The RBI is fully aware that the high-cost loans and high indebtedness of the borrowers could pose financial stability risks, if not addressed by these NBFCs. Governor Shaktikanta Das has issued a stern warning, saying the RBI is closely monitoring these areas and will not hesitate to take appropriate action, if necessary, if the culprits don't opt for self-correction. Watch out for some action, soon, notes Tamal Bandyopadhyay.
he hike in service tax rate from 12.5 per cent to 14 per cent will increase the costs of buying
Among the Sensex constituents, 20 stocks ended the session in green with HDFC Bank, Titan, Tech Mahindra, and Asian Paints being the major gainers. TCS, Maruti, Kotak Mahindra Bank and Bajaj Finserve were the other gainers. In contrast, SBI, Bharti Airtel, JSW Steel, PowerGrid, ITC and Reliance closed the trading with losses.
RBI's intention to keep its target inflation rate at 5% was the main reason behind keeping rates unchanged, says Adhil Shetty, CEO of BankBazaar.com.
With the revision, term deposit between 180-210 days less than Rs 1 crore (Rs 10 million) would now earn 7 per cent against existing 6.80 per cent, SBI said in a statement.
Go for short-term debt funds and fixed deposits, delay home or auto loans.
The RBI has, however, left the cash reserve ratio or bank rate, which is the amount of cash that banks have to park with the central bank to maintain prudential norms, unchanged at 6 per cent.
Realty firms and consultants hoped however that this would be the last round of monetary tightening by the central bank.
RBI Governor Raghuram Rajan is expected to express that cautiousness as he looks to manage expectations.
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.
Monetary Policy Committee keeps key interest rate (repo) unchanged at 4% for 7th consecutive time; Consequently, reverse repo rate too remains unchanged at 3.35%; Bank rate also remains same at 4.25%;
With the economy heading for a double-digit inflation due to the spiralling food prices and costlier fuels and manufactured articles, the Reserve Bank is expected to hike its key policy rates next month, say leading economists.
The NSE Nifty, after shuttling between 10,331.80 and 10,227.45, finally settled 196.75 points, or 1.94 points higher at 10,325.15.
'Even if there is a third wave or a fourth wave, it is hard to see the economy will suffer like that (during the first wave).'
At least a 25 basis points hike can be expected on the October 5 policy
Expressing concern over the increase in short-term lending and borrowing rates by 0.25%, industry chamber FICCI on Tuesday said the move could slow down the growth momentum of the country.
The liquidity in the banking system moved into surplus almost after three months as the Reserve Bank of India (RBI) absorbed over Rs 40,000 crore from the market on Monday, predominantly on the back of increased government spending. However, this situation may be short-lived given the higher demand for funds to pay taxes and year-end targets, treasury executives said. Meanwhile, two variable reverse repo rate (VRRR) auctions held on Tuesday received weak response.
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As many as nine respondents said RBI would hold the repo rate at 8% till March-end, 2015
The Reserve Bank of India is widely expected to reduce the repo rate for the first time in nine months when it announces its third quarter policy review.
Inflation breached the upper end of the RBI's comfort level of 4 per cent plus-minus two percentage points.
If you don't have a specific goal, but want intermittent liquidity, then ladder your FDs, that is, invest in FDs of varying maturities, such as one, two, three, five or even 10 years. Laddering ensures FDs mature at regular intervals.
Longer-tenure FDs generally give higher returns. Nonetheless, going for a tenure higher than two to three years is not advisable.
A cut in the CRR will help banks release their funds stuck with the RBI on which they do not get any interest from the regulator.
MMFs invest in fixed-income instruments maturing in less than one year, minimising interest-rate risk.
Further hike will depend on the RBI's assessment
Bankers, who spoke to PTI, point to the above indicators and aver the Reserve Bank of India is unlikely to hike reverse repo and repo rates this month.
The cut in the policy rate by RBI will help lower interest rates
Repo rate may well end 2013 at 8 per cent, where it had begun the year.
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.
Forecasting that inflation is inching towards zero, ICICI Bank managing director and chief executive officer K V Kamath on Tuesday suggested to the Reserve Bank of India to further cut key policy rates by 100 basis points as part of a calibrated move to usher in a low interest rate regime.
While the rate increase was beyond Street expectations, it would put further pressure on demand and profitability of firms in rate-sensitive segments.
BofA-ML said the liquidity deficit is running higher than the forecasts because the RBI has suspended its bond buybacks or open market operations.
Investors who decide to enter medium to long-duration funds should be cognisant of the risk.
The Reserve Bank has kept the key policy rates unchanged in its Mid-Quarter Monetary Policy Review.
The RBI has targeted consumer price inflation at 6 per cent by January and 4 per cent by March 2018.
The central bank may increase both repo and reverse repo rates by another 25 basis points each in the next policy meeting.
Reserve Bank of India on Friday raised short-term lending and borrowing rates.
Expressing disappointment over RBI's decision to hike the key policy rate, real estate developers said this would lead to increase in finance cost and also affect housing demand during the festive season.
Real estate developers and consultants on Tuesday said RBI's decision to hike policy rates by 25 basis points will affect the sentiment of the property market, but they do not foresee any major impact on housing demand and prices.
They sought further cut in interest rates as well as reforms.
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