The Reserve Bank of India's retail direct scheme is off to a good start but the central bank itself sees it as an additional avenue and not an alternative to the existing one. Still, a reasonable expectation is to have at least 100,000 investors within a month of it being operational, and that could be well under way, if the latest trend is to sustain. The registration in the retail direct platform has crossed 35,000.
Prime Minister Narendra Modi will on Friday launch two schemes of the Reserve Bank of India (RBI) that may go a long way in changing how the household sector invests, and complains if anything goes wrong with their savings. These schemes - retail direct and an integrated ombudsman - will be launched by the Prime Minister virtually, in the presence of Finance Minister Nirmala Sitharaman. With the introduction of retail direct, a common man can directly take a position in government securities (G-Sec), considered to be the safest asset class a sovereign can offer.
'We are staying away from making forward-looking statements on when we will reach 1 trillion, etc. But growth will be rapid; it's only a matter of time.'
The introduction of tax deducted at source (TDS) on income from central government securities and state bonds may not lead to a significant effect on retail participation, according to market participants. The Union Budget proposed that starting October 1, 2024, investors may face a 10 per cent TDS on investments in central government securities and state development loans (SDLs). "Last Budget, TDS on interest on securities was reintroduced.
When investing in fixed-income products, balancing considerations like safety, liquidity, and income is essential.
In response to the panic triggered by Trump's trade policies, the RBI net sold approximately $43 billion in the second half of FY25 to curb volatility, as the rupee plunged to a low of 87.95 per dollar in February this year.
Finance Minister Nirmala Sitharaman's biggest challenge will be to find a new growth driver, particularly against the backdrop of a global economy ravaged by heightened uncertainty and fragmentation, financial markets on a precipice, and global commodity prices on a continued uptrend.
To provide more choices to customers, the Reserve Bank of India has suggested mandating bank and non-bank card issuers to issue debt, credit and prepaid cards on more than one network. Customers can choose any one either at the time of issue of the card or anytime later, according to draft norms released by the Reserve Bank of India on Wednesday. The RBI said card issuers would also be barred from signing agreements that limit their ability to tie-up with other card-networks, according to the draft.
Non-banking entities such as fintech firms will have to tap into use cases beyond peer-to-peer (P2P) and peer-to-merchant (P2M) transactions to scale up the presence of the retail version of the central bank digital currency (CBDC), which is also known as the e, said industry players. These use cases will enable programmable transactions across domains, including the government's direct benefit transfer (DBT) schemes, with subsidies restricted to specific purposes such as food coupons, hospital bills, fertilisers, pesticides, and cross-border remittances.
Be wary of co-operative banks which have historically been most vulnerable.
Here's what Indian investors diversifying into equities, ETFs, and real estate abroad to manage risk, returns, and currency exposure must watch out for.
Investors not comfortable investing directly may take the mutual fund route, where they get exposure to a diversified portfolio of bonds.
Here are the highlights of the monetary policy announced by RBI governor Shaktikanta Das on Friday.
GDP growth of 7.7 per cent in the first half of this fiscal has "left sceptics gasping and woefully behind the curve", an RBI article said on Wednesday. It also stressed the buildup in the growth momentum is likely to be sustained. The article on the state of the economy published in the Reserve Bank's December Bulletin on Wednesday also said CPI-based retail inflation is expected to ease to 4.6 per cent in the first three quarters of 2024-25 from 5.6 per cent in November.
Investors looking for a fixed-income product that is free of credit risk may invest in these bonds.
'That way you're not hostage just to US sort of exports to India.'
Indices across Indian equity markets have edged towards new record highs before undergoing a small correction in the past few sessions. The National Stock Exchange Nifty has gained 20 per cent in the past year; mid-caps (up 33 per cent), small-caps (up 31 per cent), and micro-caps (up 44 per cent) have done better. Several factors have precipitated this rally.
According to Fitch, the scheme could open a window for banks to build capital buffers while putting off full recognition of COVID-19 pandemic's impact on loan portfolios, but is reminiscent of a strategy adopted over 2010-2016 that delayed and exacerbated problems for banks.
Observing that MSME sector plays an important role in the growth of the Indian economy, RBI said the restructuring of the borrower account has been extended by further one year to March 31, 2021.
The Urjit Patel committee on monetary policy framework has proposed setting up of a monetary policy committee (MPC) that will be headed by the Reserve Bank of India (RBI) governor and accountable for achieving inflation target set by it.
The Reserve Bank of India (RBI) on Friday decided to leave the benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance, implying rate cuts in the future if need arises to support the economy hit by the Covid-19 pandemic.
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After making a larger-than-expected cut of 50 basis points on September 29, Rajan urged the federal government to do its bit to accelerate growth through structural reforms.
