Crossing Rs 49, the Indian currency is moving fast towards the Rs 50-to-a-dollar mark.
"The economy is going through a very difficult patch and business confidence has plummeted. New investments have slowed down," Assocham President Rajkumar Dhoot said during his interaction with RBI Governor D Subbarao ahead of the central bank's monetary policy review scheduled on April 17.
RBI is scheduled to announce mid-quarter review of monetary policy for 2013-14 on June 17.
Reserve Bank Governor D Subbarao on Thursday said the next fiscal is going to be more challenging than the current fiscal as the moderation in India's economic growth is likely to be worse than expected earlier.
The Reserve Bank of India on Wednesday said banks' response to monetary actions in terms of cutting interest rates have been mute and there is room for further softening of interest rates.
What the industry and observers have been saying for quite some time -- that there is a lot of regulatory confusion on developing a corporate debt market -- has come out in the open with the RBI Governor and the Plan panel head speaking on the same topic in different languages.
Former Indian Prime Minister Manmohan Singh passed away on Thursday night at the age of 92. He was brought to the emergency department of AIIMS Delhi in critical condition after "sudden loss of consciousness."
The Financial Stability and Development Council meeting on Tuesday started with an air of tension in the room. An official present described the participants' body language as "tetchy". However, once presentations and discussions begun, the mood considerably eased.
Reserve Bank Governor Shaktikanta Das on Friday stressed that the monetary policy must remain actively disinflationary to ensure that the decline in inflation from its peak of 7.44 per cent in July continues smoothly. Addressing the Kautilya Economic Conclave 2023, he also said price stability and financial stability complement each other and it has been an endeavour at RBI to manage both efficiently. Retail inflation declined to a three-month low of 5.02 per cent annually in September on account of moderation in vegetables and fuel prices, and was back within the Reserve Bank's comfort level.
RBI is scheduled to announce mid-quarter review of monetary policy for 2013-14 on June 17.
The Reserve Bank's rate setting panel on Thursday met to finalise a report for the government on why it failed to keep retail inflation below the target of 6 per cent for three consecutive quarters since January this year, said sources. The report will be presented to the government as per the Reserve Bank of India Act, they added. The six-member Monetary Policy Committee (MPC) is headed by Governor Shaktikanta Das.
The International Monetary Fund and the World Bank had forecast that India's economy would grow at 8 per cent and 9 per cent, respectively.
The loan by the banks to MFIs for on-lending to small borrowers will fall under 'priority sector' category if the RBI guidelines are met.
"Bank loans to all MFIs, including NBFCs working as MFIs on or after April 1, 2011, will be eligible for classification as priority sector loans if, and only if, they conform to the regulations formulated by the Reserve Bank," RBI Governor D Subbarao said in the 'Monetary Policy Statement for 2011-12'.
The Reserve Bank on Tuesday did not rule out taking more action before the next policy review to tackle rising inflation.
Economic Affairs Secretary Subhash Garg is the finance ministry's primary liaison with the RBI.
RBI Governor Raghuram Rajan on February 2, left the key interest rate unchanged citing inflation.
Heads of various public and private sector banks on Thursday sought to present a counter-narrative on RBI Governor Shaktikanta Das warning lenders about the perils of extreme risk aversion in the pandemic-stricken environment where credit demand is on the wane.
FM P Chidambaram has endorsed RBI's monetary policy. He expressed concerns about the gap in India's and the US' interest rates and will discuss it with RBI's Governor Y V Reddy.
Rajan warned against waiting to act until inflation expectations become entrenched, but also said the Reserve Bank of India would overlook temporary spikes in inflation.
Tackling inflation will be a priority, the finance minister and RBI governor said on Wednesday, after high prices contributed to painful losses for the ruling Congress Party in state elections.
The Reserve Bank is in touch with various banks to understand why lending rates are not coming down despite the central bank cutting policy rates, even as the bankers expressed inability to lower the rates when bond yields remain high.
The decision by the Reserve Bank of India to introduce a unified regulatory framework on connected lending for all the regulated entities (RE) is expected to reduce the influence of business conglomerates in the Indian lending space, said bankers and experts. "Connected lending pertains to lending to related parties within the same business group. "While the RBI might appear more agreeable to allowing business conglomerates to own banking licenses, it deems it crucial to bolster regulations that would prevent conglomerate-owned banks from gaming the system," said Shivaji Thapliyal, head of research and lead analyst, YES Securities.
The banknotes would be bearing the signature of RBI governor Raghuram G Rajan and the year of printing '2013' printed on the reverse of the banknote, it said.
Returns on government securities are likely to be market-determined as the Reserve Bank of India on Friday asserted that it is not targeting any yield.
Allocation to bank deposits -- fixed deposits, savings account deposits, and current account deposits -- came down.
RBI kas hiked short-term lending (repo) rate by 0.25 per cent to 7.5 per cent.
Currently, banks pay up to 9.5 per cent interest on fixed deposits.
RBI Governor Bimal Jalan on Thursday ruled out the possibility of a change in Repo rate, but hoped that inflation would turn soft from the second quarter of the current fiscal.
Despite steady loan growth, the banking sector is expected to report subdued margins in the quarter ending June 2024 (Q1FY25), driven by high demand for deposits amidst tight liquidity conditions. However, according to Bloomberg analysts, listed banks are forecasted to see a 14.5 per cent year-on-year (Y-o-Y) increase in net profit. Estimates showed that banks' net interest income (NII), and revenues from interest minus interest expenses might grow 11.9 per cent Y-o-Y.
If indeed we want the board to manage the RBI, probably the government should take a close look at the US Federal Reserve system which has a two-part structure - a central authority in Washington, DC, and a decentralised network of 12 Federal Reserve Banks located throughout the country, says Tamal Bandyopadhyay.
India's bank credit remains resilient and is showing no signs of systematic risk, Reserve Bank of India (RBI) Deputy Governor Michael Patra said on Monday. A copy of the speech was uploaded on the RBI website on Thursday. "Bank credit is monitored as a lead indicator of overheating. Our assessment, based on a menu of approaches, indicates that current rates of credit expansion are not pointing to systemic stress building up. Illustratively, the credit gap - the difference between the credit to GDP ratio and its trend - is currently negative," said Patra, while delivering a speech in Cambodia.
Growing fiscal deficit as a result of governments' efforts to prop up their respective economies has the potential to undermine the autonomy of central banks, whose credibility has already been dented due to the financial meltdown, RBI Governor D Subbarao said on Friday.
The Reserve Bank of India, which is scheduled to review the monetary policy on October 30, should not do anything that might make the economic fundamentals of the country uncomfortable, former RBI governor Bimal Jalan said on Tuesday. The central bank is facing a tough task of keeping the economic growth going while keeping inflationary pressures under control.
Rapid depreciation of the rupee put us in a vicious spiral: D Subbarao
The government is in the process of setting up of an independent debt management office, aimed at separating RBI's role as the decider of interest rate in the market, and at the same time being the banker to the government.
RBI's policy stance must address concerns over slowing output
The Reserve Bank of India on Friday decided to keep the benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance as the economy is yet to recover from the impact of the second Covid wave.
As per the RBI Act, the central bank has to have four deputy governors.
He will look after the Department of Banking Operations and the Development and Urban Banks Department, which were held by Usha Thorat who retired in November last year.
