RBI
RBI cautions against fraud using its name
The Reserve Bank of India warns the public about fraudsters falsely using its name through fake letterheads, emails, and calls. These criminals impersonate RBI employees to steal personal and banking details. RBI also identifies unauthorized digital lending apps and financial service providers pretending to be registered with the regulator.
Why does RBI’s position on rate cuts remain difficult despite rising possibility of Fed rate cuts in September?
The US Fed, in its Jackson Hole speech, signaled a likely rate cut beginning in September, prompting the US 10-year yield to soften and the dollar index to fall to a seven-month low. Despite this, Indian 10-year G-sec yields have remained steady. This is due to the RBI’s limited ability to adjust its monetary stance, influenced by India’s unique supply-driven inflation dynamics.
RBI monitoring credit market, will act on issues proactively: Das
When asked about the slower pace of deposit growth as compared to credit growth, the RBI governor also said that banks were mindful of the issue and taking necessary actions, Das said that banks should be allowed time for the results to show.
Powell signals Fed pivot: Will the MPC follow suit?
The Fed chief's dovish message and the onset of a rate-cutting cycle are expected to support rate cuts by India's Monetary Policy Committee. In fact, two independent MPC members had already advocated strongly for rate reductions during the August monetary policy meeting. As a result, the case for cutting rates will likely gain momentum. India's CPI inflation fell to 3.54% in July, comfortably within the RBI’s 4% inflation target.
NPCI launches ATM products; BBPS renamed Bharat Connect
The National Payments Corporation of India (NPCI) introduced new products to transform ATM infrastructure, including UPI interoperable cash deposits and digital banking units. Customers can now deposit cash at ATMs using UPI without a physical card. Additionally, RBI has rebranded the Bharat Bill Payment System to Bharat Connect, while open architecture ATMs will offer various banking services.
REC, PFC shares rise 4% on RBI's plan to ease stricter infrastructure funding norms
Shares of PFC and REC rose over 4% on BSE as the RBI considers a staggered approach to increasing provisioning requirements for project financing. This move aims to mitigate the impact on lenders and avoid making projects unviable.
RBI’s steeplechase with cyclical and structural hurdles
As the RBI intensifies its regulatory tightening, the banking sector will need to negotiate with slower growth, lower margins, and rising credit costs. The central bank is also concerned about the recent spurts in prices of milk and mobile tariffs, which can permeate into broader inflation impetus.
RBI ignores 'Global Dangal' in MPC meet. What does it mean for stock market investors?
Despite recent global market volatility and dovish signals from other central banks, the RBI MPC kept policy rates and stance unchanged, meeting market expectations and having a neutral impact on stock investors. Markets have been volatile recently due to US recession fears and the unwinding of the Japanese yen carry trade.
More banks may get into AMC biz after RBI nod to IndusInd Bank
IndusInd Bank received approval from the Reserve Bank of India to set up a wholly-owned asset management business, a first for a mainstream lender. This move could signal more opportunities for other banks looking to diversify into para-banking sectors. The RBI had earlier allowed HDFC and ICICI Bank to increase stakes in insurance subsidiaries.
RBI to keep rates unchanged, retain stance amid food inflation: Goldman Sachs
Goldman Sachs expects the Reserve Bank of India to maintain interest rates and its withdrawal of accommodation stance at the August 8 meeting due to ongoing food inflation concerns. Despite a decline in core inflation, broad-based food inflation has kept headline inflation around 5% YoY in H1 CY24.
IndusInd Bank gets RBI nod to set up mutual fund asset management business
IndusInd Bank has been granted permission by the Reserve Bank of India to invest equity capital into this new venture. Despite this development, IndusInd Bank's shares dropped by 1.07% to Rs 1,349.60 on the NSE. The bank continues to show financial growth.
