Country's leading housing finance company HDFC chairman Deepak Parekh said on Friday that he expects interest rates to soften by 0.25-0.50 per cent if there is no hike in the cash reserve ratio.
Most money market players expect the Reserve Bank of India to keep key interest rates unchanged in its annual policy statement for 2005-06 (April-March), to be unveiled on April 28.
Growing concerns over slower-than-expected margin recovery, amid weak deposit growth have caught HDFC Bank's investors off guard. HDFC Bank's stock on Wednesday plunged nearly 9 per cent to hit an intraday low of Rs 1,527 on the BSE after reporting weaker-than-expected earnings in the third quarter (October - December) of the current financial year (Q3FY24). The shares of India's biggest private lender closed at Rs 1,536.9, down 8.46 per cent.
Global rating agency S&P forecast on Tuesday a slowdown in Indian economy to 8.6 per cent this fiscal due to high interest rates and appreciating rupee but expected no change in key rates and cash reserve ratio in RBI's credit policy on October 30. But the strong domestic demand would ensure that India maintains high growth. The moderation from last year's 9.4 per cent to 8.6 per cent this year therefore reflected a soft landing, S&P said in its mid-year review.
The Reserve Bank of India is likely to take a call on the relaxations sought by HDFC Bank in relation to the merger, as the date of merger draws closer, sources said. The HDFC twins, which announced their decision to merge in April last year, received National Company Law Tribunal's (NCLT's) approval recently - a key milestone to close the deal in due time. The management of both the entities had said that it will take 15-18 months for the merger.
Liquidity is expected to remain comfortable this week, albeit the rate at which it is available may inch up rather than remaining below 1 per cent.
Aggressive buying towards the end saw the index zoom to a high of 15,569 - up 344 points from the day's low. The Sensex finally ended with a smart gain of 290 points at 15,551.
When interest rates rise, so does the EMI of your home loan. There are two ways in which you can deploy surplus funds to reduce the EMI. For maximum benefit, you can combine the two options.
Our financial system, by any reckoning, is fragile, which is why the RBI is intervening.
The key short-term lending rate (repo rate)has been hiked by 0.25 pc to 7.50 pc.
The global brokerage firm believes that CRR cut is likely to help cut lending rates and revive growth sentiments.
Exiting income funds at this stage and booking losses might prove to be the perfect recipe for disaster.
The following are the highlights of the mid-term review of Monetary and Credit Policy for the year 2003-04.
Breaking the streak of continuous fall in outstanding amounts, non-resident Indian (NRI) deposits rose for the first time in the financial year to $134.54 billion in October 2022. The figure was $133.67 billion in September. Reserve Bank of India (RBI) data showed that NRI deposits were in shrinking mode for the first six months of FY23. They fell to $133.67 billion in September from $139 billion in March.
Even as the market continued steady, key tech stocks slipped into the red after a solid start in the morning. But the market was held up by buying in Old Economy and defensive sector stocks.
Short-term lending rate unchanged at 7.75 pc.
However, fresh buying at lower levels helped the index recover all its losses by mid noon trades. A fresh round of buying in late trades saw the index surge to a high of 14,249 - up 518 points from the days low. The Sensex finally settled with a gain of 113 points at 14,220. The NSE Nifty ended with a gain of 60 points at 4,251.
For over a decade, HDFC Bank consistently outperformed industry growth rates in both deposits and advances, maintaining impeccable asset quality. Amid a landscape where other banks struggled with soaring non-performing assets (NPAs), HDFC Bank thrived, eventually surpassing ICICI Bank to become the largest private sector lender in India. Its net interest margin (NIM) remained stable in the range of 4.1-4.4 per cent.
After falling substantially in the previous week, inflation rose marginally by 0.06 per cent to 7.87 per cent for the week ended September 11 mainly due to costlier manufactured products including some edible oils.
Inflation target remains 5% for January 2017.
'There are occasions when the prices of individual items like food raise inflation; then supply-side measures must be taken.' 'But if there is continued inflation, it means liquidity is aggravating the situation.'
HDFC Bank on Monday reported a consolidated net profit of Rs 16,811 crore for the September quarter, its maiden quarterly earnings announcement after merging parent HDFC with itself. On a standalone basis, the largest private sector lender reported a net profit of Rs 15,976 crore. In the year-ago period, the net profit of the merged entity would have been Rs 11,162 crore on a consolidated level while the same on a standalone basis would have been Rs 10,606 crore.
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.
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SBI Chairman in the last year's banking conclave had started a debate by seeking to abolish cash reserve ratio to enhance liquidity in the banking sector for more productive use.
After hiking the repo rate by 0.50 per cent, RBI Governor Shaktikanta Das on Wednesday said future policy actions by the central bank will be guided by the evolving conditions. Addressing a press conference, the governor said the RBI has changed the policy stance to drop the phrase "remains accommodative", and instead opted for "withdrawal of accommodation" for guiding its future moves. The central bank did not hike the cash reserve ratio contrary to speculation, he said, adding that the liquidity withdrawal will be calibrated and measured.
'Investors' decisions should reflect their financial goals, risk tolerance, and the amount of gold already present in their portfolio.'
State Bank of India (SBI) may carry out a planned Rs 10,000 crore sale of infrastructure bonds in the market this week, with the securities likely to be of 15-year maturity, sources told Business Standard. SBI, the country's largest bank, had last week said its board had approved the issuance of infrastructure bonds in the current fiscal year. It, however, had not mentioned the maturity of the bonds or when the sale would take place.
The use of RBI capital to strengthen public sector banks will have many positive implications for the economy -- and a few manageable downsides, points out R Jagannathan.
The central bank was widely expected to maintain status quo.
India Inc's cash pile was up 13.8 per cent last fiscal year, thanks to a combination of higher profits in sectors such as IT and fund raising by top companies such a Reliance Industries, Bharti Airtel and Tata Motors, among others.
HDFC Bank expects to amalgamate its home loan major parent HDFC into itself by September next year, a top official said on Friday. Both HDFC and HDFC Bank held general meetings on Friday to seek shareholder approvals for what is billed as the largest merger in Indian corporate history at over $40 billion. At the time of announcing the merger on April 4 this year, the entities had said the merger will take 12-18 months.
Next bi-monthly policy statement on September 30.
Financial markets are under stress and require steps by the central bank for market stability and revival of economic growth, he said while announcing the decisions taken by the Monetary Policy Committee in Mumbai.
Highlights of RBI's third quarter review of monetary policy.
Investors need to carefully assess country-specific risks. 'This is especially true of a market that is less transparent than the US.'
The Reserve Bank is expected to go for another rate hike of 0.40 per cent at the scheduled review of the monetary policy next week, a foreign brokerage said on Friday. The central bank's rate setting panel will follow it up with a 0.35 per cent hike in rates at the next review in August, or make it into a 0.50 per cent hike next week and a 0.25 per cent increase in August, to make the total quantum of rate hikes at 0.75 per cent, the report by Bofa Securities said. On May 4, the Reserve Bank of India (RBI) hiked rates by 0.40 per cent, and Governor Shaktikanta Das has already called a rate hike at the forthcoming review as a "no brainer" given the pressure to maintain its core mandate of inflation in the targeted band of under 6 per cent.
This may free up resources for productive or lending purposes.
Investors looking for a fixed-income product that is free of credit risk may invest in these bonds.
The amount is around a fifth of the cumulative investment in fixed assets by these companies.