Delays in returning money for disputed transactions have also come under RBI's scanner.
The continuing stress faced by corporate India has weakened their debt-servicing capability and this is reflected in the banks' books, as yet-burgeoning bad loans.
If you are buying a bond to cater to your regular income needs, check the interest distribution schedule.
The RBI has this year cut interest rates by 110 basis points in four instalments but banks have passed only a part of it to borrowers. Before the last reduction earlier this month of 35 basis points, the bank on an average had passed only 29 basis points out of 75 basis points cut affected during 2019.
Here's what could be ahead for India: A $10-trillion economy by 2030-32, a Sensex at 1,00,000 by 2025, monthly GST revenues at Rs 2 trillion by 2024-25, 100 new unicorns by 2025, and poverty below 5 per cent by 2030, predicts R Jagannathan.
SBI was the top gainer in the Sensex pack, rallying over 10 per cent, followed by Kotak Bank, Dr Reddy's, UltraTech Cement, ITC and HDFC Bank. On the other hand, Axis Bank, Bharti Airtel, ICICI Bank, Maruti and HCL Tech were among the laggards.
The central bank tweaked the retail inflation range to 4.8-4.9 per cent in the first half of 2018-19, and 4.7 per cent in the second half.
Both the RBI and the central government should see that the transmission of the rate reduction by the banks happens soon, otherwise the whole exercise is futile, says Subramanian MV.
From March 3, investors in India will be able to trade in select US stocks through the NSE International Exchange (NSE IFSC), a wholly owned subsidiary of the National Stock Exchange (NSE). Investors can invest in NSE IFSC receipts on US stocks, which will be in the form of unsponsored depository receipts (DRs). For a start, this will include DRs of 50 US stocks such as Apple, Alphabet, Amazon, Tesla, Microsoft, Morgan Stanley, Nike, P&G, Coca-Cola, and Exxon Mobil. Indian retail investors will be able to transact on the NSE IFSC platform under the Liberalised Remittance Scheme (LRS) limits prescribed by the Reserve Bank of India (RBI), which currently stand at $250,000 per year.
Payment banks may not be viable option to attain financial inclusion.
'My wife, family members as well as members of the workers will be trustees.' 'The trust will take all decisions -- no family member can individually take any decision.'
The economic survey for 2020-21 has suggested revision in the weightage of food items to gauge the true picture of inflation in the country, and said new sources of price data also need to be incorporated in the wake of increasing retail e-commerce transactions. As per the survey, the current spike in consumer price-based retail inflation of food prices is mainly a supply-side phenomenon. The survey noted that the weights of all items in retail inflation are based on the NSO household consumption expenditure survey of 2011-12, adding the weight of food items in the index might have significantly decreased over the decade since then.
'The actions of Indian monetary authorities will depend on how quickly they want the inflation to come down to 4 per cent.'
A series of steps taken by the government to promote ease of doing business and liberalisation of foreign direct investment norms have helped India receive record FDI inflows so far this year, and implementation of measures like PM Gati Shakti, single window clearance and GIS-mapped land bank are expected to further push investments in 2022. Notwithstanding the global slowdown and the COVID-19 pandemic, total foreign direct investments into India rose to a record $81.72 billion in 2020-21. During April-July this fiscal, FDI (foreign direct investment) into the country increased by 62 per cent to $27.37 billion.
As if wanting to be an antidote to the coronavirus pandemic, the Indian stock market adorned carnival robes in 2021 with a tsunami of liquidity unleashed by global central banks coupled with supportive domestic policies and the world's largest vaccination drive sparking off a world-beating rally on Dalal Street, despite bouts of uneasiness over fizzy valuations. While the wider economy shuttled between recovery and relapse, dictated by multiple mutations of the virus, equity market benchmarks appeared headed in just one direction -- skywards. The dizzying upward journey has added a whopping Rs 72 lakh crore during 2021 to investors' wealth, measured as the cumulative value of all listed shares in the country, taking it to nearly Rs 260 lakh crore.
'As banks grapple with risk aversion and savers see an erosion in the value of money, the P2P platform can be a win-win for both borrowers and lenders,' notes Tamal Bandyopadhyay.
E-commerce firms and sellers including Amazon and eBay have made recommendations to the government for a differentiated policy framework for e-commerce in the revised Foreign Trade Policy (FTP) which is expected to come into effect from April 1, 2021. This is because the existing policies on exports have catered largely to traditional, offline and business-to-business exports. Suggestions have been made to the government that through the FTP, it is important to create a conducive policy framework for e-commerce exports that lowers the entry barrier for small businesses to start exporting, according to the industry sources.
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