Key lending rate (repo) raised by 50 basis points to 4.9 per cent; 2nd increase in 5 weeks
At a time when the role of corporate boards is once again under the scanner, independent directors on the Paytm Payments Bank board have indicated that red flags were raised over regulatory issues but they may have been late in doing so. "As independent directors, we asked questions and monitored responses to the Reserve Bank of India (RBI). Many changes were made on compliances. "Obviously, in retrospect, it was not found to be enough," said one of the independent directors on the condition of anonymity.
People are availing far more of certain kinds of unsecured loans than was the case before the pandemic. Bank lending for buying consumer durables and funding of credit cards and other personal loans have risen by Rs 6.9 trillion between August 2019 and August 2023, shows a Business Standard analysis of data from the Reserve Bank of India (RBI). These loans are typically unsecured, which means they are provided without collateral.
All six members of the Reserve Bank of India's (RBI's) monetary policy committee (MPC) expressed caution over food inflation during the December review, while two external members warned about high real interest rates as headline inflation approaches its target of 4 per cent. The central bank continued to maintain the status quo on both the repo rate and the stance in the December monetary policy. India's retail inflation in November rose to 5.5 per cent - its fastest pace in three months - due to higher food prices.
Here are the highlights of the monetary policy announced by RBI governor Shaktikanta Das on Friday.
'India's emergence as a top crypto market comes despite a regulatory and tax environment that can be challenging for the industry to navigate.'
Reserve Bank of India Governor Shaktikanta Das on Friday said the country's economy is an island of stability despite two Black Swan events and multiple shocks. "In an ocean of high turbulence and uncertainty, Indian economy is an island of macroeconomic and financial stability," Das told reporters during the post policy press conference. He said the financial stability, macroeconomic stability and resilience of growth is being witnessed despite two Black Swan events happening one after the other and multiple shocks.
After raising interest rate by a cumulative 250 basis points in 11 months, the Reserve Bank of India (RBI) on Thursday unexpectedly kept benchmark rate unchanged as global banking woes added uncertainty to the economic outlook. Five out of six members of MPC voted to remain focused on the withdrawal of accommodation to ensure inflation aligns with target while focusing on growth, RBI Governor Shaktikanta Das said on Thursday. The Monetary Policy Committee of the central bank decided to take a pause after a rate hike seen in previous six consecutive policies.
Startup founders need to sit up and think about how not to take stardom for granted and how not to disappoint their fans who have stood in long queues for those precious selfies with popular entrepreneurs, notes Nivedita Mookerji.
The Reserve Bank on Wednesday allowed credit cards to be linked with the unified payments interface (UPI), which will enable more people to make payments using the popular platform. At present, UPI facilitates transactions by linking savings or current accounts through users' debit cards. "...it is proposed to allow linking of credit cards to UPI," RBI Governor Shaktikanta Das said while announcing the regulatory moves, along with the bi-monthly policy review.
Reserve Bank of India (RBI) Governor Shaktikanta Das had stumped the market in the previous two policies - in August and in October - first with action and then with words. In August, it was the introduction of an incremental cash reserve ratio (I-CRR) to take out excess liquidity, which took the markets by surprise. In October, there was no action. Rather, what is known as "open mouth operation", Das' comment that the central bank might conduct open market operations (OMOs) by selling bonds tempered the euphoria in the bond markets after JP Morgan's inclusion of India in its Emerging Market Bond Index.
The banking system's liquidity slipped into deficit for the first time in the current financial year (2023-24) due to the imposition of the Incremental Cash Reserve Ratio (I-CRR) for banks and outflows from goods and services tax (GST) payments, according to dealers. Reserve Bank of India (RBI) data shows it injected Rs 23,644 crore on August 21. The last time liquidity was in deficit was on March 27, when the RBI injected Rs 45,575 crore.
Reserve Bank of India (RBI) on Friday said its board has approved a dividend payment of Rs 30,307 crore to the government for the financial ended March 2022. The board approved the transfer of Rs 30,307 crore as surplus to the central government for the accounting year 2021-22 while deciding to maintain the Contingency Risk Buffer at 5.50 per cent, RBI said in a statement. The decision on the dividend payment was made in the 596th meeting of the Central Board of Directors of RBI, headed by Governor Shaktikanta Das, held on Friday.
UCO Bank, Bank of Maharashtra, Bank of India, Indian Overseas Bank, Indian Bank, and Central Bank of India don't have a non-executive chairman.
For five consecutive policy reviews in 2023, the Reserve Bank of India (RBI) chose to hold rates, citing inflation threat. And when the prices did cool off a bit, it reminded all about the target to get the headline consumer price inflation at 4 per cent and the risks from food inflation. Heading into the new year, all eyes are on when RBI will cut the rates, especially after one of the Monetary Policy Committee (MPC) members stressed on the need for such an action in the face of the US Federal Reserve's guidance for easing rates.
