryptocurrency exchanges and traders as the highly speculative market booms, despite a Supreme Court ruling that banks can work with the industry, according to sources. The guidance comes as India is crafting a law to ban cryptocurrencies and penalise anyone dealing in them, which would be among the most sweeping crackdowns on the new investing fad in the world. But with the Covid-19 crisis engulfing the country, no one is sure when such a bill may be passed, adding to investors' confusion. The RBI in 2018 had forbidden banks from dealing in all transactions related to bitcoin and other such assets. That diktat was challenged by the crypto exchanges and in March 2020, India's top court overturned the RBI ban and allowed lenders to extend banking facilities to them. With investors continuing to rush into the hot new asset class, however, regulators appear to be gearing up for another try. Read more

RBI relief will only postpone financial stress from India's Covid surge: Fitch

RBI relief will only postpone financial stress from India's Covid surge: Fitch
Monday, May 10, 2021
According to the rating agency Fitch.RBI's Covid-19 relief package will provide some relief to financial institutions (FIs) in the next 12-24 months. However, it will largely be at the expense of postponing the recognition and resolution of underlying asset-quality problems. There are growing indications that India’s latest wave of Covid-19 infections will add to risks among financial institutions (FIs) by sapping near-term momentum from the economic recovery, Fitch Ratings said in a statement. “We expect the shock to economic activity from the latest wave of the pandemic in India to be less severe than in 2020, even though caseloads and fatalities are much higher. The authorities are implementing lockdowns more narrowly, and companies and individuals have adjusted behaviour in ways that cushion the effects," it added. Read more

Banks want RBI to relax NPA norms for MSME sector underlockdown stress

Banks want RBI to relax NPA norms for MSME sector underlockdown stress
Friday, May 7, 2021
Commercial banks have requested the RBI to relax norms on the classification for non-performing loans for micro, medium, and small enterprises (MSMEs) in view of the stress the sector is facing due to lockdowns imposed by different state governments following the second Covid-19 wave. Sources said a request was made to the banking regulator to extend the non-performing asset classification norms for MSME borrowers to 180 days from 90 days now. A sub-standard loan is the first category of NPA. Bankers said the MSME sector was already reeling under pressure and now the second wave will make things extremely difficult for the sector. Read more

Equitas, Ujjivan, AU Small Finance Bank gain as RBI announces loan relief

Equitas, Ujjivan, AU Small Finance Bank gain as RBI announces loan relief
Wednesday, May 5, 2021
Shares of small finance banks (SFBs) like Equitas SFB, Ujjivan SFB, AU SFB, and Suryoday SFB, on Wednesday, rose up to 6 percent from their respective intra-day day lows on the BSE after the Reserve Bank of India (RBI) announced a special long-term repo operation window for SFBs, whereby the banks can borrow funds up to Rs 10,000 crore at repo rate for deploying for fresh loans SFBs, to be deployed for fresh lending of up to Rs 10 lakh per borrower.

MARKET UPDATE:Sensex leaped 700 points at 49,900 and Nifty50 index jumped 200 points and hit 14,880-mark

MARKET UPDATE:Sensex leaped 700 points at 49,900 and Nifty50 index jumped 200 points and hit 14,880-mark
Thursday, April 8, 2021
The Indian equity markets welcomed the decision of RBI governorShaktikanta Das to keep rates unchanged during the first bi-monthly monetary policy of FY22, along with holding the GDP growth rate steady at 10.5 percent for the new financial year. Despite the recent surge in Covid-19 cases, the governor said the central bank and the government are prepared to tackle the second wave. Soothed by the comments, the benchmark S&P BSE Sensex index leaped 700 points and hit the day's high of 49,900. The Nifty50, meanwhile, jumped nearly 200 points and hit 14,880 on the back of an across-the-board buying. Banking and financial stocks outperformed on Wednesday with the Nifty Bank, Private Bank, and PSU Bank indices settling higher in the range of 1.5 percent to 2 percent. The Nifty Financial Services, IT, Pharma, Metal, and Realty indices, on the other hand, gained up to 1.5 percent. Read more

