The Reserve Bank on Wednesday increased the benchmark lending rate by 40 basis points (bps) to 4.40 per cent in a bid to contain inflation, which has remained stubbornly above the target zone of 6 per cent for the last three months. The decision follows an unscheduled meeting of the Monetary Policy Committee (MPC), with all six members unanimously voting for a rate hike while maintaining the accommodative stance. While the inflation has remained above the targetted 6 per cent since January, RBI Governor Shaktikanta Das said the inflation print in April is also likely to be high.
Wholesale price inflation rose to a 4-month high of 2.36 per cent in October as prices of food items, especially vegetables, and manufactured goods turned dearer, as per the government data released on Thursday. The wholesale price index (WPI) based inflation was 1.84 per cent in September 2024. It was (-) 0.26 per cent in October, last year.
Tata Steel was the top gainer in the Sensex pack, climbing 2.11 per cent, followed by Infosys, HDFC Bank, HDFC, Kotak Bank, M&M and PowerGrid. NSE Nifty jumped 142.05 points to end at 17,605.85.
Review your family emergency fund and replenish it if needed. Revisit financial goals to see if there is any change in timeline or the corpus required.
As far as the Indian households are concerned, although the leverage ratio in this basket has multiplied nearly 3 times in the past decade, it is still well below not just developed but also most other developing economies.
Net NPAs increased to Rs 36,260 crore in the December quarter from Rs 34,843 crore in September and Rs 33,116 crore in December 2023, observes Tamal Bandyopadhyay.
The RBI wants CPI inflation to ease further to 6 per cent by January 2016.
State Bank of India (SBI) on Monday raised its benchmark lending rates by up to 50 basis points (or 0.5 per cent), a move that will lead to an increase in EMIs for borrowers. The increase in lending rate comes days after the Reserve Bank of India hiked its benchmark lending rate by 50 basis points to tame inflation. External Benchmark based Lending Rate (EBLR) and Repo-Linked Lending Rate (RLLR) have been raised by 50 basis points while the hike in Marginal Cost of funds-based Lending Rate (MCLR) is 20 basis points across all tenure.
FDs are not advisable for long-term wealth creation as their post-inflation, post-tax returns are not very attractive.
The new effective repo rate for the third quarter is now fixed at 7.25 per cent while CRR rate has revised to 4 per cent.
The Reserve Bank of India on Thursday kept the benchmark interest rate unchanged at 4 per cent and decided to continue with its accommodative stance against the backdrop of an elevated level of inflation.
Mortgage lender HDFC Ltd on Friday hiked its lending rate by 50 basis points hours after the Reserve Bank raised the benchmark interest rate to tame inflation. The move would increase EMIs for housing loans by the firm. "HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 50 basis points, with effect from October 1, 2022," the country's biggest housing finance company said in a statement.
P K Mishra, a retired IAS officer of the Gujarat cadre, is currently serving as the principal secretary to the prime minister.
The new rates, effective Wednesday, is the third reduction by SBI in this financial year having cut the rates by 5 bps each in April and May, while its home loan rates has come down by 20 bps during this period.
The RBI's decision to hike the benchmark interest rate will make home loans costlier and affect housing sales, especially in affordable and mid-income segments, according to property consultants. The RBI on Wednesday hiked the key benchmark rate by 50 basis points. Property consultancy firms Anarock, Knight Frank India, JLL India, Colliers India, India Sotheby's International Realty and Investors Clinic said that the RBI's move was on the expected line to control inflation and this would result in an increase in interest rates on home loans.
Reserve Bank of India Governor Bimal Jalan on Wednesday said the apex bank's stance on soft interest rate environment will continue while it will remain flexible for repo rate.\n\n\n\n
It's not necessary to use only external benchmarks, there are multiple avenues to meet the requirement that the RBI wants, the bank said.
