Dr T V Somanathan is the first finance secretary to be appointed Cabinet secretary since 1985. His appointment at this juncture seems to carry much meaning for the forthcoming trajectory of reforms and restructuring of India's steel frame.
There are however, enough dovish signals in the governor's statement to indicate a pro-growth policy going forward.
The central bank kept cash reserve ratio unchanged at 4 per cent.
Making it easier for urban cooperative banks to extend housing loans, the Reserve Bank of India has relaxed the risk provisioning norm for purchase of residential properties up to Rs 30 lakh (Rs 3 million).
Reserve Bank of India Governor Y V Reddy on Tuesday said the Indian economy is largely insulated from episodes of global financial instability and the country has built resilience to shocks and is less vulnerable to output volatility.\n\n
The Reserve Bank on Thursday marginally revised upwards the economic growth projection for the current fiscal to 6.5 per cent, from its earlier estimate of 6.4 per cent. Unveiling the first bi-monthly monetary policy of 2023-24 fiscal, RBI Governor Shaktikanta Das said the GDP growth in the first quarter of 2023-24 is expected at 7.8 per cent.
What is killing the risk appetite of the bond buyers is the inconsistency in the central bank's approach. It needs to allow the yield to find its own level, gradually. To ensure that, the RBI may adopt a similar approach with which it handles a slipping rupee, asserts Tamal Bandyopadhyay.
The Reserve Bank of India on Friday raised the GDP growth projection for the current fiscal to 7 per cent from 6.5 per cent earlier on buoyant domestic demand and higher capacity utilisation in the manufacturing sector. Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das, however, flagged protracted geopolitical turmoil and global economic fragmentation as risks to the growth outlook. The RBI kept interest rates unchanged at 6.5 per cent in Friday's monetary policy statement.
While India has in no way contributed to global financial imbalances, it has a huge stake in the process of unwinding of these imbalances and its impact on exchange rates, former Reserve Bank of India governor Y V Reddy has said. He was speaking at the Indian Council for Research on International Economic Relations.
The central bank says that there is room for policy action, but warns of persistent inflation risks.
The Reserve Bank of India (RBI) will maintain the policy repo rate at 6.5 per cent during its upcoming June 8 announcement, considering the easing of retail inflation in April and the potential for further decline, indicating the effectiveness of previous policy rate actions, anticipate experts. Headed by Reserve Bank Governor Shaktikanta Das, a meeting of the six-member Monetary Policy Committee (MPC) is scheduled for June 6-8. The decision of the 43rd meeting of the MPC would be announced on Thursday, June 8.
Reserve Bank of India Deputy Governor K C Chakrabarty has called for changes in the rating and reporting standards of banks, saying a bank should not be rated just on the basis of its net interest margin and net profit, but from a non-financial angle too.
Reserve Bank of India Governor D Subbarao on Friday increased mandatory cash reserve of banks held by RI by 75 basis points (0.75 per cent) in a bid to suck excess liquidity to combat rising inflation.
With 7 per cent economic growth, India is not creating enough jobs as reflected by the number of applicants for vacant posts in some states, Reserve Bank's former governor Raghuram Rajan said and suggested the government needs to focus on promoting labour-intensive industries to generate employment. Rajan further said some Indians, especially those at upper level, are comfortable and have high incomes, but consumption growth from the lower half of the country has still not recovered to pre-pandemic level.
The RBI has doubled the limit of maximum balance that an individual customer can hold with payments banks to Rs 2 lakh from Rs 1 lakh earlier with immediate effect to expand the ability of such lenders to cater to the needs of MSMEs and other businesses.
Reserve Bank of India Governor YV Reddy has said that Indian financial market is not vulnerable to overseas development. The Indian financial sector is likely to be less affected by the contagion than most other emerging market economy (EMEs), in respect of first-round or direct effects. The Indian equity markets have been volatile in recent months and that has some impact on changing sentiments. He said India has not been contributing in the global macro economic imbalances.
Even as the deficits on fiscal and current account fronts have been building up, it is highly unlikely that the country could witness the repeat of the 1991 economic crisis that was caused by similar factors, said Duvvuri Subbarao, Governor of the Reserve Bank of India (RBI) on Thursday.
Feature for feature, bank FDs are indeed better than debt funds today, mainly thanks to Ms Sitharaman, notes Debashis Basu.
Households are likely to remain the primary net lenders to the economy in the coming decades.
The criticism of the RBI governor's handling of inflation is fraught with an oversimplification of the current inflation dynamics.
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.
Former Reserve Bank Governor Raghuram Rajan said India will still remain a lower middle country if the potential growth rate remains at 6 per cent annually without any rise in population by 2047 (Amrit Kaal) and will be reaching the end of the demographic dividend by then. Speaking at a programme organised by Manthanon on Saturday, the economist said if the country does not grow faster, it will grow older (demographically) before it gets richer, which means there is the burden of an aging population to deal with also at that point. Rajan said the GDP growth in India for the past two quarters was in the region of 7.5 per cent and if one looks at the labor force participation, it is very low and when it comes to female participation, "it is the lowest in the G20".