RBI Monetary Policy highlights

RBI Monetary Policy highlights
Wednesday, April 7, 2021
Key factors of RBI Monetary Policy: 1) RBI Governor Shaktikanta Das said the repo rate at 4 per cent in the April policy and retained its accommodative stance for as long as necessary amid rising inflation and elevated inflation. 2)The marginal standing facility (MSF) rate and the bank rate remain unchanged at 4.25 per cent. The reverse repo rate stands unchanged at 3.35 per cent. 3) Fulfilled a long-standing demand of bond market participants of having an open market operations (OMO) calendar of sorts, through which the central bank would commit its periodic support to the market. 4)MPC maintained GDP growth estimate for FY22 at 10.5%, with risks equally balanced depending on the pace of the vaccination drive. 5)The RBI extended the deadline of TLTRO on the Tap Scheme till September 30, 2021. The scheme was announced on October 9, 2020, and was made available up to March 31, 2021. Read more

RBI extends timeline for auto debit

RBI extends timeline for auto debit
Wednesday, March 31, 2021
The Reserve Bank of India (RBI) on Wednesday extended the deadline for e-mandate for recurring payments of online transactions by six months till September 30, 2021, The deadline was set to expire on March 31. The central bank decided to extend the deadline as the framework is not fully implemented by banks and to prevent any inconvenience to the customers because of lack of preparedness by the system, the RBI said. This comes after banks started informing customers about cancelling the service of e-mandates for auto-debit of funds from cards. Leading private banks have started sending messages to their customers that they will have to transact on their own for services they want to avail, instead of banks deducting the fee automatically on their behalf as banks, as well as other stakeholders, had not readied their systems to comply with the new framework.

RBI’s list of “systemically important banks” may widen

RBI’s list of “systemically important banks” may widen
Thursday, March 18, 2021
After the changes in the pecking order consequent to the merger of state-run players the RBI’s list of “systemically important banks” may wi en. As of date, only the State Bank of India (SBI), ICICI Bank, and HDFC Bank figure in the central bank’s classification of domestic systemically important banks (D-SIBs). The matter has figured in internal meetings of the central bank’s supervisory department, but a formal agenda note is yet to be put up. While SBI and HDFC Bank continue to occupy the top two slots in terms of asset size, Bank of Baroda (BoB), Punjab National Bank (PNB), and Canara Bank have pushed ICICI Bank to the sixth position. The indicator weight for size under the RBI’s ‘Framework for dealing with D-SIBs’ (released on July 22, 2014) is 40 percent. Read more

IDBI Bank share price surges 17% as RBI takes it out of PCA framework

IDBI Bank share price surges 17% as RBI takes it out of PCA framework
Friday, March 12, 2021
Share of IDBI Bank opened 17 per cent higher at Rs 44.80 on the Bombay Stock Exchange after Reserve Bank of India (RBI) removed the lender from the prompt corrective action framework, subject to certain conditions and continuous monitoring. IDBI Bank was removed from the RBI's prompt corrective action (PCA) framework on Wednesday after a gap of nearly four years on improved financial performance. Under the prompt corrective action (PCA), the banking regulator restricted big-ticket loans to stem the surge in risky assets. That meant the lender was not allowed to grow and had to focus its energies on fixing its legacy dud loans and its balance sheet. The performance of the bank was reviewed by the board for financial supervision (BFS) in its meeting held on February 18, 2021, and it was noted that as per published results for the quarter ending December 31, 2020, the bank is not in breach of the PCA parameters on regulatory capital, net NPA and leverage ratio. Read more

RBI governor is optimistic about the growth prospects of the economy

RBI governor is optimistic about the growth prospects of the economy
Monday, March 8, 2021
RBI governor Shaktikanta Das in an interview with TOI said that savers can look at various small savings schemes for better returns while asserting that inflation management remains a top priority. He said equity investors must be judicious and not get carried away by short-term trends. Growth impulses are gradually and steadily getting broad-based. The high-frequency indicators such as steel consumption, PMI for manufacturing and services are expanding, GST collections and e-way bills are showing improvement. Earlier, there was an impression that it was due to pent-up and festival demand. But now, it is genuine demand that is visible. The vaccination drive is giving greater confidence to consumers, so the demand is expected to sustain. The only downside risk is the recent spike in the number of Covid cases in certain parts of the country. With daily vaccination numbers going up, we should be able to contain a further spike. Read more

RBI Governor voices ‘major concerns’ about cryptocurrency

RBI Governor voices ‘major concerns’ about cryptocurrency
Wednesday, February 24, 2021
The RBI is concerned over the impact cryptocurrencies may have on the financial stability in the economy and has conveyed the same to the government, Governor Shaktikanta Das said today(24th Feb.2021). "We have certain major concerns about cryptocurrencies. We have communicated them to the government. It is under consideration in the government and I do expect and I think sooner or later the government will take a call and if required Parliament also will consider and decide," he said in an interview with CNBC-TV18. "I want to make it clear that blockchain technology is different. Blockchain technology benefits have to be exploited, that is another thing. But on crypto, we have major concerns from the financial stability angle and we have shared it with the government. The government will consider and take a call," Das said. Read more