Ample space for FPIs in debt, says RBI after exclusion of some bonds from FAR category
The introduction of the Fully Accessible Route category of government bonds has been cited by JP Morgan and Bloomberg as a major reason for including Indian sovereign debt in their bond indices. The RBI had introduced the category in 2020. Only FAR bonds are eligible for inclusion in the global bond indices
Sensex falls 300 pts, Nifty below 24,200 as RBI keeps repo rate unchanged
Following the RBI's decision to keep interest rates unchanged and maintain the withdrawal of accommodation stance, Sensex and Nifty saw declines. RBI Governor Shaktikanta Das noted market alignment with RBI policies. Despite steady inflation and GDP growth forecasts, specific stocks like Infosys and Apollo Tyres experienced notable losses. Investors remain cautious amid global economic concerns.
After two years of RBI’s regulatory tightening, ready for selective re-rating? 6 financial service stocks with upside potential of up to 29%
If one looks in bits and pieces, it might not appear to be significant, but put all of them together and then one would realize that in the last two and half years, RBI has tightened each and every segment of the financial services industry. Whether it is housing finance, unsecured loan or gold loan, all of them have gone through an exercise where the bar of regulatory requirements has been raised. So, whether it is the requirement of the capital for a business or monitoring the end use for which the money is being raised.
More tightening on the way for NBFC? Stay with stronger balance sheets, 5 NBFC stocks with an upside potential of up to 29%
Choosing the right company in any sector is extremely important but when it comes to investing in NBFC stocks, it is extremely important to check on things like quality of balance sheet and parentage. There is a very clear lesson from history, if you bought Bajaj finance, wealth creation happened, if you bought DHFL then wealth destruction happened. The question would arise, why buy NBFC if it has such risks? The answer is simple, as a sector NBFC will grow at a faster rate than a number of sectors. Why will the growth be faster? Because they provide credit and credit was / is / will remain more in demand than supply. So, a provider of credit is bound to grow as the Indian economy grows
More tightening on the way for NBFC ? Stay with stronger balance sheets, 5 NBFC stocks with an upside potential of up to 29%
Choosing the right company in any sector is extremely important but when it comes to investing in NBFC stocks, it is extremely important to check on things like quality of balance sheet and parentage. There is a very clear lesson from history, if you bought Bajaj finance, wealth creation happened, if you bought DHFL then wealth destruction happened. The question would arise, why buy NBFC if it has such risks? The answer is simple, as a sector NBFC will grow at a faster rate than a number of sectors. Why will the growth be faster? Because they provide credit and credit was / is / will remain more in demand than supply. So, a provider of credit is bound to grow as the Indian economy grows
Bears edge out bulls amid wild swings on D-Street
On Tuesday, Indian markets closed lower, with the Nifty dipping below 24,000 for the first time in six weeks. Despite gains in Asian markets, local equities failed to sustain growth due to concerns over US economic conditions and geopolitical issues. Foreign investors continued to sell, weakening the rupee further.
Hawkish RBI rattles D-Street: Sensex tumbles 582 points, Nifty below 24,150
The RBI kept rates unchanged for the ninth consecutive meeting and maintained its 'withdrawal of accommodation' policy stance. Governor Shaktikanta Das cautioned against complacency despite the easing of core inflation, noting that the pace of inflation moderation has been slow. The market capitalisation of all listed companies on BSE dropped by Rs 2.8 lakh crore to Rs 445.77 lakh crore.
RBI steps up measures to drain out excess liquidity
RBI takes measures to manage liquidity as foreign inflows increase post JP Morgan index inclusion. Actions include selling government bonds and conducting sell-buy swaps in the forwards market. These steps aim to control rupee appreciation and excess liquidity in the banking system.
RBI wants to make unified Payment Interface (UPI) and RuPay truly global, says RBI governor
UPI is an instant real-time payment system developed by NPCI to facilitate inter-bank transactions through mobile phones. NPCI backed RuPay debit and credit cards compete with international networks like Visa and Mastercard. Speaking at the same Fintech Fest, the Governor also said RBI will focus on strengthening financial infrastructure, including cross-border payment systems. “India, with its tech talent and evolved fintech ecosystem, holds the potential to serve as a global hub for digital innovation and fintech startups,” he said.
RBI MPC Minutes: Food inflation pressures showing little signs of abatement, warns RBI
The Reserve Bank of India’s latest Monetary Policy Committee meeting minutes revealed that headline inflation rose to 5.1% in June, driven by food prices. Although future inflation might be lower due to the base effect, persistent food inflation remains a concern. The RBI has kept the repo rate unchanged at 6.5% to monitor these economic conditions.
