'The central bank has highlighted that the slowdown in growth has been limited to a few sectors and overall growth is expected to pick up in the second half of the year.'
The RBI has announced its credit policy last week and auto financiers believe that consumers should 'wait and watch' before the interest rates on auto loans settle down.
Demonetisation of the high value currency notes of Rs 500 and Rs 1,000 did not have any discernible impact on currency in circulation (CIC) in the country, which has soared by almost 83 per cent since its announcement on November 8, 2016. The Supreme Court on Monday upheld the decision of the government on demonetisation. On November 8, 2016 Prime Minister Narendra Modi had announced demonetisation of old Rs 1,000 and Rs 500 banknotes and one of the key objectives of the unprecedented decision was to promote digital payments and curb black money flows.
RBI slashes repo and reverse repo rates to all-time lows.
Within hours of RBI slashing the Cash Reserve Ratio (CRR) by 0.25 per cent, State Bank (SBI) on Tuesday hinted at a likely reduction in lending rates soon.
Bankers on Tuesday ruled out any immediate reduction in lending rates, saying any step in that direction will be determined by the cost of funds.
The Reserve Bank of India, which has already raised the cash reserve ratio (CRR) thrice since December last year, is contemplating another hike, though only on incremental deposits this time.
When costs go down, interest rates will go down, says managing director and CEO Aditya Puri.
The NSE Nifty ended at 3,044, up 158 points. The market breadth was fairly positive with over three advancing stocks for every declining share - out of 2,652 stocks traded, 1,970 advanced, 633 declined and the rest were unchanged today.
The interest rate is the RBI's best bet for keeping the economy close to the 'normality' benchmark.
Real interest rates yet to touch highs witnessed in mid-90s.
The banking system liquidity bounced back to surplus mode after three weeks, the Reserve Bank of India (RBI) data showed. This was due to government spending, according to dealers. The liquidity situation could further ease with the disbursement of the last tranche of incremental cash reserve ratio (I-CRR) worth Rs 50,000 crore on Saturday.
Mukherjee advised European and American policymakers to follow regulatory mechanism on the lines of the Indian banking system.
Experts say the state's economy is grappling with hidden debt, rising welfare costs, and lack of transparency.
Reserve Bank on Tuesday kept the bank rate and CRR unchanged, but hiked repo and reverse repo rate by 0.25 per cent to 5.5 per cent and 6.5 per cent respectively as part of measures to rein in inflation.
Finance Minister P Chidambaram says stock market fall not a cause for worry.
A bill to amend Banking Regulation Act, which will enable RBI to lower the mandatory limits on statutory liquidity ratio for commercial banks, will be introduced in Parliament soon.
The indications are all there but it will still be a few days before banks start raising lending rates that affect your equated monthly instalments (EMI).
In a late Tuesday evening development, RBI raised the repo rate, or the rate at which it lends to banks, by 50 basis points to 8.50 per cent. The cash reserve ratio, or the proportion of deposits kept with the central bank, will be increased by 50 basis points to 8.75 per cent.
Though the Reserve Bank of India decided to reduce the risk weight for home loans between Rs 20 lakh (Rs 2 million) and Rs 30 lakh (Rs 3 million) to 50 per cent, the possible benefit for banks seems to be more than neutralised by 75 basis point rise in cash reserve ratio and increase in the cost of resources, which is linked to yields on government bonds and competition, bankers said.
The Reserve Bank of India on Tuesday hiked the cash reserve ratio by 25 basis points.
"The government has always believed in stable policies. I am sure that this will continue in the coming budget," ICICI Bank's non-executive chairman, K V Kamath, told reporters on the sidelines of a function organised by the Institute of Chartered Accountants of India in Mumbai.
Home loans and consumer goods loans are likely to remain high as the Reserve Bank of India kept its key policy rates unchanged during its Monetary Policy review on Tuesday.
Since the burden of 'reserve' tax has fallen primarily on SMEs as they depend on bank finance, a further hike in its Cash Reserve Ratio will definitely hit the SMEs and small savers.
State Bank of India Chairman Pratip Chaudhuri says though Friday's cash reserve ratio cut will help ease short-term rates, liquidity may continue to be tight and, hence, a further 25-bp (basis point) cut in CRR can be expected.
This is the first official data on inflation after RBI announced its mid-term monetary review in which it raised cash reserve ratio by 50 basis points to suck out excess liquidity. While retaining its forecast for inflation at five per cent this fiscal, RBI lowered its objective for the medium-term to three per cent against 4-4.5 per cent as announced in the last quarterly review in July.
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 Reserve Bank of India (RBI) may opt for a 25 per cent cut in the repo rate, to prop sagging demand in the interest rate-sensitive durables sector in the mid-term review of its 2007-08 monetary policy on October 30.The likely reduction in the repo rate would take place despite concerns about inflation, which suggest that interest rates can be left unchanged, banking sources said.
The MSS limit has been raised from Rs 1,50,000 crore (Rs 1,500 billion) in the current financial year. This is the fourth time the government has raised the limit.
Bankers have said that lending rates could go up to 0.5 per cent after the Reserve Bank's annual credit policy, which is widely expected to take stringent monetary measures to contain price rise. Many expect the central bank to effect a hike in cash reserve ratio (CRR), the rate of amount all commercial banks need to keep with the Reserve Bank, in its annual credit policy on April 29. Many banks, including SBI, had revised their lending rates downwards early this year.
Cash Reserve Ratio (CRR) is the amount of funds that the banks have to keep with the Reserve Bank of India. If RBI decides to increase the percent of this, the available amount with the banks comes down. RBI is using this method (increase of CRR rate), to drain out the excessive money from the banks.
For the last two years, the home loan borrower has been facing the brunt of high interest rates
Industry on Tuesday hailed Reserve Bank of India's softening of interest rates in the Credit Policy 2003-04 and \n\nhoped it would lead to further cuts in lending rates of banks giving enough incentives to spur industrial production.
If India sustains long-term growth, you could make good money off the stock market.
Here are the 10 biggest falls in the Indian stock market history:
The Sensex opened with a negative gap of 260 points to 12,812.
Ahead of its annual monetary policy scheduled next month, the RBI in a sudden move hiked the repo rate and Cash Reserve Ratio** to 7.75 per cent and 6.5 per cent, respectively to suck out about Rs 19,500 crore (Rs 195 billion0 from the system.
The RBI, had, earlier in the day, hiked CRR by 0.75 per cent in two tranches, a move, it said, would help flush-out Rs 36,000 crore (Rs 360 billion) from the system.