Finace Ministry asks RBI to ensure a higher dividend in FY22

Finace Ministry asks RBI to ensure a higher dividend in FY22
Thursday, February 18, 2021
The finance ministry has asked the RBI to make every effort to secure a higher dividend for the government in the financial year 2021-22 (FY22), despite sliding interest rates globally, sources said. It has also sought the RBI’s advice on gold monetisation. In the correspondence and discussions between the two, the RBI has advised against any change in the inflation goalposts. RBI Governor Shaktikanta Das has assured Finance Minister Nirmala Sitharaman that the Rs 12.05-trillion gross borrowing programme for FY22 will go through smoothly. To ensure it, the RBI team has, however, cautioned the government against any dilution of the inflation management policies, and the targets under the monetary policy framework, sources said. Read more

GDP will rise 10.5 per cent in 2021-22:RBI governor

GDP will rise 10.5 per cent in 2021-22:RBI governor
Friday, February 5, 2021
RBI kept its policy repo rate unchanged at 4 percent and reverse repo rate at 3.35 percent, and promised an accommodative stance as long as necessary to revive growth and come out of the Covid-19 induced stress. RBI said it will restore the cash-reserve ratio (CRR) to its normal levels in two phases, 3.5 percent (from 3 percent now) effective March 27, and then at 4 percent from May. This would mean banks will again have to set aside money with the central bank. The special relaxation of 100 basis points was made to tide over the Covid induced stress situation last year. There was ample assurance about comfortable liquidity in the speech. Some sections of the market were expecting an announcement of the open market operations (OMO) calendar that would spell out how many bonds the central bank would buy from the secondary market to accommodate the borrowing program. That did not happen. Read more

MARKET UPDATE: Sensex up 400 points and hovered near 51,000 levels and Nifty around 15,000 mark

MARKET UPDATE: Sensex up 400 points and hovered near 51,000 levels and Nifty around 15,000 mark
Friday, February 5, 2021
The markets in India were holding on to their gains near their fresh lifetime highs today(5th Feb.2021) after the Reserve Bank of India kept the repo rate unchanged at 4 percent while the stance remained 'accommodative'. Besides, the RBI projected GDP growth of 10.5 percent in FY22 for India while the projection for CPI-based inflation was revised to 5.2 percent for Q4FY21. The S&P BSE Sensex was trading 400 points up and hovered near the 51,000 levels while the Nifty50 was around the 15,000 marks as well. One hundred and forty-seven companies including Britannia Industries, Mahindra & Mahindra, Punjab National Bank, Mrs. Bectors Food, Fortis Healthcare, Pfizer, and Shipping Corporation of India are scheduled to release their December quarter numbers today. Read more

Budget 2021 has heated up the bond market

Budget 2021 has heated up the bond market
Thursday, February 4, 2021
The bond market got a negative surprise on Budget day (1st Feb 2021) when the government projected its gross borrowing numbers for the next financial year at Rs 12.05 trillion, much higher than the expected Rs 10.5 trillion. To make the matter worse, the government said it would borrow an additional Rs 80,000 crore in the current financial year, too. “The Rs 80,000 crore extra borrowing for this year is especially a bolt from the blue for the bond market,” said an expert. “This is because the government has been consistently running very high cash balances lately, revenues have picked up dramatically, and even though spending has gone up, it hasn’t been tracking anywhere close to what is required to yield the revised Budget numbers.” Read more

India's GDP is within the striking distance of attaining positive growth: RBI bulletin

India's GDP is within the striking distance of attaining positive growth: RBI bulletin
Thursday, January 21, 2021
India's GDP is within the striking distance of attaining positive growth, the Reserve Bank said. The Indian government launched the world's biggest vaccination drive on January 16 to protect people from COVID-19. "What will 2021 look like? The shape of the recovery will be V-shaped after all and the 'V' stands for the vaccine," said an article on the 'state of the economy' in the RBI's January Bulletin. India has launched the biggest vaccination drive in the world, backed by its comparative advantage of having the largest vaccine manufacturing capacity in the world and a rich experience of mass inoculation drives against polio and measles. "If successful, it will tilt the balance of risks upwards," said the authors who among others include RBI Deputy Governor Michael Debabrata Patra. Read more

