How will the RBI announcement on loan moratorium work for those with home loans, auto loans, personal loans, consumer durables loan? Here's what experts have to say.
The worst may perhaps be over for these stocks, suggests Sanjay Kumar Singh.
Given the various risks to growth, one could argue for rate cuts to be deeper than the 5 per cent terminal repo rate that we are projecting at this stage, says Kaushik Das.
Analysts believe that new companies getting into banking space will look at acquiring old private banks. Following this view, there has been a significant rally in banking stocks.
From auto, refrigerator, and mobile handset makers to real estate firms, companies are tying up with banks to dole out attractive finance schemes and discounts to make buying more affordable.
Discussion paper fixes Rs 1,000 cr as minimum capital for these specialised banks
Top commercial banks offer 8.5-9 per cent interest rates a year on fixed deposits with maturity of 2-3 years.
For big amounts, loan against property is cheapest; for small ones opt for loan against insurance policy or FDs.
Regulator probing jewellery houses for violation of collective investment scheme rules, says Shrimi Choudhary.
'Real estate loans are given in the garb of retail loans, sourcing money cheap from the NHB refinance window.' 'This loophole is being plugged,' notes Tamal Bandyopadhyay.
There was no relief for existing home buyers who are stuck in stalled projects and are paying both rent and EMI on their home loans.
Asian Development Bank on Wednesday lowered India's economic growth forecast for FY2019 to 5.1 per cent on slowing job prospects, rural distress exacerbated by poor harvest and credit crunch. Growth in FY2020 is likely to recover thanks to this support, low oil prices, and a weakening rupee, but risks to the projections remain tilted to the downside, it said on India.
'When growth drops precipitously from 7% to 4.5% in four quarters, it is for all practical purposes a recession' notes T N Ninan.
Due to the prevailing uncertainty, the risk of loans going bad has certainly increased. This may result in lenders following risk-based pricing more diligently, notes Naveen Kukreja, CEO, Paisabazaar.com
Such cold-shoulder by banks also indicates a credit freeze that is hard to overcome, unless the government comes out with credit guarantee schemes for loans given by banks. Since that is not happening, and there is no indication of that too, banks are not willing to listen to RBI prodding.
The bosses of SBI, Union Bank and Central Bank have been driving down to their offices everyday to take stock of the biggest loan drive ever undertaken for MSMEs, discovers Tamal Bandyopadhyay.
As share of cash volumes in trading mix sees decline, it will result in moderation of profitability from core broking operations.
An analysis of past 20 years' demand cycles done by Edelweiss Securities indicates that the auto sector is currently in the middle of a down cycle. Volume recovery, they say, is unlikely to be as sharp as in the past, unless there is strong fiscal support.
The pros and cons of investing in gold coins and bars, jewellery, gold ETFs and gold mining stocks.
Reserve Bank of India Governor Shaktikanta Das on Friday said the central bank will ensure adequate liquidity in the system to ease the financial stress caused by the Covid-19 pandemic. The central bank reduced the reverse repo rate -- the rate at which banks park their fund with the central bank -- by 25 basis points to 3.75 per cent.
The government's Rs 20.97 lakh crore COVID-19 package lacks in addressing the immediate concerns of the economy as the actual fiscal impact of the additional stimulus is only about 1 per cent of the GDP as opposed to the claim of 10 per cent, Fitch Solutions said on Tuesday. Prime Minister Narendra Modi on May 12 announced a stimulus package of Rs 20 lakh crore, or nearly 10 per cent of GDP, to deal with the economic fallout of COVID-19. The contents of the package were broad-based and announced in five tranches.
The NDA government will be following the footsteps of its predecessor, the UPA, which had introduced the concept of "loan mela" to boost credit by directing banks to lend to people through public meetings.
'We get to know secrets such as some of India's top-rated firms do not always make payments when due and many State-owned, listed, enterprises that borrow in bond markets default regularly.' 'Without naming the bank, he says that ever-greening of poor loans by a part of India's shadow banking lay at the doorstep of India's banking, notably 'one private bank'.' Viral Acharya's Quest for Restoring Financial Stability in India won't be music to many ears, observes Tamal Bandyopadhyay.
The decline is attributed to lower salary growth and a rise in households' financial liabilities.
The break-up of Financial Development Index showed that India ranked 9th in non-banking financial services and capital markets tracked by the index, but the country lost out in terms of banking financial services standing at 45th place.
In the first eight months of 2019, 70 per cent stocks in the BSE 500 universe were down. These stocks account for 94 per cent of India's total market capitalisation.
The polls are being viewed as a run-up to the general elections scheduled for May 2019 and will test the popularity of the government and its policies amid rising crude oil prices
Regulator wants to change NPA classification and hike capital requirement.
'It may sound like sacrilege, but does it really matter if the global raters downgrade India for fiscal slippage?' asks Tamal Bandyopadhyay.
With liquidity crunch hitting operations, many finance companies have put the brakes on sanctions in the third quarter in the aftermath of the IL&FS crisis.
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Stating that there are strong inter-linkages between banks, NBFCs and other deposit-taking entities, he said for monetary policy to be effective and financial markets to remain stable, they should be regulated by the central bank.
'People who have unaccounted money often park it in unregulated deposit schemes.' 'Curbing illegal deposit-raising activity will also carry forward the government's drive against black money.'
After banks, it is now the turn of non-banking finance companies (NBFC) to see a spike in loan defaults and provisioning for non-performing assets ( NPAs ).
The government is the biggest consumer and investor in the economy. And once it starts cutting back on expenditure to bring down fiscal deficit, it will affect corporate earnings.
This payment of Rs 962 crore is inclusive of the Rs 500 crore DHFL received from exiting its entire stake in subsidiary firm Aadhar Housing Finance Ltd.
The reform priorities are clear: enhance savings, improve productivity. Just 25 basis points of moving interest rate up or down would not boost investment: Former RBI Governor Y V Reddy.
Moody's said the government will face challenges in achieving its deficit target for the fiscal year ending March 2021, amid persistent structural and cyclical headwinds to growth.
Under Section 71 of the legislation, which took effect this month, corporate bond issuers have to create a debenture redemption reserve equivalent to at least 50% of a planned bond sale before the maturity of the security.
Draft guidelines for Small Banks and Payments Banks were issued by the RBI in July and comments were invited till August 28.
