Banks have issues with their balance sheet profiles, say PSB executives.
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.
'Credit expansion is probably the quickest way to get the economy going again.' 'Easy credit is like a shot of nitro in a race car: In timely, small, quick, doses it can give a tremendous boost but carried to extreme it can destroy the engine,' points out S Muralidharan, former managing director, BNP Paribas.
After unseasonal rains, supply disruptions and pandemic-induced woes pushed retail inflation well over the Reserve Bank's comfort zone in 2020, the scenario is likely to stay that way at least in the short term as economic recovery slowly gains foothold. For most part of this year, pricier food items pushed the retail inflation, based on Consumer Price Index (CPI), higher in the range of 6.58-7.61 per cent, except for March when the reading was 5.91 per cent. Experts believe retail inflation is likely to average around 6.3 per cent this fiscal and mostly will remain sticky going forward owing to pick-up in demand across sectors.
While they have restructured loans, there is still question mark over the success of such a work-out
RBI conducts interviews for first lateral hire for CGM post; deputy governors to head four distinct verticals.
Central banking is a science, not an art, Tamal Bandyopadhyay tells RBI Governor Shaktikanta Das.
SBI is the first major state-run bank to hike lending rates after short-term rates rose as a result of the Reserve Bank of India's liquidity tightening moves announced in July.
The Reserve Bank of India unexpectedly raised its policy interest rate on Tuesday by 25 basis points (bps) but said that if consumer price inflation eases as projected, it does not foresee further near-term tightening.
The message to bankers from Raghuram Rajan was clear.
Home Minister Rajnath Singh said that the decision could cost the government roughly Rs 15,000 crore.
As inflation rate is near the upper limit of the comfort zone, experts rule out rate cuts anytime soon
For the first time, the value of card and mobile payments of Rs 10.57 trillion was more than ATM withdrawals of Rs 9.12 trillion in Q4 of fiscal 2019-20. In the months of lockdown, the gap may have widened further, but cash could be back in vogue when the situation normalises.
'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 change from wholesale to retail inflation as an anchor means that the weightage of diesel in inflation has decreased
Fed is still concerned about weak export growth.
Finance Minister Arun Jaitley said RBI and the government are in continuous dialogue and that relationship will continue.
For the week, the battered rupee gained 26 paise against the greenback
The Reserve Bank on Monday pitched for creation of a conducive environment for investment and faster clearances of projects to boost economic growth which slowed to a decade low of 5 per cent in the previous fiscal.
Taking advantage of the RBI's different accounting year, the Centre had started demanding an interim dividend till the time the latter's final balance sheet is prepared (usually in August). To address this anomaly, an expert committee led by former RBI governor Bimal Jalan had recommended aligning the RBI's financial year with that of the government.
Reserve Bank of India (RBI) Governor Raghuram Rajan's decision to cut rates last week surprised even top officials.
While Raghuram Rajan's departure under these circumstances is a pity, it would be wrong to conclude that the RBI or the economy cannot do without him.
The 30-share Sensex jumped 729 points to end at 28,076 and the 50-share Nifty soared 217 points to end at 8,494.
A smartly executed reform-recap will be the best booster for the economy, says Ajay Chhibber.
'People know if inflation is not within the tolerance band, then action will be taken so they do not expect inflation to rise above that.'
Government hits back, tells rating agency to introspect on processes.
For banks to cut loan rates, the cost of deposits needs to come down, and there is no sign of that happening.
Raghuram Rajan joked he wasn't expecting to win any votes or Facebook 'likes' in the position.
Rajan tells RBI colleagues he will be returning to academics
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Bankers remained ambivalent on the impact of Tuesday's policy announcement by Reserve Bank on the cost of funds and refrained from giving a guidance on the direction in which lending rates are headed.
The finance ministry has put out a revised draft in public domain.
'The assumed linear correlation between forced lower yields, higher bank borrowing from the RBI, higher lending, and higher growth involves leaps of faith, each a step on the quicksand of false beliefs,' warns Debashis Basu.
Hardening prices of manufactured items during the month may refrain the Reserve Bank of India from cutting rates in its policy review on February 8.
The speed at which he led the central bank in different areas -- ranging from internal reorganisation to inflation fighting, stabilising the currency, taking on rogue corporations, cleaning up bank balance sheets, and opening the sector -- makes one believe that Rajan knew he had only three years to do his job. A fascinating excerpt from Tamal Bandyopadhyay's MUST-READ Roller Coaster: An Affair with Banking.
His finest years came when he served as deputy governor under C Rangarajan.
'Most importantly, marking a departure from the past, the RBI has made it clear that it is not overtly worried about the level of the local currency,' notes Tamal Bandyopadhyay.
As the government plans to take sector-specific steps to tackle the slump, Finance minister Nirmala Sitharaman will soon hold talks with representatives from various sectors to get and take steps so that the confidence of those sectors can be restored.
Budget was a mild disappointment. Yet, the bull run continues.
The view among the regulator and the government is that the currency is overvalued
Banks want lower provisioning burden on recast debt, interest on cash reserve ratio deposits.
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