RBI fines Bajaj Finance for breaching regulatory compliance norms

RBI fines Bajaj Finance for breaching regulatory compliance norms
Wednesday, January 6, 2021
Shares of Bajaj Finance were 2 per cent down today after the Reserve Bank of India on Tuesday imposed a penalty of ₹2.5 crores for breaching regulatory compliance norms by an order dated January 05, 2021for violation of directions issued by RBI on Managing Risks and Code of Conduct in Outsourcing of Financial Services by NBFCs and Fair Practices Code (FPC) for applicable NBFCs, contained in the Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016; and a specific direction to the company to ensure full compliance with FPC in letter and spirit," the RBI said in a statement.“This penalty has been imposed in exercise of powers vested in RBI under the provisions of clause (b) of sub-section (1) of section 58 G read with clause (aa) of sub-section (5) of section 58B of the Reserve Bank of India Act, 1934, taking into account the failure of the company to ensure that its recovery agents did Read more

Expectations from fixed income market in 2021: What experts say

Expectations from fixed income market in 2021: What experts say
Friday, January 1, 2021
The year 2021 will be marked with hopes for the early rollout of the Covid-19 vaccine, normalisation of economic activities, and a steady recovery in growth. India will see a slow cyclical recovery along with the gradual easing of inflation, though that may not be enough to sustain RBI’s accommodative policy stance. Interest rates will likely harden with no rate cuts and persistent fiscal pressure. Key risks for the government will be to steer through any financial sector stress, reviving the weak investment cycle, and any adverse issues with global liquidity. Two issues will shape India’s macro-economic situation in CY2021; easy money policies in developed markets and rollout/mass availability of Covid vaccines. Easier global monetary policies will aid risk-on flows, while vaccine rollouts Interest rates will likely harden with no rate cuts and persistent fiscal pressure. Read more

GOI may recommend a looser inflation target for RBI

GOI may recommend a looser inflation target for RBI
Wednesday, December 9, 2020
GOI is considering recommending a looser inflation target for RBI, allowing it to focus more on economic growth despite price pressures, according to some sources. A consumer-price inflation band tracked by the Reserve Bank of India may be relaxed further from the current 2%-6% range. The government still needs to hold consultations with the central bank before finalizing a new framework sometime next year. The current mandate, set in 2016, requires the RBI to keep headline inflation at the 4% midpoint of its target range. The Finance Ministry is of the view that the RBI can’t be saddled with a rigid inflation targeting framework, especially in situations when growth needs to be pushed, as per the sources. Read more

RBI kept key interest rates steady

RBI kept key interest rates steady
Friday, December 4, 2020
RBI kept key interest rates steady as widely expected today(4th December 2020) amid persistently high inflation but said it will ensure ample liquidity is provided to stressed sectors to keep a nascent economic recovery on track. Its monetary policy committee decided to retain an accommodative policy stance at least for the current financial year and into the next year to revive growth on a durable basis while ensuring that inflation remains within the target, Governor Shaktikanta Das said in an online briefing. Das said the economy was rebounding faster than expected from a coronavirus-induced slump earlier in the year but warned signs of recovery were far from being broad-based. Covid-19 infections are also continuing to climb. Das said MPC members voted unanimously to hold rates and retain the stance. The key lending rate of the RBI or the repo rate was left unchanged at 4 percent while the reverse repo rate or the key borrowing rate stayed at 3.35 percent.

RBI tells HDFC Bank to stop digital launches

RBI tells HDFC Bank to stop digital launches
Thursday, December 3, 2020
Shares of HDFC Bank was down 2.5 per cent after the Reserve Bank of India (RBI) has advised the bank to halt all its digital launches as well new sourcing of credit card customers temporarily. The RBI issued the order dated December 2, 2020, to HDFC Bank with regard to certain incidents of outages in the internet banking, mobile banking and payment utilities of the bank over past two years including the recent outages in the bank’s internet banking and payment system on November 21, 2020, due to a power failure in the primary data centre. The order also states that HDFC Bank’s board must examine the lapses and fix accountability. A similar incident took place on December 3, 2019, with customers complaining that they were unable to pay their loan EMIs or settle credit card bills on time Read more