From the Sensex pack, Mahindra & Mahindra, Bajaj Finserv, IndusInd Bank, Tata Motors, Tata Steel, Larsen & Toubro, Axis Bank and NTPC were among the major laggards. UltraTech Cement, Infosys, Asian Paints, Kotak Mahindra Bank, Sun Pharma and Bharti Airtel were the winners.
RBI Governor Shaktikanta Das on Wednesday replied to the 'history major central bank governor' taunt faced by him, questioning if Argentinian football legend Lionel Messi is also a post-graduate in history. An interviewer anchoring a fireside chat at a summit organised by Business Standard compared his position to an opponent facing Messi at a football arena in Qatar, to which Das replied with wit. "Don't mind it, but was Messi also a post-graduate in history? Not often, but I am sometimes reminded by people that I am supposed to have done history," Das said.
Vegetable rates may ease from September, led by tomato prices, which have started showing signs of correction on the back of increased supply, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Wednesday. "Looking ahead, the spike in vegetable prices in July is starting to see a correction, led by tomato prices. "New arrivals of tomatoes in mandis are already softening the prices, coupled with proactive supply management in the case of onions.
The finance ministry has cautioned that global and regional uncertainties and domestic disruptions may keep inflationary pressures elevated in the coming months, warranting "greater vigilance" by the government and the Reserve Bank of India (RBI). "Russia's decision to terminate the Black Sea grain deal, along with dry conditions in major wheat-growing areas, caused a price spike in cereals. Domestic factors like white fly disease and an uneven distribution of monsoon exerted pressure on vegetable prices in India," the ministry said in its latest Monthly Economic Report for July, released on Tuesday. However, the report maintained, the recent price surge in certain food items "is expected to be transitory". "Tomato prices are likely to decline with the arrival of fresh stocks by the end of August or early September.
Reserve Bank Governor Shaktikanta Das on Wednesday said that RBI is monitoring the situation regularly with regard to the withdrawal of Rs 2,000 currency notes and expressed confidence that the entire exercise will be completed in a non-disruptive manner. The Reserve Bank of India (RBI) on Friday announced the withdrawal of Rs 2000 denomination banknotes as part of its currency management and permitted the exchange of Rs 2000 currency notes up to Rs 20,000 in one go from Tuesday onwards. The exchange or deposit window is available until September 30, 2023.
Retail inflation jumped to a 15-month high of 7.44 per cent in July as prices of vegetables and other food items spiked, according to official data released on Monday. The Consumer Price Index (CPI) based inflation was at 4.87 in June and 6.71 per cent in July 2022. Previously, high inflation was recorded at 7.79 per cent in April 2022.
The Reserve Bank on Monday advised banks to provide shade from the sun and water to customers waiting to exchange or deposit Rs 2,000 notes. It can be noted that during the note ban in 2016, there were allegations of customers dying while waiting in queues to exchange bank notes. Following Friday's announcement of withdrawing Rs 2,000 notes -- the notes continue to be legal tender unlike demonetisation exercise -- there were concerns about customers facing inconvenience, especially given the summer being at its peak.
There hasn't been any dramatic moment in the first act (the Budget) but nobody would complain. It's par for the course as long as the figures don't change in the main Budget, which will be presented after general elections.
The Reserve Bank of India has postponed the meeting of its interest rate setting Monetary Policy Committee by a day to August 3 due to administrative exigencies. The RBI said the decision of the MPC will be known on August 5 as against the earlier schedule of August 4. "Due to administrative exigencies, it has been decided to reschedule the MPC meeting from August 2-4, 2022 to August 3-5, 2022," RBI said in a statement on Thursday.
Kotak Mahindra Bank was the biggest loser in the Sensex pack, sliding 2.68 per cent, followed by Tech Mahindra, Mahindra & Mahindra, Axis Bank, Hindustan Unilever, Tata Motors, Tata Consultancy Services, Bajaj Finserv, Bajaj Finance, Nestle and Titan. In contrast, NTPC, Power Grid, Larsen & Toubro, HDFC, Reliance and HDFC Bank were the gainers.
Finance Minister Nirmala Sitharaman on Tuesday asked banks and other financial institutions to ensure that their customers must update nominees to help resolve the problem of unclaimed money in future. "I want the banking system, the financial ecosystem including the mutual funds, stock markets to keep in mind that when someone deals with his (customer's) money, the organisations will have to think about the future and ensure that customers nominate their heirs, give the name and address," Sitharaman said speaking at the Global Fintech Fest (GFF) in Mumbai. According to a report, the banking system alone has more than Rs 35,000 crore of unclaimed deposits, while the overall quantum of the unclaimed money is said to be more than Rs 1 lakh crore.
Growing up in the Mumbai of 1970s, Uday Kotak aspired to be a cricketer and trained under legendary coach Ramakant Aachrekar. However, it was an on-field injury which resulted in a shift to finance. He started off with bill discounting, turned to lending and successfully applied to start a universal bank in the first decade of the millennium, as India was warming up to private play in banking.
