The Reserve Bank of India (RBI) kept its key policy repo rate unchanged at 8.0 percent on Tuesday, as widely expected, while expressing concerns about risks to its target to bring consumer inflation down to 6 percent by January 2016.
The volume in the anonymous trading platform, NDS-OM, was Rs 7,210 crore - less than half the normal volume, but not as bad as the start of the day indicated.
The recent run on the US-based Silicon Valley Bank (SVB) and the subsequent seizure of its assets by the regulators may have sparked a global wave of risk aversion, particularly for start-ups. However, the Indian banking sector is unlikely to be a victim of any contagion effects, said analysts. he bank, which played a big role in financing start-ups and technology players, faced stress after incurring huge losses on its holdings of US bonds, following the most-aggressive monetary tightening cycle by the Federal Reserve in around four decades.
Joy Thomas stated that one large account -- HDIL -- was the sole reason for the present crisis that led to the regulatory action on Tuesday when Reserve Bank of India superseded its management and placed it under an administrator for the next six months.
Bankers on Tuesday said the RBI's decision to hold key rates, coming after a decisive mandate received by the Narendra Modi government, was on expected lines and interest rates won't change even though the central bank's SLR cut infuses additional liquidity into the system.
The rise in government borrowings through bonds is impeding the growth of the corporate debt market in the country.
Get a new QR code from an alternative provider. PhonePe, Google Pay, Pine Labs, etc are some of the other service providers.
Investors booked profits after strong 641-point rally in the previous two sessions, brokers said.
The Reserve Bank of India, in its Second Bi-Monthly Monetary Policy Statement for 2014-15, kept the key interest rate unchanged at 8 per cent.
P2P platforms do not have the safety net. Instead of playing the role of an intermediary, if they run their own balance sheets for safety and growth, it's a recipe for disaster, warns Tamal Bandyopadhyay.
India's inclusion in JP Morgan's bond index can channel billions of dollars into India. How will the government securities market handle it?
RBI had previously cut repo rate by 0.25 per cent each in January and March.
The government's ambitious gold deposit scheme can succeed only if depositors are paid a higher interest rate.
Rajan said there was full understanding between him and the Finance Minister Arun Jaitley on setting up of the PDMA
HDFC Bank, the country's largest private-sector lender, lost to competition wholesale loans of around Rs 50,000 crore after it increased interest rates in May, said Chief Financial Officer Srinivasan Vaidyanathan in an analyst call. "There were some customers who were offered lower rates by other market participants. "But we decided not to cut back on our rates," he said while addressing analysts after the announcement of the bank's Q1 earnings.
With crude and commodity prices ebbing and the twin deficits under check, the Reserve Bank should have cut the key policy rate to push investments and boost economic growth, India Inc said.
This is the index's biggest single-day fall in almost a month
Application deadline may be extended but no leeway on priority-sector targets.
Soft crude prices will cut fuel subsidy bill and help contain fiscal slippage this year.
As the Reserve Bank maintained a status quo on key policy rates, analysts said higher demand due to supply constraints will not allow inflation to ease as quickly as anticipated and the apex bank may be forced to increase rates once more by the year-end.
The index went below the crucial 50 mark.
India Inc has pitched for rate cut to boost economic activities.
The Reserve Bank is unlikely to lower the interest rates.
Most say a rate cut could come in RBI's June policy.
Invest in MFs for liquidity and choice of funds. Invest in NPS for the tax benefits, tax-free rebalancing, and for earmarked savings for retirement.
India's current account deficit is expected to deteriorate in the current fiscal on account of costlier imports and tepid merchandise exports, according to the Finance Ministry's monthly economic review. The review released on Thursday by the ministry also said that global headwinds would continue to pose a downside risk to growth as crude oil and edibles, which have driven inflation in India, remain major imported components in the consumption basket. For the present, it said, "their global prices have softened, as fears of recession have dampened prices somewhat. This would weaken inflationary pressures in India and rein in inflation."
Probably 35 bps. There could be even an encore in February 2023 to take the policy rate to 6.5% before the financial year ends, predicts Tamal Bandyopadhyay.
Higher levels could not be sustained as participants offloaded their long positions in view of September series expiry.
In the 30-share Sensex constituents, 16 ended lower and 14 gained, helping the benchmark indices trim losses.
RBI is closely monitoring monsoon.
Borrowers who were hoping for lower interest rates on their home or car loans might be in for some disappointment.
HDFC and HDFC Bank's merger - touted as India's biggest-ever corporate merger - pumped up shares of the two entities on the bourses. Shares of Housing Finance Development Corporation (HDFC) skyrocketed 9 per cent while those of HDFC Bank zoomed 10 per cent. In comparison, the benchmark S&P BSESensex and the Nifty50 indices settled 2.2 per cent higher on Monday.
Though most experts remain bullish on the banking space, they suggest investors buy only those banks whose NPAs are at a manageable level of 3% to 4% and there is credit growth or earnings visibility.
Over the past few months, macro parameters have improved.
On the individual front, housing loan rebate on self-occupied property was increased from Rs 1,50,000 to Rs 2,00,000.
A host of lenders, including State Bank of India, IDBI Bank, Indian Bank and Andhra Bank, have lined up meetings of their asset-liability committees this week, to review their lending and deposit rates.
PS banks need to pull up their socks to improve cash flows.
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.
India imported 967 tonnes of gold in 2014-15.
'When the rupee was at 65 a dollar, we wanted to go to Thailand for a holiday.' 'Now at 72, we may find Goa much more attractive.' 'That's how correction happens.' 'If you don't let that correction happen, then it's a pressure cooker that bursts one day.'