RBI Dy Governor calls for tighter regulations for large NBFCs

RBI Dy Governor calls for tighter regulations for large NBFCs
Friday, November 6, 2020
Newly-appointed deputy governor M Rajeshwar Rao today (6th November 2020) said larger non-banking finance companies (NBFC) should be regulated as strictly as banks in order to preserve financial stability, at the same time letting the other NBFCs enjoy the light-touch regulation for the sector. The sector can expect to witness a graded regulatory framework for NBFCs "calibrated in relation to their contribution to systemic significance.” This may include having a relook on the regulation of microfinance institutions, and curtailing the regulatory arbitrage enjoyed by certain NBFCs that are neither too big to cause systemic instability, nor small enough to be ignored. "NBFCs with significant externalities and which contribute substantially to systemic risks must be identified and subjected to a higher degree of regulation. One can also argue that the design of a prudential regulatory framework for such NBFCs can be Read more

RBI keeps policy rates unchanged and will run 'accommodative' stance

RBI keeps policy rates unchanged and will run 'accommodative' stance
Friday, October 9, 2020
The monetary policy committee (MPC) of the Reserve Bank of India (RBI) kept policy rates unchanged, and the governor assured that the worst was possibly over for the economy and it can now hope for a steady recovery towards pre-pandemic growth rates. The newly-appointed six-member MPC voted unanimously to keep the policy repo rate at 4 percent, and said the real gross domestic product (GDP) growth rate in 2020-21 could be a negative 9.5 percent, with “risks tilted to the downside.” The stance of the policy would remain “accommodative,” for “as long as necessary – at least during the current financial year and into the next year – to revive growth on a durable basis and mitigate the impact of Covid-19 while ensuring that inflation remains within the target going forward,” RBI governor Shaktikanta Das in his streamed monetary policy address today(9th Oct.2020) morning. Read more

external members of RBI'S monetary policy committee appointed

external members of RBI'S monetary policy committee appointed
Tuesday, October 6, 2020
The government has appointed Jayanth Varma who is a professor in the Indian Institute of Management, Ahmedabad, Ashima Goyal, member of the Economic Advisory Council of Prime Minister, and Shashanka Bhide, senior advisor at National Council for Applied Economic Research as external members of the Reserve Bank of India's monetary policy committee. 1. Jayanth Varma is a known expert in financial markets. He is currently a professor at the Indian Institute of Management (IIM), Ahmedabad, and teaches courses in the capital market, fixed income, alternative investment, and corporate finance. He has been the dean of IIM for three years. Prior to this, he was a full-time member of the market regulator Securities Exchange Board of India for a year. This is after completing his three years stint at Sebi as a part-time member. Prof. Varma, who is also a qualified cost accountant awarded a gold medal for scholastic performance from the IIM. Read more

Rupee the new inflation-fighting tool?

Rupee the new inflation-fighting tool?
Tuesday, September 1, 2020
When all most of us are worried about interest rates and how The RBI is fighting a spike in bond yields, it has quietly sent a message on its currency policy. It can’t handle the `impossible trinity’ anymore. This may well be the turning point in the adoption of policy tools. In a note announcing the `Measures to Foster Orderly Market Conditions’, the central bank has slipped in a message that it is worried about inflation and it won’t hesitate to use measures other than interest rates to fight price pressures. The recent appreciation of the rupee is working toward containing imported inflationary pressures,’’ said RBI in the note, which was dominated by measures to contain the bond market volatility. When RBI openly accepts that currency appreciation is helping achieve one of its key goals of inflation management when its hands are tied, it is an acknowledgment that the objective of currency operations has evolved beyond just tempering the volatility. Read more

Is Golden era for Bank Fixed Deposits gone forever?

Is Golden era for Bank Fixed Deposits gone forever?
Friday, August 28, 2020
As the interest rate on bank deposit continues to be subdued and real returns turn negative in the wake of rising inflation, the common Indian bank depositor has been left rueing a bitter harvest. At stake is the future of a time-tested investment instrument that generation after generation of Indians used to keep their money in and generate fairly decent returns over time. Bank fixed deposit (FD) rates have fallen from 8-10 percent per annum a few years ago to 5-7 percent per annum currently, says Jimmy Patel, MD & CEO, Quantum Mutual Fund. For most of India's senior citizens, FDs are the primary investment, and current rates are not viable because of paltry real returns, he adds. Read more

