This may free up resources for productive or lending purposes.
The amount is around a fifth of the cumulative investment in fixed assets by these companies.
In addition to interest rates, review the fine print for penalties and repayment terms, and select a reputable lender to avoid harsh recovery practices.
Benchmark policy rate unchanged at 6.75 per cent.
The cost of deposits is on the rise, but banks can't raise interest rate on close to 60% of their loan books, points out Tamal Bandyopadhyay.
The Reserve Bank of India has kept the key short term lending rate (repo rate) unchanged at 7.25%.
The Monetary policy committe comprising 6 members voted 6-0 in the favour of the rate cut.
'We have seen something do very well when the times are good but maybe not as well when the times are bad.'
Talks of a merger between HDFC Bank and parent HDFC Ltd had gained steam nearly eight years ago, when the Reserve Bank of India allowed banks to issue long-term bonds to fund infrastructure and affordable housing. At that time, key executives at both entities denied any such proposal. And today, the merger has been officially announced by the two players.
The Reserve Bank of India (RBI) is likely to keep monetary policy steady in June despite sluggish economic activity as inflation remains elevated, a Reuters poll showed on Wednesday.
Mortgage lender HDFC Ltd on Wednesday announced an increase in its benchmark lending rate by 5 basis points (bps), a move that will make loans dearer for both existing and new borrowers. This is the third hike effected by HDFC in the last one month. "HDFC increases its Retail Prime Lending Rate (RPLR) on housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 5 basis points, with effect from June 1, 2022," the housing finance company said in a statement.
According to fund managers, expectations of a 25-basis-point increase in the cash reserve ratio of banks have heightened in the wake of RBI's surprise twin moves to make short-term money dearer as part of its attempts to curb the rupee's volatility.
When banks deposit their money with RBI, the central bank offers government securities of equal value. But now, it could be running out of enough securities to offer banks against the overnight deposits.
Bond markets, global as well as domestic, are likely headed towards hard times over the next three to six months, as higher vegetable prices, rising fuel costs, and improved wages may keep inflation hot, believe analysts, who expect the yields to hit 7.5 per cent in the near-term from the current 7.234 per cent. In this backdrop, they suggest investors can put in money in funds/instruments with residual maturity of 4 to 6 years, while longer-term investors can allocate cautiously to the longer end in the range beyond 7 years.
Weighed down by a weak rupee, the Reserve Bank on Tuesday chose to keep all key interest rates unchanged and asked the government to take urgent steps to reign in the high current account deficit.
In a mixed bag for HDFC Bank ahead of the parent HDFC's merger with itself, the Reserve Bank of India has declined to make exceptions on certain aspects, and has offered some leeway on others. The country's largest private sector lender, which is aiming to conclude the merger with the home finance major by July, had written to the central bank seeking certain forbearances after announcing the $40-billion merger in April last year. In an exchange filing this evening, HDFC Bank said it received a response from RBI on Thursday and also said that there are a few pending issues.
The broader Nifty also slipped from record by falling 33.15 points at 10,081.50 as investors booked profits.
Based on the current momentum, the funds likely to be raised through the RBI's relaxed window would be $3.5 billion-$4 billion.
Head of state-run Indian Bank T M Bhasin had called for a CRR cut.
The past 18 months have seen a resurgence in the real estate industry, with developers regaining the ground lost to the Covid-19 pandemic. But it is once again adding inventory at a pace faster than sales. The industry's inventory rose by 28 per cent year-on-year (Y-o-Y) in H1FY24, com-pared to a 25.5 per cent year-on-year increase in net sales during the same period.
'Our unsecured loan is not exactly unsecured. It is backed by cash flow of customers.'
Retail depositors are earning negative returns on their bank deposits and hence, there is a need for reviewing taxes on interest earned, economists at the country's largest lender SBI have said. If not for all the depositors, the taxation review should be carried out for at least the deposits made by senior citizens who depend on the interest for their daily needs, the economists led by Soumya Kanti Ghosh said in a note, which pegged the overall retail deposits in the system at Rs 102 lakh crore. At present, banks deduct tax at source at the time of crediting interest income of over Rs 40,000 for all the depositors, while for senior citizens the taxes set-in if the income exceeds Rs 50,000 per year.
RBI has cut policy rate thrice during 2015.
Of the 52 economists polled, 50 expect the policy repo rate to remain at 7.25 per cent, and 47 of 48 respondents see the cash reserve ratio, or the portion of deposits banks have to maintain with the central bank, unchanged at 4 per cent.
The RBI's surprise rate hike may have been prompted by its inability to convince the government to cut excise duty on petrol and diesel and take other supply-side measures to tame runaway inflation, sources aware of the central bank's thinking said on Thursday. There has been a record Rs 10 a litre increase in petrol and diesel prices in a matter of 16 days beginning March 22, which has further fuelled the already high commodity prices. The RBI, which is mandated to ensure inflation is under 6 per cent, acted with a 0.40 per cent increase in repo rate to check prices before they went completely out of hand.
CRR to remain unchanged at 4.00 pc this fiscal
RBI had previously cut repo rate by 0.25 per cent each in January and March.
An action on the rate front is unlikely to figure in Rajan's plan for the moment.
The Reserve Bank Officers Cooperative Credit Society, which caters to the credit needs of RBI officers posted all over India, has a fixed deposit of Rs 105 crore in the bank on which the RBI has placed various curbs for six months following revelations of irregularities.
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Currently, the cash reserve ratio is pegged at a low of 4 per cent, while statutory liquidity ratio that includes securities such as government bonds, stands at 23 per cent, down from 25 per cent in 2010.
Tata Consultancy Services (TCS), the group's biggest cash generator, overtook Vedanta to become the highest dividend payer in India in FY23. The IT services major paid Rs 42,090 crore for FY23, up 167.4 per cent from Rs 15,738 crore for FY22. The 10 biggest payers together shelled out Rs 2.06 trillion for FY23, more than double the Rs 98,371 crore for FY22.
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Chidambaram further said government has taken a number of fiscal and administrative measures from time to time to contain inflation especially food.
The cut in the policy rate by RBI will help lower interest rates
Interest rate on fixed deposits between 7-179 days has been reduced to 7 per cent from 7.5 per cent, SBI said in a statement.
Profitability and cash reserves have halved since the global financial crisis.
Services sector activities improved further and touched a five-month high in April driven by a surge in incoming new work orders that boosted business activity and supported a renewed increase in employment, according to a survey. The seasonally adjusted S&P Global India Services PMI Business Activity Index jumped to 57.9 in April, from 53.6 in March, highlighting a sharp rate of expansion that was the fastest since last November amid mounting price pressures. For the ninth straight month, the services sector witnessed an expansion in output.
The additional measures to check exchange rate volatility comes within 10 days of RBI taking stern steps to suck out liquidity from the system.
Why did the company zero in on RBL Bank to understand the business of banking? While the M&M investors heaved a sigh of relief, one gentleman must have been all smiles after this, RBL Bank MD and CEO R Subramaniakumar, notes Tamal Bandyopadhyay.
All categories of NRI deposits saw net inflows in July.
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