The RBI has, however, left the cash reserve ratio or bank rate, which is the amount of cash that banks have to park with the central bank to maintain prudential norms, unchanged at 6 per cent.
The bank kept cash reserve ratio unchanged at 6 per cent.
HDFC chairman Deepak Parekh on Monday said harmonisation of rules between banks and non-banks which reduces the regulatory arbitrage was one of the key factors which influenced the decision for merger between the largest home financier and HDFC Bank. Parekh, who said the merger discussions have happened over the last three weeks, noted that requirements like non performing asset recognition being at par and size-based regulations for non-bank finance companies are among the changes in landscape. Addressing a press conference after the surprise announcement earlier in the day, Parekh said the last three years have seen harmonisation in the regulations which reduce the "regulatory arbitrage" of running a separate home finance company.
Prime Minister's Economic Advisory Council Chairman C Rangarajan on Tuesday called RBI's policy action a "wise decision". The liquidity easing measures will have an impact on interest rates, he said.
What impact will this hike in RBI rates have on the banks and industries? What do the bankers have to say? How is India Inc reacting to the rate change?
The central bank kept cash reserve ratio unchanged at 4 per cent.
The Reserve Bank of India (RBI) may not go in for key policy rate cuts in its quarterly policy review slated for January 23, said a senior finance ministry official.
ICICI Bank Chairman K V Kamath on Thursday disagreed with the suggestion of SBI chief Pratip Chaudhuri that RBI should scrap CRR, saying it is part of the monetary policy and no issue can be made of it.
The Reserve Bank will present the mid-quarter Monetary Policy Review on Tuesday.
The Reserve Bank of India has kept all key interest rates unchanged in its mid-term credit policy review announced on Monday.
Interest rates are not expected to go up immediately even as the Reserve Bank of India on Tuesday announced a fresh 25-basis-point hike in the cash reserve ratio (CRR), the amount of cash banks must keep with the central bank, in its Annual Policy Statement for 2008-09. The impact is, however, expected to be marginal as bankers talked about keeping lending rates stable for the time being due to sufficient liquidity in the system. The move will absorb around Rs 8,000 crore.
Snapping its six-day losing streak both benchmarks rallied over 1% after RBI kept key policy rates unchanged.
Banks to lower rates shortly; RBI cuts CRR by 25 bps and signals easier policy in October
Banks to lower rates shortly; RBI cuts CRR by 25 bps and signals easier policy in October
From the Sensex pack, IndusInd Bank, NTPC, Asian Paints, Hindustan Unilever, JSW Steel, Tech Mahindra, Bajaj Finance, Infosys, Wipro, ICICI Bank, Bajaj Finserv, HDFC Bank and Tata Motors were among the major laggards. HCL Technologies, Power Grid, Titan, Reliance Industries, UltraTech Cement, Tata Steel, State Bank of India and Mahindra & Mahindra were the gainers.
Industry houses are emphatic with the RBI pruning repo rate and CRR by 0.25 per cent each after a long nine months in its third quarter monetary policy review.
Hailing Reserve Bank's decision to cut key rates, Plan panel on Tuesday said it would boost investments and hoped the measures will have significant effect on long term borrowing rates.
While the rupee snapped a four-session downslide, it rupee could not cement intra-day gains as RBI kept short-term lending (repo) and cash reserve ratio unchanged, forex dealers said.
The Reserve Bank has kept the key policy rates unchanged in its Mid-Quarter Monetary Policy Review.
The Reserve Bank of India on Thursday hiked the cash reserve ratio (CRR), the amount of depositors' money that banks need to park with it, by half a per cent to tighten money supply, as part of concerted efforts with the government to ease inflation.The hike, which would take CRR to 8 per cent, will come into effect in two tranches of 0.25 per cent on April 26 and May 10.
The Reserve Bank of India's (RBI's) decision to withdraw the incremental cash reserve ratio (I-CRR) is expected to benefit banks during the festival season. They are likely to increase deposit rates by up to 25 basis points (bps) in select maturity buckets. The rise in demand for funds to cover tax payments and meet quarter-end business targets could influence rate decisions by banks, according to bankers and money market executives.
Of the 15 participants, 7 expect CRR cut, only one sees repo rate reduction.
They feel reducing policy rates will help to boost production and revive the economy.
High inflation continues to be an obstacle in lowering policy rates as of now.
The currency in circulation (CIC) declined by Rs 7,600 crore in the Diwali week, making it the first such happening in two decades, a report said on Thursday. This was made possible courtesy of a greater reliance on digital payments by people, the report by economists at SBI said, adding that the Indian economy is undergoing a structural transformation at present. They clarified that the Diwali week in 2009 had also witnessed a marginal Rs 950 crore decline in currency in circulation, but that was purely due to the economic slowdown amid the global financial crisis.
The central bank held the cash reserve ratio at 4 per cent.
SBI too rules out cut in base rate in short term, to launch concessional schemes.
Chidambaram welcomes CRR cut as a good small step forward.
Some reactions to RBI's monetary policy announced on Monday.
Real estate developers said on Tuesday that RBI's decision to cut cash reserve ratio will help improve the liquidity position of various sectors, including realty, but felt that interest rates should be brought down to boost housing demand.
The Reserve Bank of India has been actively doing OMOs or buyback of government bonds to manage liquidity in the system over the last few months.
The Reserve Bank has decided to keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of their net demand and time liabilities and keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.25 per cent.
The Reserve bank of India has kept the repo rate and reverse repo rates unchanged in its mid-quarter review of monetary policy announced on Thursday.
To ease liquidity situation, the Reserve Bank today slashed CRR -- the portion of deposits banks are required to keep with the central bank -- by 0.75 percentage points, a step that will infuse Rs 48,000 crore (Rs 480 billion) into the economy.
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