Setting up a bad bank is not just necessary but unavoidable:Former RBI Governor

Setting up a bad bank is not just necessary but unavoidable:Former RBI Governor
Wednesday, August 26, 2020
D Subbarao, the former RBI Governor, feels that setting up a bad bank is not just necessary but unavoidable in the present circumstances when NPAs are likely to balloon and much of the resolution will have to take place outside the IBC framework. The standard advantage of a bad bank is that the entity taking a decision on the sale price is different from the entity accepting that price. Conflict of interest and corruption is avoided, and importantly, is seen to be avoided. The former RBI Governor noted that with the economy contracting by at least five percent this fiscal year, non-performing assets (NPAs) will balloon. Also, according to RBI's Financial Stability Report, gross NPAs of banks may rise to 12.5 percent by March 2021 under the baseline scenario, from 8.5 percent in March 2020. Read more

Indian economy will take longer to recover: RBI

Indian economy will take longer to recover: RBI
Tuesday, August 25, 2020
stimulus measures once the cure to Covid-19 is found, the report adds. High-frequency indicators so far pointed to a “retrenchment in activity that is unprecedented in history,” the annual report said, adding, “the improvements that became visible in May and June after the lockdown was eased in several parts of the country, appear to have lost strength in July and August, mainly due to reimposition or stricter imposition of lockdowns, suggesting that contraction in economic activity will likely prolong into the second quarter.” The central bank noted that the shock to consumption is severe, and it will take quite some time to mend and regain the pre-pandemic momentum. Read more

PSB shares were trading higher in an otherwise weak market

PSB shares were trading higher in an otherwise weak market
Wednesday, August 12, 2020
PSB shares were trading higher on the NSE, in an otherwise weak market, today(12th August 2020). The Nifty PSU Bank index rose 4 percent in the morning deals on the NSE as against a 0.36 percent decline in the benchmark S&P BSE Sensex. The government is considering extending "ratna" title to PSBs like SBI, and Bank of Baroda, according to media reports. As per government rules, a public sector enterprise can be awarded 'ratna' title to give them financial autonomy. Currently, there are four categories of 'PSU ratna' in India, namely 'miniratna-II', mini Ratna-I', 'navratna' and 'maharatna'. Read more

RBI extends debt restructuring for MSME, ups gold LTV ratio

RBI extends debt restructuring for MSME, ups gold LTV ratio
Thursday, August 6, 2020
Financials and realty stocks soared in the afternoon session today after the RBI, in its second bi-monthly policy for the financial year 2020-21 (FY21), announced measures to support NBFCs, HFCs, corporate debt market, debt MF, agriculture and backward districts (via priority sector loans). Besides, it announced a relaxation on the loan-to-value (LTV) ratio for gold loans. "It has been decided that stressed MSME borrowers will be made eligible for restructuring their debt under the existing framework, provided their accounts with the concerned lender were classified as standard as on March 1, 2020. This restructuring will have to be implemented by March 31, 2021," RBI governor Shaktikanta Das said. Read more

RBI:Repo rate unchanged at 4%; stance accommodative

RBI:Repo rate unchanged at 4%; stance accommodative
Thursday, August 6, 2020
The RBI today(6th August 2020) decided to keep the benchmark repo rate unchanged at 4 percent, already the lowest since 2000, and reverse repo rate at 3.35 percent. The six-member Monetary Policy Committee (MPC) of the RBI, headed by the Governor Shaktikanta Das, announced the decision after its 24th two-day bi-monthly meeting. RBI had last revised its policy rate on May 22, in an off-policy cycle to perk up demand by cutting interest rate to a historic low. Governor Shaktikanta Das said the MPC voted to keep interest rate unchanged and continue with its accommodative stance to support growth. "Global economic activity has remained fragile. A surge in Covid-19 cases has subdued early signs of revival, said Das, adding: "Economic activity had started to recover, but a surge in infection has forced imposition of lockdowns." Supply chain disruptions were persisting and inflationary pressures were evident across segments, he said. Read more

HDFC Bank share price gains nearly 6% on RBI appointing new CEO

HDFC Bank share price gains nearly 6% on RBI appointing new CEO
Tuesday, August 4, 2020
Private lender HDFC Bank's share price rose nearly 6 per cent intraday on August 4 on the report of RBI approving new CEO. Mr.Sashidhar Jagdishan will be the new CEO of HDFC Bank for a period of 3 years w.e.f. his date of taking charge, i.e. October 27, 2020, and will be replacing Aditya Puri. The appointment will put an end to one of the most keenly watched successions in India’s banking industry. He is a chartered accountant and holds a Master’s degree in Economics of money, banking and finance. He joined the Bank in the 1996 and currently, he is the Group Head of Finance, Human Resources, Legal & Secretarial, Administration, Infrastructure, Corporate Communications, Corporate Social Responsibility & the Strategic Change Agent of the bank. He joined the bank around 1996 as a Manager in the Finance function, and then went on to become Business Head - Finance in 1999 and Chief Financial Officer in the year 2008. Read more