RBI Governor Shaktikanta Das on Wednesday defended the Reserve Bank's handling of the price situation, saying acting prematurely on inflation would have exerted a heavy cost on the economy and citizens. Acknowledging that the inflation target has been missed, Das said the RBI decided to support the economy by not introducing a rate hike in face of a spike in inflation. "We prevented a 'complete collapse of the economy' by keeping rates lower and stayed away from premature tightening," Das said speaking at the annual FIBAC conference of bankers in Mumbai.
The Reserve Bank of India on Wednesday retained its growth projection at 7.2 per cent for the current fiscal on the back of improvement in urban demand and gradual recovery in rural India. Unveiling the third monetary policy for the current fiscal, RBI Governor Shaktikanta Das said the Indian economy remained resilient, and the central bank will continue to support growth. The RBI expects growth in the first quarter of the current fiscal at 16.2 per cent, which will taper to 4 per cent by the fourth quarter.
The highlights of the RBI's fourth monetary policy review of fiscal year 2022-23 announced by Governor Shaktikanta Das.
Following are the highlights of the RBI's first monetary policy statement of 2022-23 unveiled by Governor Shaktikanta Das: Policy repo rate unchanged at 4%; marginal standing facility rate & bank rate too remain unchanged at 4.25%. Monetary stance to be accommodative with focus on withdrawal of accommodation to keep inflation within target. GDP growth projection for FY'23 slashed to 7.2% from 7.8%; growth projections based on assumption of crude oil (Indian basket) price at $100 a barrel during FY'23. Inflation forecast hiked to 5.7% for FY'23 from 4.5%.
Uncertainty is emerging as the only certainty, said RBI Governor Shaktikanta Das as he emphasised on continued policy support at the December MPC meet during which members expressed concerns over spread of the Omicron variant of coronavirus, as per the minutes of the rate-setting panel released on Wednesday. After three days of deliberations, the six members of the Monetary Policy Committee (MPC) on December 8 unanimously voted for status quo on policy rates for the ninth consecutive time. At the meeting, the RBI Governor said risks stalking the global economy have amplified with rapid spread of the virus mutations, including the Omicron variant, leading to countries scrambling for restrictions.
Reserve Bank Governor Shaktikanta Das said on Monday that fair and impartial auditing is essential for a resilient economy as it instils confidence among citizens. Addressing officers at the National Academy of Audit and Accounts, Das said that audit is important for the country as public expenditure decisions are based on these reports. Observing that there is a need to improve the quality and depth of audit, he said the Reserve Bank has taken a host of steps in consultation with the Institute of Chartered Accountants of India (ICAI) for improving the audit of banks and financial institutions.
The Reserve Bank on Thursday said it will come out with a framework allowing borrowers to switch to fixed interest rate from floating interest rate, a move that would provide relief to borrowers of home, auto and other loans reeling under the impact of high interest rate. Unveiling the bi-monthly monetary policy, Reserve Bank Governor Shaktikanta Das said under the framework, to be put in place shortly, the lenders will have to clearly communicate with the borrowers about tenor and EMI. "The supervisory reviews undertaken by the Reserve Bank and the feedback and references from members of public have revealed several instances of unreasonable elongation of tenor of floating rate loans by lenders without proper consent and communication to the borrowers," he said.
'Data-dependence means you can raise or drop rates. The present stance is only for raising rates.'
The Reserve Bank of India on Thursday kept the benchmark interest rate unchanged at 4 per cent and decided to continue with its accommodative stance against the backdrop of an elevated level of inflation.
RBI Governor Shaktikanta Das said that early containment of the pandemic could impart an "upside" to the economic growth outlook.
The Indian rupee, which has depreciated 1.1 per cent so far in August, is expected to decline further on the back of a strengthening US dollar and a weakening Chinese yuan, according to a Business Standard poll of analysts. The Indian rupee hit an all-time low recently, closing at 83.15 per dollar. Five of the 10 respondents said the Indian currency might touch 83.5 per dollar in August itself, while others said the worst could be over.
India decisively withstood global headwinds in 2023 and is likely to remain as the world's fastest-growing major economy on the back of growing demand, moderate inflation, stable interest rate regime and robust foreign exchange reserves. Despite widespread pessimism witnessed among the developed nations and the worsening geopolitical situation, India recorded a gross domestic product (GDP) expansion of 6.1 per cent in the March quarter. The growth moved up to 7.8 per cent in the June quarter and was 7.6 per cent in the September quarter. For the first six months of this fiscal, the growth was 7.7 per cent.
In August, the Reserve Bank of India Governor Shaktikanta Das held a meeting with chief executive officers/ managing directors (CEOs/ MDs) of large non-banking financial corporations (NBFCs). The discussions included diversifying borrowing sources for NBFCs and housing finance companies (HFCs) to contain increasing reliance on bank borrowing, risks associated with high credit growth in retail segment in unsecured loans, prioritising IT upgrades and cyber-security, improving provisioning, monitoring of stressed exposures and slippages, ensuring robust liquidity and asset-liability management, ensuring transparency in pricing, creating robust grievance redress mechanisms.