Striking a different note from its peers, US brokerage Bank of America Securities has maintained that the Reserve Bank will leave rates unchanged next week, recognising growth-focused and capex-driven fiscal expansion, which though poses huge price pressure and interest rate risks later. The RBI's rate setting panel Monetary Policy Committee (MPC) will begin its deliberations next Monday and announce the policy moves on Wednesday (February 9) in the backdrop of a massive spike in bond yields post the Budget. Almost all major central banks are in the process of hiking rates to tame 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.
Analysts expect RBI to restore 100-bp corridor in Tuesday's policy review.
The Reserve Bank is likely to maintain status quo on interest rates in its forthcoming monetary policy review but may change the stance in view of retail inflation piercing its upper tolerance limit, global uncertainties created by the ongoing Russia-Ukraine war, and the urgency to protect and boost growth, feel experts. The RBI governor-headed rate setting panel -- Monetary Policy Committee (MPC) -- will be holding its first meeting of the 2022-23 fiscal from April 6 to 8. The outcome will be announced on April 8.
The Reserve Bank has decided to keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of their net demand and time liabilities and keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.25 per cent.
Outgoing Reserve Bank Governor Shaktikanta Das said on Tuesday that restoring inflation-growth balance is the most important task ahead of the central bank. Addressing a press conference on his last day as the central bank chief, Das said his successor will have to navigate the changing world order, effectively deal with cyber threats, and focus on harnessing new technologies.
As the policy rate has seen a steady increase since May 2022, the percentage of loans offered at interest rates below 8 per cent have declined sharply, dropping from 53 per cent in March 2022 to 18 per cent by June 2023, according to a report by the Reserve Bank of India (RBI). The share of bank loans with interest rates of 10 per cent or higher rose from 22 per cent to 34 per cent during this period, reflecting the impact of a 250 basis point (bps) hike in the policy repo rate by the RBI's Monetary Policy Committee. In response to the rise in repo rate, 32 domestic banks have made corresponding upward revisions to their repo-linked external benchmark-based lending rates (EBLRs), aligning them with the magnitude of the rate hike.
'I think today RBI supervision is much sharper than what it was earlier.'
Reserve Bank Governor Shaktikanta Das on Friday said that this stage would have been "premature" and "very very risky" as the retail inflation is still high, and future monetary policy action would depend upon the income data and outlook. Earlier this month, the RBI continued to maintain the status quo in the short-term lending interest rate (repo), citing inflationary concerns, though it changed the monetary policy stance to neutral.
'Growth, liquidity and deposit mobilisation are likely to be discussed during the interaction.'
Finance Minister Pranab Mukherjee on Tuesday said the Reserve Bank's decision to hike short-term borrowing and lending rates will help contain inflation and was in line with the government's policy.
The disruptions caused by COVID-19 have more severely impacted small and mid-sized corporates, including NBFCs and MFIs, in terms of access to liquidity.
The fourth consecutive rate cut is expected to lower equated monthly instalments (EMIs) for home and auto buyers, and borrowing cost for corporate.
Opinions vary, but fund managers remain bullish.
RBI said there are progressive signs of economic recovery.
The CPI and WPI data for December 2013 holds the key for the third-quarter monetary policy review to be announced later this month.
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.
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Industry's demand for a reduction in the repo rate, currently 8 per cent, has gained momentum after wholesale and retail inflation eased in February.
Reserve Bank Governor Shaktikanta Das on Wednesday said the decision to tweak policy rates was not in his hand as he himself is driven by the situation on the ground. In April, the Reserve Bank in a surprise move hit the pause button and decided to keep the key benchmark policy rate at 6.5 per cent. Prior to it, the Reserve Bank of India (RBI) was on a rate hiking spree, raising the repo rate by 250 basis points since May 2022.
Repo rate is 9 per cent and Reverse Repo as well as Bank rate stand at 6 per cent. RBI cut CRR, the amount of cash banks need to keep with the central bank, by 1.5 per cent in two tranches last week releasing Rs 60,000 crore (Rs 600 billion) into the cash-starved banking system.
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