First full-year contraction in 4 decades all set to be reality for India

First full-year contraction in 4 decades all set to be reality for India
Friday, May 22, 2020
RBI governor Shaktikanta Das today said that GDP growth would likely remain in the negative territory in 2020-21 lending credence to the dire forecasts rating agencies and brokerages. Das said he was optimistic about a possible pick-up in growth impulses in the second half, but added that everything was going to depend on how the pandemic situation plays out. In the second half, Das said, the economy could get a boost from ideal conditions created by fiscal, monetary, and administrative actions taken so far — possibly leading to a change in the situation. Read more

MARKET UPDATE:Sensex, Nifty flat;RBI cuts repo rate by 40 bps to 4%

MARKET UPDATE:Sensex, Nifty flat;RBI cuts repo rate by 40 bps to 4%
Friday, May 22, 2020
Markets in India were trading flat today (22nd May 2020) as the Reserve Bank of India (RBI) slashed repo rate by 40 bps to 4 percent. Among headline indices, the S&P BSE Sensex was up 40 points at around 30,970 levels and the Nifty50 index reclaimed the 9,100 marks. Infosys gained 2 percent after the class-action lawsuit filed against the company in the US was dismissed. Reliance Industries gained 1 percent after the conglomerate said that KKR would invest Rs 11,367 crore into Jio Platforms for a 2.32 percent equity stake. The trends among Nifty sectoral indices were mixed. Nifty PSU Bank index, up 1.8 percent, gained the most. Twenty-five companies including Alembic Pharmaceuticals, IDFC First Bank, and UPL, are scheduled to announce their March quarter earnings later in the day.

Rs 50k crore liquidity window for MFs by RBI

Rs 50k crore liquidity window for MFs by RBI
Monday, April 27, 2020
Financial stocks including Axis Bank, ICICI Bank, and IndusInd Bank surged up to 6 percent on the BSE today (27th April 2020) after RBI announced a Special Liquidity Facility (SLF) for Mutual Funds worth Rs 50,000 crore. "Under the SLF-MF, the RBI shall conduct repo operations of 90 days tenor at the fixed repo rate. The SLF-MF is on-tap and open-ended, and banks can submit their bids to avail funding on any day from Monday to Friday," the RBI said in a statement. Funds availed under the SLF-MF shall be used by banks exclusively for meeting the liquidity requirements of MFs by (1) extending loans, and (2) undertaking the outright purchase of and/or repos against the collateral of investment-grade corporate bonds, commercial papers (CPs), debentures and certificates of Deposit (CDs) held by MFs, it added.

RBI to conduct simultaneous purchase, sale of gilts via OMO on April 27

RBI to conduct simultaneous purchase, sale of gilts via OMO on April 27
Thursday, April 23, 2020
The Reserve Bank of India 0n 23rd April said it has decided to conduct simultaneous purchase and sale of government securities under open market operations (OMO) for Rs 10,000 crore each on April 27 on a review of current and evolving liquidity and market conditions. The government will purchase long-dated securities maturing 2026, 2028, 2029 and 2030, aggregating Rs 10,000 crore, while it will see short-dated securities maturing June 2020, October 2020 and April 2021. There will be no security-wise notified amount. The result of the auctions will be announced on the same day.

Focusing on the light during the darkest moment- RBI's another stimulus package

Focusing on the light during the darkest moment- RBI's another stimulus package
Friday, April 17, 2020
RBI today (17th April 2020) freed up more capital for banks to lend, announced a fresh Rs 50,000 crore targeted long-term repo operation (LTRO 2.0) to address the liquidity stress of shadow banks and microfinance institutions and hinted at the possibility of further rate cuts going forward.RBI Governor Shaktikanta Das unveiled fresh measures aimed at maintaining adequate liquidity in the system, facilitating and incentivising banks to ensure better credit flow and enabling the normal functioning of the financial markets. RBI slashed the reverse repo rate by 25 bps to 3.75 percent, making it less attractive for commercial banks to park cash with the central bank. Read more

Coronavirus fight-RBI reduces repo rate by 75 basis points to 4.4 per cent.EMIs put on hold