The appointment of a deputy governor to the country's central bank has always been surrounded by controversy. And this time is no exception. One of the Reserve Bank of India executive directors, C Krishnan, who was called to an interview for the post, has declined to appear before the search committee. The interview was scheduled for September 9.
'India's fundamentals are a lot better (than those of other emerging market economies).' 'India will suffer (witness a fall in its stock market) what I call the second order effect.' 'And the second order will happen when these funds (belonging to macro and hedge fund investors and which have leveraged Japanese yen-carry trades), because they lose money elsewhere as lot of their positions were financed by borrowing Japanese yen, will have to book profits in investment destinations where they are making money, including in markets like India.' 'They (these investors) will have to effectively sell in countries like India and which is the consequence (the crash in equity markets) that Indian markets might see.'
The majority view remains for the central bank to leave the cash reserve ratio unchanged at 4 per cent.
His comments poured cold water on hopes that the central bank may have a rethink on rates after the wholesale price index, the main inflation gauge, rose a lower-than-expected annual 7.25 per cent in June, its slowest rise since January, helped by moderation in fuel prices.
In FY24, loans given out by such firms had topped a whopping Rs 146,517 crore, up by 49 per cent year-on-year and spread over 10.19 million accounts (up 35 per cent).
The Reserve Bank of India's (RBI's) caution on inflation, highlighted during the recent monetary policy meeting, may put investors' faith in fast moving consumer goods (FMCG) stocks to test, analysts said. They, however, believe FMCG stocks may ride through this near-term investor anxiety as related companies are, typically, well-equipped to handle inflation due to their pricing power and steady demand for essential goods.
The RBI targets inflation at 6 percent by January 2016 and 4 percent for 2017/18.
Commemorating 75 years of India's independence, SBI has launched a 75-day Utsav Deposit Scheme, offering 6.10 per cent for fixed deposits. Senior citizens will get an additional 0.50 per cent and the offer is on until October 30, SBI said.
He will take the place of Subir Gokarn, who was in-charge of the monetary policy department, has retired.
Reserve Bank Governor Shaktikanta Das on Monday said despite the latest headwinds arising from the Jackson Hole summit leading to extreme volatility, our banking system and financial markets are strong enough to withstand such pressures. Taking the markets by surprise, US Fed chair Jerome Powell had told the annual Jackson Hole summit of central bankers and economists last week that he would have to keep raising federal fund rates to tame inflation, which remains the biggest challenge to the world's largest economy. He also warned of the pains that such monetary policy actions would create on growth and jobs.
Raghuram Rajan, whose current three-year tenure ends on September 4, has already said no to a second term.
All the bank notes in the denomination of Rs 20 issued by the RBI in the earlier series will continue to be legal tender, it clarified.
Observing that there is liquidity overhand of Rs 13 lakh crore in the system, RBI Governor Shaktikanta Das said on Friday that the exceptional measures undertaken during pandemic will be dealt in sync with macroeconomic developments to preserve financial stability. Since the onset of the pandemic, the Reserve Bank has maintained ample surplus liquidity to support a speedy and durable economic recovery, he said while announcing the outcome of the Monetary Policy Committee (MPC) meeting. The level of surplus liquidity in the banking system increased further during September 2021, with absorption under fixed rate reverse repo, variable rate reverse repo (VRRR) of 14 days and fine-tuning operations under the liquidity adjustment facility (LAF) averaging Rs 9 lakh crore per day as against Rs 7 lakh crore during June to August 2021, he said.
Subramanian, a senior fellow at the Peterson Institute for International Economics in Washington, attended a news conference in New Delhi at which his appointment was announced.
The government in its budget for the current fiscal decided to borrow Rs 4.5 lakh crore (Rs 4.5 trillion) from the market, up from Rs 3.1 lakh crore (Rs 3.1 trillion) in the previous fiscal.
In his first interaction with the media after taking charge, former PNB chairman and managing director K C Chakrabarty said, "When the government is giving a certain interest rate on small savings, it is not logically correct for banks to provide a lower rate of interest. When we are saying that interest rates are coming down, that means the small savings rate should also come down."
Indian economy is gathering momentum in the second quarter, though inflation would continue to average above the central bank's comfort zone of 6 per cent, said an article in the RBI's monthly bulletin released on Thursday. The consumer price index (CPI) based retail inflation shot up significantly to 7.44 per cent in July, from 4.87 per cent in the preceding month, mainly due to soaring prices of tomato, vegetables and other food items. In his address to the nation on the Independence Day, Prime Minister Narendra Modi vowed to take more steps to contain price rise.
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