This demand comes at a time when the government is falling short of its revenue targets due to dwindling tax and low disinvestment receipts. It could account for the dividend in the upcoming Union Budget on February 1. RBI is, however, yet to take a final call on the government's demand and might decide on this at its central board meeting scheduled for February 15 in New Delhi.
With a view to protect prudent commercial decision of bankers, the government has taken a slew of decisions, including doing away with personal responsibilities of MD and CEO of PSBs for compliance in dealing with large value frauds committed by bank officials.
In January-June, India attracted $31 billion (Rs 2.05 lakh crore) in capital expenditure (capex) from foreign companies.
'GST had to come close on the heels of demonetisation as part of the same package.'
Cash-rich Central Public Sector Enterprises (CPSEs) have to either invest their surplus funds or give it to someone for investment purpose, Finance Minister P Chidambaram has said.
If the policy is extended to NBFCs and co-operative banks, they will have to disclose divergence in asset classification and provisioning during RBI inspections in their audited financial reports. Till now, these entities have been exempted from this. At present, there are more than 98,000 co-operative banks and 10,000 NBFCs. Sources said the RBI would concentrate on the top 50 co-operative banks and NBFCs.
Private sector lenders have been communicating to their customers about their strong capital positions but it has not put depositors at ease.
This is not her first stint in North Block or in leading a major economic ministry. She started Prime Minister Narendra Modi's first term as minister of state for finance, was made the commerce minister, and then became the defence minister.
Arundhati Bhattacharya, chairman of country's largest lender State Bank of India said demonetisation of high value notes won't be a problem as the bank has done it before.
A cut in rates would have encouraged the banks to lend aggressively on the retail front.
Fitch Solutions sees RBI keeping benchmark interest rates unchanged during the fiscal to March 2022 following its decision to buy Rs 1 lakh crore of government bonds. "We had initially expected another policy rate cut to arrest the rise in government bond yields since the Union Budget announcement in February. "However, having an explicit bond purchase guidance from the RBI following the announcement of the G-SAP will also achieve a similar effect, if not even be more effective than a rate cut on capping the increase in bond yields," it said in a note. The Reserve Bank of India (RBI) held its policy repurchase (repo) rate unchanged at 4 per cent at its monetary policy meeting on April 7.
SBI is the third state-run lender to lower the lending rates after Indian Overseas Bank Tuesday and Bank of Maharashtra which also lowered their loan prices by 5 bps on loan tenors of one year and above, effective April 10.
The RBI had on August 7 announced a five-member expert panel under former ICICI Bank chairman Kamath to make recommendations on the required financial parameters for recasting corporate loans.
The recommendations will benefit 47 lakh central government employees and 52 lakh pensioners.
Citing national security and confidentiality clauses, the Finance Ministry has declined to disclose information on exchange of correspondence among India, Swiss and German authorities in connection with the black money probe.
"People giving me unasked for advice of discipline and restraint don't realise that if I disregard discipline there would be a bloodbath," he tweeted in an obvious attack on Jaitley.
The minutes of the December MPC meet reveal members felt the current spike in the headline inflation rate was due to a temporary supply shock on the food front, expected to moderate by the second quarter of 2020-21.
Given the pressure from India Inc and the banking fraternity, it is surmised that the portfolio rejig will take place before April.
Not only were Urjit and Rajan outsiders, they also hired laterally, bypassing the existing talent, especially in the field of economics
While a DFI will help banks derisk their loan portfolios, creation of a bad bank will clean up their balance sheets.
However, the RBI is still not in a mood to issue an OMO calendar, which was the expectation in some sections of the market.
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.
While the collapse of a large financial intermediary can wreak havoc on the system because of the interconnectivity, a large business conglomerate too can play spoilsport if the banks have too much exposure to the entity, explains Tamal Bandyopadhyay.
HDFC Bank on Thursday said network outages that led to a regulatory ban on new credit card sales were not due to transaction volumes, and affirmed that it continues to stay in touch with the RBI for restarting the services but giving a timeline for it will be difficult. The bank said it is on its way to creating a new technology architecture for the future as part of the "digital factory" and "enterprise factory" initiative. But, it conceded that outages will continue under the older system though it will be working to minimise the time taken to bring the service back. In December 2020, the RBI took the unprecedented step of stopping the largest private sector lender from selling any new credit cards and also launching new digital services, because of a series of network outages.
'The digital trust level has drastically gone up due to Covid, not only in tier-I and II cities, but also in tier-III, IV and V geographies,'
A dedicated physical gold exchange could lead to standard gold pricing in India.
North Block and Mint Road seem likely to now stick to the earlier convention of the RBI governor coming to Delhi and being the only MPC member meeting the finance minister and senior bureaucrats on pre-policy meetings
The country's largest lender, SBI, has reduced marginal cost of funds based lending rate by 0.9 per cent from 8.90 per cent to 8 per cent for one-year tenure, the bank said in a statement.
The RBI on Friday said it will give banks Rs 1 trillion through targeted long-term repo operations (TLTROs), of up to three-year maturity, to deploy in "investment-grade corporate bonds, commercial paper, and non-convertible debentures over and above the outstanding level of their investments in these bonds as of March 27, 2020."
Delivering a public speech hours after the RBI launched a rescue act for Yes Bank on March 6, Governor Shaktikanta Das reiterated the RBI's affirmation to do whatever was needed to combat the coronavirus impact. On that day, India had only one confirmed COVID-19 infection, the World Health Organisation was five days off from declaring it as a pandemic and the financially debilitating lockdowns were not even on the horizon. Das' promise on efforts to mitigate COVID-19 impact appeared as a footnote in news reports from the event.
The revenue department had sent notices to FIIs.
Munich-based Giesecke and Devrient supplies security features to the RBI for currency notes, and machines to bank branches across the country to detect counterfeits.
In the Sensex pack, Sun Pharma was the biggest gainer, rallying 4.48 per cent, followed by Bajaj Auto, Tata Motors, Coal India, Hero MotoCorp, Maruti and HCL Tech, rising up to 3.01 per cent. While, RIL, PowerGrid, HDFC, L&T, IndusInd Bank, NTPC and Bajaj Finance declined up to 1.50 per cent.
Promising swift action on the debit card data compromise issue, Economic Affairs Secretary Shaktikanta Das on Friday said there was no need to panic over the feared security breach that affected over 32 lakh cards.
'It is going to be a tough balance for the RBI to manage economic stability and ensure smooth government borrowing.'
'When the average growth in the last three years was just 2.5%, how does that make us the fastest growing country?' 'They only tell you what has happened in the last 2 years; they are not taking into account what happened in FY21 on account of their mistakes.'
A total of 16 secretaries have been appointed to various central government departments.
The government has also announced a slew of measures to ease cash flow for the rural sector.
Piyush Goyal, who held the post of finance minister when Arun Jaitley was undergoing treatment, told the Confederation of Indian Industry's annual session: "All stakeholders, including the RBI, should introspect on their respective roles (on low economic growth)."
Patra, as executive director of the central bank, was the principal advisor to the Monetary Policy Department since July 2012.