Coronavirus fight-RBI reduces repo rate by 75 basis points to 4.4 per cent.EMIs put on hold
Friday, March 27, 2020
After yesterday's GOI announcement of its economy rescue in right earnest with a Rs 1.70 lakh crore coronavirus counter, the Reserve Bank of India joined the big fight today with a host of measures aimed at minimising the damage from Covid-19. These measures come just hours after Moody's Investors Service cut India's growth forecasts for 2020 calendar year to 2.5% from 5.3%. A moratorium of three months of EMIs on all outstanding loans was announced. Read more

A Bill to provide more powers to RBI for regulating co-operative banks introduced in the Lok Sabha

A Bill to provide more powers to RBI for regulating co-operative banks introduced in the Lok Sabha
Wednesday, March 4, 2020
A Bill to provide more powers to RBIfor regulating co-operative banks was introduced by Finance Minister Nirmala Sitharaman in the Lok Sabha on Tuesday. The Banking Regulation (Amendment) Bill, 2020, which comes in the backdrop of Punjab and Maharashtra Co-operative Bank scam, seeks to strengthen co-operative banks by increasing professionalism, enabling access to capital, improving governance and ensuring sound banking through the RBI. The Bill was introduced in the Lok Sabha amid the din, with Sitharaman saying if the opposition wants to deny the small depositors their rights then “it is a shame”. The proposed law seeks to enforce banking regulation guidelines of the RBI in cooperative banks, while administrative issues will still be guided by the Registrar of Cooperative.

RBI Governor sees room to cut rates as coronavirus dents growth

RBI Governor sees room to cut rates as coronavirus dents growth
Wednesday, March 4, 2020
RBI Governor Shaktikanta Das in an interview with Bloomberg News in Mumbai just before finance ministers and central bank chiefs from the G-7 economies were scheduled to discuss policy options, said: “there is a strong reason for coordinated policy action.” For India, options include a rate cut and supporting the market through liquidity measures, he said. We’re ready for a response if the situation requires,” Das said.“I think the G-7 countries are having a conference. And going forward, in the near future, I do expect some discussion through video conference or telephone conference among the central banks of the large economies, including India.”

Credit flow to real estate sector needs to improve: RBI Guv

Credit flow to real estate sector needs to improve: RBI Guv
Tuesday, February 25, 2020
Reserve Bank of India (RBI) Governor Shaktikanta Das on 24th Feb said that slowing credit offtake was one of the challenges facing Indian banks and credit flow to the real estate sector needed to improve. He said, "RBI proposes to take tematic studies across financial institutions, and top 50 Non-Banking Financial Companies (NBFCs) are also being monitored very closely. Amid a liquidity crunch following the crisis in IL&FS in 2018, it has become difficult for developers to real estate sectorraise construction finance, once considered the safest form of lending by banks and NBFCs. Reserve Bank Governor also asked banks to be prudent in lending and highlighted that the quality of appraisal is very important. He mentioned that the issue of governance in public and private sector banks is of utmost importance and the management of banks have a critical role to play in improving the governance.

RBI's key recommendations for 5 year financial inclusion strategy

RBI's key recommendations for 5 year financial inclusion strategy
Friday, February 21, 2020
RBI released National Strategy for Financial Inclusion for five-year period. As per RBI statement access to formal finance can boost job creation, reduce vulnerability to economic shocks and increase investments in human capital. The Financial Inclusion Advisory Committee of the RBI — in consultation with the Centre,SEBI, IRDAI, and PFRDA— has recommended various ways in which the objective can be fulfilled.The key recommendations are 1.Access to fibacial servic providers in every village within a range of 5km 2.Every adult registered under PNDY should be enrolled in insurence,pension scheme 3.Public credit registry to be made fully operational by MArch 2022 4. Strenthening of digital finacial services to facilitate less cash society 5. Every new entrant should be given information on govt livelihood programme

The coronavirus outbreak in China will have a limited impact on India

The coronavirus outbreak in China will have a limited impact on India
Thursday, February 20, 2020
The coronavirus outbreak in China will have a limited impact on India but the global GDP and trade will definitely get affected due to the large size of the Chinese economy, RBI Governor Shaktikanta Das has said. The pharmaceutical and electronic manufacturing sectors in India are dependent on China for inputs and they may be impacted, Das told. Alternatives are being explored to overcome these issues, he said. For India, China is an important trading partner and policymakers both in the government and the monetary authority "are very watchful of the developments that are taking place," Mr Das said. He noted that the critical thing to be watched and monitored now is how quickly Chinese authorities are able to contain the problem. For India, he said, the important aspect is manufacturer should be able to quickly develop alternative sources.

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