Banks get bonds boost to raise funds for core sector; up to Rs 50 lakh of home loans in metros and Rs 40 lakh in other cities not to have CRR, SLR requirements
RBI Governor Raghuram Rajan expressed anguish at the banks' reluctance to pass on benefits of the earlier rate cuts.
The Reserve Bank of India will provide foreign exchange liquidity to foreign branches and subsidiaries of Indian banks through currency swaps.
Market breadth turned negative with 1,779 declines over 884 advances on the BSE
An initial reading of the guidelines indicates two factors - potential rise in borrowing cost and lower returns on investment book - could hit the spread of NBFCs.
An NBFC must actively manage its collateral positions, differentiating between encumbered and unencumbered assets, and monitor such assets so that they can be mobilised in a timely manner, central bank says in circular.
Banks led the decline with Nifty Bank and BSE Bank index dropping over 3% each.
The main reason was that CPI inflation would likely remain below 4 per cent till July.
The Reserve Bank of India kept interest rates on hold at 7.50 per cent.
A reading below 50 means contraction in the sector.
RBI Governor has been under pressure from Finance Ministry.
Economy improving but long way to full recovery, says FSDC.
SBI Research has projected the Indian economy to grow at 7.5 per cent in 2022-23, an upward revision of 20 basis points from its earlier estimate. As per official data, the economy grew by 8.7 per cent in FY22, net adding Rs 11.8 lakh crore in the year to Rs 147 lakh crore, the report said, adding this was however only 1.5 per cent higher than the pre-pandemic year of FY20. "Given the high inflation and the subsequent upcoming rate hikes, we believe that real GDP will incrementally increase by Rs 11.1 lakh crore in FY23. "This still translates into a real GDP growth of 7.5 per cent for FY23, up by 20 basis points over our previous forecast," SBI chief economist Soumyakanti Ghosh said in a note on Thursday.
The problem for the NBFC sector is the funding inertia by banks and not lack of funds.
Calling out the high real interest rates -- the differential between the policy rate and headline inflation -- as an impediment to investment, the SBI report said the RBI can cut rates by 0.35-0.50 per cent at its next policy announcement.
RBI's status quo on rates disappoints economists.
As liquid tightening measures were likely to be temporary, any change in lending rates would depend on the length of these measures, according to bankers.
Record liquidity infusion by the central bank in the banking system during the financial year 2020-21 amid sluggish economic activity resulted in banks investing more in safe government papers than in extending loans, data from Reserve Bank of India (RBI) showed. This trend has not been seen in nearly two decades, barring 2016 - the year of demonetisation.
India's banks rely on overnight borrowings to fund longer-term lending.
'When an institution believes its knowledge and capability is superior to everyone, it behaves like a frog in the well.' 'And this is precisely the cause for the mess,' says J N Gupta.
The balance sheet of the Reserve Bank plays a critical role in the functioning of the country's economy.
Banks and exporters preferred to reduce their dollar position in view of its weakness.
The IL&FS management is also talking to its second-largest shareholder, Orix Corporation of Japan, to infuse more funds into the company - in case any shareholder backs out during the rights issue.
Focus to be on unbanked areas; initial capital is set at Rs 100 crore; India Post can apply.
RBI said inflation in the second half of the current fiscal is projected at 2.7-3.2%. It retained its GDP forecast for the current fiscal at 7.4%
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The committee's suggestion that existing commercial banks be allowed to hold payment banks as subsidiaries is also seen as unviable by RBI and the finance ministry.
With enough liquidity in the system, lending and deposit rates are likely to fall further
This development can strengthen the case for interest rate cut by the RBI.
Banks normally park almost 27 per cent of their funds in government securitie.
Banks want lower provisioning burden on recast debt, interest on cash reserve ratio deposits.
As we say shalom to 2016, the key drivers for the markets in the year ahead have become more obvious, says Neeraj Gambhir, managing director and head of fixed income, India, Nomura. First, there is a surging dollar. Second, rising commodity prices. Then, we have the effects of demonetisation.
The ministry seeks to make lending requirements flexible for banks financing key stalled projects.
Morgan Stanley expects RBI to cut rates sharply rather than "dribble down".
Assocham expressed concern over the precarious situation that the manufacturing sector is in, observing that if the trend does not reverse with monetary and fiscal measures it would be difficult for the industry to generate jobs.
The implementation of MCLR from April 1 has already led to a rate cut of 10 basis points on home loans by the country's largest bank, State Bank of India, and others.
The Reserve Bank of India (RBI) announced new rules for credit cards, applicable from July 1. "These directions cover the general and conduct regulations relating to credit, debit and co-branded cards which shall be read along with prudential, payment and technology & cyber security related directions applicable to credit, debit and co-branded cards, as issued by the Reserve Bank," the circular by RBI said. Business Standard culled out key rules from the list, and asked financial experts for advice on them, along with the thumb rules one needs to follow while using credit cards.
Nifty saw the biggest weekly gain since the first week of September and comfortably maintained its crucial 8250 levels in today's session
'There will be positive growth, but if you ask me whether we are going to have the original growth rate of 8%, the answer will be, no.'
India's manufacturing PMI rose to 54.5 in December, 2014, while in the corresponding period a year ago it stood at 50.7, just above the crucial 50 mark which separates growth from contraction.
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