The policy review observed that the moderation in inflation, excluding food and fuel, that was witnessed in the first quarter of 2017-18 has "by and large, reversed".
The Jalan panel has recommended to the RBI to keep shady entities out of banking licence race.
'Normally, the system is geared towards counting notes -- it is equipped to do x amount of work and one day you are asking them to do 20 x.' 'The processes involved are very complex.'
This is contrary to the expectations of a majority of analysts predicting for another hike given the rise in inflation lately, including domestic ratings agency Icra
The RBI now brings in important and contentious changes directly through voluminous Master Directions, or Master Circulars
The year 2022 saw the Reserve Bank of India (RBI) start acting on the policy repo rate after a gap of two years. The six-member monetary policy committee of the RBI reduced interest rate sharply - by 115 bps - when Covid-19 struck in 2020. In March 2020, days after the nationwide lockdown was announced, MPC in an unscheduled meeting reduced the repo rate by 75 bps, followed by another 40 bps in May. Status quo was maintained for the next two years since the May repo rate hike.
The committee headed by RBI's Deputy Governor Usha Thorat made a series of recommendations that include increasing banking penetration and strengthening of Regional Rural banks and Urban Co-operative banks in the region. It said post offices, traditional institutions and NGOs need to be co-opted by the banking industry so as to encourage economic activities.
Terming the RBI action on Wednesday as a "pleasant surprise", analysts today cautioned that possibility of a rate hike in the future cannot be ruled out. Urijit Patel committee's report on monetary policy would clear the air on RBI's future stand, they added.
Mortgage lender HDFC Ltd on Friday hiked its lending rate by 50 basis points hours after the Reserve Bank raised the benchmark interest rate to tame inflation. The move would increase EMIs for housing loans by the firm. "HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 50 basis points, with effect from October 1, 2022," the country's biggest housing finance company said in a statement.
Not only were Urjit and Rajan outsiders, they also hired laterally, bypassing the existing talent, especially in the field of economics
Retail inflation crossed the RBI's comfort level and rose to 5.21 per cent in December on increase in prices of food items.
Reserve Bank of India (RBI) Executive Director Anand Sinha is set to replace Usha Thorat as deputy governor. Finance Minister Pranab Mukherjee has recommended Sinha's candidature to the Appointments Committee of the Cabinet (ACC).
The repo rate, at which the central bank lends short-term money to other banks, will continue to stay at 6 per cent.
A likely easing in inflationary pressures in the forthcoming months will reopen the window for the RBI to once again prioritise growth and ease its interest rates.
The windfall from RBI may be used to trim borrowing, help fund Rs 3.3 lakh crore capex plan, capitalise banks and provide fiscal stimulus to some stressed sectors, experts and economists said.
Demonetisation to result in short-run disruptions in cash-intensive sectors like retail, hotels, restaurants and transportation, RBI said while announcing the Monetary Policy
'Rate cut should reiterate RBI's commitment in providing confidence to consumers and small business.'
A Reserve Bank panel has decided against the inclusion of any other national leader's image on banknotes saying that no other personality could better represent the ethos of India than Mahatma Gandhi.
Currently, banks follow system of internal benchmarks, including Prime Lending Rate, Benchmark Prime Lending Rate, Base rate and Marginal Cost of Funds based Lending Rate.
The SBI report ruled out a October rate hike
RBI wants periodic revision of the pensions for its retired employees.
'The no-rate cut policy and preference to wait for the Budget and clarity on the fiscal front demonstrate RBI Governor Shaktikanta Das is maturing in his new role,' notes Tamal Bandyopadhyay.
The imported inflation component is also expected to ebb on lower oil prices and softer US dollar, it said.
'If the RBI board forces the management's hand on all the key issues, it should be prepared for resignations by the governor and the key deputy governor, Viral Acharya,' warns T N Ninan.
The Financial Inclusion Advisory Committee under RBI Deputy Governor K C Chakrabarty is expected to suggest appropriate regulatory framework to ensure that financial inclusion and financial stability move in tandem, the RBI said in a statement.
The Reserve Bank's rate-setting panel will start its 3-day deliberations on Wednesday amid expectations of yet another rate hike of 50 basis points to check high inflation, in line with similar actions taken by other major central banks, including the US Fed. Based on the recommendations of the Monetary Policy Committee (MPC), the RBI had effected 50 basis points increase in repo rate each in June and August after raising the short-term lending rate by 40 basis points in an off-cycle decision in May. The MPC, headed by RBI Governor Shaktikanta Das, is scheduled to meet during September 28-30.
However, it may still not change its stance on the policy rate as inflationary pressures are coming from high commodity prices.
There was no word on whether or when Patel would be talking to the media about his priorities and plan of action as head of Mint Street
The RBI is not statutorily independent from the government but has long enjoyed wide latitude
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.
A committee headed by Patel recommended retail inflation targeting and a monetary policy committee.
At least a 25 basis points hike can be expected on the October 5 policy
Two months before the microfinance sector crisis in October, an internal committee of the Reserve Bank of India (RBI) had warned of possible problems in the sector.
Retail inflation fell to a 15-month low of 5.66 per cent in March, mainly due to a decline in food prices, government data showed on Wednesday. The inflation figure in March is within the RBI's comfort zone as it is below 6 per cent. The retail inflation based on Consumer Price Index (CPI) was 6.44 per cent in February 2023 and 6.95 per cent in the year-ago period.
The Reserve Bank remains laser-focused to bring back retail inflation to 4 per cent over a period of time in a non-disruptive manner, Governor Shaktikanta Das stressed while voting for status quo in interest rates, as per minutes of the October policy meeting released on Friday. The central bank has been mandated by the government to ensure the Consumer Price Index (CPI) based inflation is at 4 per cent, with a band of 2 per cent on either side. The retail inflation, which was above 6 per cent during May and June, has started moving down and stood at 4.35 per cent in September.
In a tightening cycle, a premature pause in monetary policy action would be a costly policy error, Reserve Bank Governor Shaktikanta Das opined while voting along with five other members of the MPC for raising the key lending rate by 35 basis points earlier this month, according to the minutes of the meeting released on Wednesday. Prior to the December hike in repo rate, the RBI had raised the key short-term lending rate by 190 bps in four tranche.
The Congress on Monday promised that a government led by it will conduct a nationwide caste census and implement 33 per cent reservation for women in the Lok Sabha and state legislative assemblies at the earliest, including adequate representation for women belonging to the OBC community.
In the past few years, banks have been reducing the spread of retail loans for new customers while keeping the base rate unchanged.
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