For over a decade, HDFC Bank consistently outperformed industry growth rates in both deposits and advances, maintaining impeccable asset quality. Amid a landscape where other banks struggled with soaring non-performing assets (NPAs), HDFC Bank thrived, eventually surpassing ICICI Bank to become the largest private sector lender in India. Its net interest margin (NIM) remained stable in the range of 4.1-4.4 per cent.
The move may release funds locked in government securities and add to liquidity. With inflation expectations lowered, this should not impact bond sentiment in the short run
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Currently, the cash reserve ratio is pegged at a low of 4 per cent, while statutory liquidity ratio that includes securities such as government bonds, stands at 23 per cent, down from 25 per cent in 2010.
The Reserve Bank on Friday superseded the board of the city-based Abhyudaya Cooperative Bank on concerns emanating from "poor governance" and appointed an administrator to manage the affairs of the lender. In what can be seen as a step that should allay depositors' concerns, the central bank did not put any restrictions or moratorium on deposit withdrawals because of the comfort it gets on the bank's finances, according to people in the know. "(The) action is necessitated due to certain material concerns emanating from poor governance standards observed in the bank.
Worried over a spike in interest rates in the wake of steps to support the falling rupee, the RBI on Tuesday announced a slew of measures, including Rs 8,000 crore bond buyback, to ease liquidity and ensure adequate credit flow to the productive sectors of the economy.
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The worst performing Asian currency of the year so far hit a new life low of 61.80 rupees per dollar on Tuesday, breezing past a previous low of 61.21 hit on July 8. Central bank intervention helped the rupee recover, but by Wednesday it was sliding once again, to stand around 61.41 by 1.30 p.m.
RBI has cut policy rate thrice during 2015.
The Reserve Bank of India is likely to take a call on the relaxations sought by HDFC Bank in relation to the merger, as the date of merger draws closer, sources said. The HDFC twins, which announced their decision to merge in April last year, received National Company Law Tribunal's (NCLT's) approval recently - a key milestone to close the deal in due time. The management of both the entities had said that it will take 15-18 months for the merger.
The RBI's reluctance to cut rates should be seen as a case of inability in the face of inflation.
The fifth meeting of Monetary Policy Committee maintained the repo rate, at which it lends to the banks, at 6.25 per cent and the reverse repo, at which it borrows, will be 6 per cent.
For the first time in 21 years, the Reserve Bank of India (RBI) will revise norms for investment portfolios of commercial banks to reflect changes in global standards on valuation and measurement, and progress in the domestic market. This could pave the way for banks to transition to the new accounting standards (Ind-AS). The outstanding investment portfolio of commercial banks was at Rs 45.84 trillion as of November 19 this year.
Talks of a merger between HDFC Bank and parent HDFC Ltd had gained steam nearly eight years ago, when the Reserve Bank of India allowed banks to issue long-term bonds to fund infrastructure and affordable housing. At that time, key executives at both entities denied any such proposal. And today, the merger has been officially announced by the two players.
In a mixed bag for HDFC Bank ahead of the parent HDFC's merger with itself, the Reserve Bank of India has declined to make exceptions on certain aspects, and has offered some leeway on others. The country's largest private sector lender, which is aiming to conclude the merger with the home finance major by July, had written to the central bank seeking certain forbearances after announcing the $40-billion merger in April last year. In an exchange filing this evening, HDFC Bank said it received a response from RBI on Thursday and also said that there are a few pending issues.
Reserve Bank is scheduled to announce its bi-monthly monetary policy on August 3.
Between March 2022 and September 2023, HDFC Bank added 56,310 employees.
All categories of NRI deposits saw net inflows in July.
Banks normally park almost 27 per cent of their funds in government securitie.
Discussion paper fixes Rs 1,000 cr as minimum capital for these specialised banks
Moreover, the RBI's use of reserve ratios, statutory liquidity ratio and cash reserve ratio as monetary policy tools affected banks' profitability: No interest is paid on CRR balances, and the interest yield on SLR securities is far lower than the yields on advances.
The RBI on Tuesday maintained status quo on interest rates, saying there have been no developments to warrant further easing since an unscheduled rate cut about a fortnight ago.
On the reduction in the SLR ratio, he said it was a signal from the point of view of long-term reforms.
Get a new QR code from an alternative provider. PhonePe, Google Pay, Pine Labs, etc are some of the other service providers.
During the fourth quarter (January-March), banks step up the activity to meet annual targets. This leads to a race to raise funds from markets often by jacking up deposit rates. This time around, the market has not seen such trend yet.
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.
Based on the current momentum, the funds likely to be raised through the RBI's relaxed window would be $3.5 billion-$4 billion.
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.
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The right sequence would be to gradually reduce SLR
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.
India's inclusion in JP Morgan's bond index can channel billions of dollars into India. How will the government securities market handle it?
Better supply management and check on hoarding should be able to prevent food price spikes
A special Central Bureau of Investigation court in Mumbai has convicted four former bank officials in one of the multi-crore securities scam cases and sentenced them to three years imprisonment, 25 years after the scam involving 'Big Bull' Harshad Mehta came to the fore.
With the widespread use of new technologies, inter-connectedness and dependency, newer risks, threats and vulnerabilities have emerged.
'The effect will be seen two-three quarters down the line.'
RBI Governor Raghuram Rajan asked banks to follow suit and pass on the rate cuts.
The onus is on the banks to pass the benefit to customers.
The Reserve Bank Officers Cooperative Credit Society, which caters to the credit needs of RBI officers posted all over India, has a fixed deposit of Rs 105 crore in the bank on which the RBI has placed various curbs for six months following revelations of irregularities.
The NSE Nifty ended at 3,044, up 158 points. The market breadth was fairly positive with over three advancing stocks for every declining share - out of 2,652 stocks traded, 1,970 advanced, 633 declined and the rest were unchanged today.
Aditya Birla Nuvo gets board's nod, Videocon submits application.
Rajan drew attention towards the Nachiket Mor committee on PSL and said that the RBI is trying to make the entire process more effective.
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.
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