Market players say following the tax cuts, the market mood had changed from bearish to positive, which should help sustain the rally.
The rise in bond yields would make it difficult for banks to pass on rate cuts as except for retail loans, most of their legacy portfolio are linked to marginal cost based lending rate, which takes into consideration bond yields.
Close to 21.5 per cent of this will be sold to Japan's Nippon Life, which will then become the sole promoter of the fund house.
Non-banking financial companies, that used to comprise at least 70 per cent of the issuance in the corporate bond market, are witnessing a credit freeze as investors shun bond issued by lower-rated firms.
The Malegam committee on the RBI's capital adequacy had suggested that the RBI must move away from its methodology to calculate the foreign exchange gains to a weighted average cost-based valuation method. Central bank may done away with provisioning requirements, to enable higher transfer of surplus in the 2017-18 fiscal, analysts say.
All public sector banks have moved to such a regime voluntarily, while private banks are yet to. The state-run banks have introduced repo-linked products for floating-rate home and auto loans, but the RBI said loans to micro, small and medium enterprises (MSMEs) should also be linked to an external benchmark.
The Jan-Dhan accounts are zero balance accounts, comes with a life cover of Rs 30,000 per person, and an accidental cover of Rs 100,000. An active user of the account can also get overdraft facility of Rs 5,000 from banks.
The RBI governor's assurance should give investors enough confidence to start believing in the NBFC sector again, say bankers.
Reserve Bank of India Governor Shaktikanta Das tells Anup Roy, Raghu Mohan and Niraj Bhatt that it is time for banks to lower interest rates and start lending to cash-starved finance companies after due credit appraisal and proper risk assessment.
By no means do economists see the Reserve Bank of India stop at just a 25-bp cut. Some of the economists such as Soumyakanti Ghosh of State Bank of India are of the firm view that rates have room to fall by a total of 75 bps in the current financial year, starting with 25 bps in the August 7 policy.
Apart from easing the NPA pressure on domestic banks, the RBI's move can allow companies to raise cheap, long-term loans easily now.
Half a dozen stocks from the large-cap universe and over two dozen from the mid-cap universe have been replaced.
These include increasing the public float in listed companies to 35 per cent from 25 per cent, increasing the minimum statutory limit for FPI investment in a firm from 24 per cent to the sectoral foreign investment, and lowering government holding in listed public sector undertakings.
Vodafone Idea, the promoter of Aditya Bira Idea Payments Bank, said in a notification to the exchanges late on Friday that the board of the bank approved winding up the business, subject to approval from the Reserve Bank of India.
The beleaguered Deutsche Bank announced major overhaul of its business, which included discontinuing loss-making equities trading business, creating a new 'bad bank', and cutting 18,000 jobs. Deutsche Equities India employs 35 people, all of whom could face the job axe.
The government planned to borrow 10-15 per cent of the total borrowing offshore. That works out to at least Rs 71,000 crore, or about $10.4 billion at Friday's exchange rate.
While the bond market is relatively conservative about their interest rate expectations, the currency market seems to be projecting that interest rates should be much sharper
A lack of adequate disclosures raises the financing costs of corporate firms, especially sub-investment grade ones, and keeps the capital markets small, believes RBI deputy governor Viral Acharya.
In absolute terms, the CAD stood at $4.6 billion in the current fourth quarter, compared with $13 billion in the year-ago quarter and $17.7 billion in the third quarter of fiscal year 2018-19.
The RBI panel has also recommended a government-sponsored 'fund of funds' of Rs 10,000 crore to support the venture capital and private equity firms investing in the MSME sector.
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