IDBI Bank shares rise 7% after RBI submits 'Fit & Proper' report
IDBI Bank's shares surged 7% to Rs 94 on BSE after RBI approved 'fit and proper' bidders ahead of Union Budget 2024. The bank, earmarked for privatization, awaited RBI's nod for bidders meeting regulatory norms to progress in the privatization process.
To cut or not to cut: Is there a concerted effort by Asian central banks, RBI included, to keep the monetary guard up?
The debate over whether the Reserve Bank of India (RBI) should cut interest rates has intensified. The RBI has held rates steady for eight consecutive meetings, with dissenting members warning of potential repercussions from inaction. The core issue is whether the RBI should prioritize combating food inflation by maintaining high rates or consider rate cuts by focusing on non-food inflation and economic stability.
Expect new MPC members to be in place in time: Shaktikanta Das
Reserve Bank Governor Shaktikanta Das anticipates the timely appointment of new external members to the Monetary Policy Committee (MPC) before its scheduled meeting on October 7. The terms of three current external members end on October 4. The MPC, which includes six members, votes on rate decisions, with recent meetings showing dissent over rate cuts versus inflation control.
Paytm soars 10%, hits upper circuit after govt approves FDI proposal for payment aggregator biz
Paytm FDI Proposal Approved: Shares of fintech major Paytm surged up to 10% intraday on Friday following government approval of its foreign direct investment (FDI) proposal for the payment aggregator business. The financial services secretary announced that Paytm can now approach the Reserve Bank to seek the payment aggregator license, which will undergo further evaluation.
Q1 GDP growth slips to 6.7%, misses projection; RBI says govt expenditure, agriculture likely cause
Bhubaneswar, Odisha: "For the first quarter this year, the Reserve Bank's projection was 7.1%. But the actual number which has been given by the National Statistical Office is 6.7%. Now, 6.7% would give an impression that it is lower than 7.1%. I think in all the sectors, the growth is 7% plus in the first quarter. Two aspects have slightly pulled it down, one is government expenditure, which is both central government and state government expenditure. The other thing which was slightly lower was agriculture, which grew at about 2% or so," RBI Governor Shaktikanta Das said.Q1 GDP growth slips to 6.7%, misses projection; RBI says govt expenditure, agriculture likely cause
Final guidelines on project loans likely in 2-3 months: RBI official
The final guidelines for project loans are expected to be announced in the next two to three months, according to a senior RBI official. The official added that the Expected Credit Loss-based provisioning norms are also in advanced stages of discussion. Up to 60 responses have been received on the draft guidelines, which are currently being reviewed.
Responsible lending is as important as responsible borrowing: RBI official
A senior RBI official emphasised the need for responsible lending to build consumer trust and protection in digital lending using AI/ML models. With AI's growing role in credit assessment, banks need to focus on governance and financial literacy. Digital lending is expected to surpass $1 trillion by 2030.
RBI's Michael Patra on what'll largely finance India's investment needs in coming decades
RBI Deputy Governor Michael Debabrata Patra said domestic saving will continue to largely finance India's investment needs. While household financial savings dipped during the pandemic, they are on the rise again. The corporate sector's net borrowing may increase, with household and external resources meeting financing requirements.
RBI imposes penalties on Housing and Urban Development Corporation, 2 others
The Reserve Bank of India has imposed penalties on three entities, including Housing and Urban Development Corporation Ltd, for non-compliance with specific regulatory provisions. Housing and Urban Development Corporation Ltd faces a penalty of Rs 3.5 lakh, while Godrej Housing and Aadhar Housing Finance Ltd have been fined Rs 5 lakh each.
Why is investor Madhu Kela supportive of F&O market curbs on speculative trading?
Madhusudan Kela has over Rs 2,092.2 crore invested in various stocks. He suggests increasing the lot size in the stock market to deter excessive retail participation. He believes this would be a better solution than imposing additional taxes, which he considers excessive and harmful to the market.
Large offshore investment write-offs trigger RBI alert
The Reserve Bank of India is scrutinizing large write-offs of overseas investments by several companies, suspecting these might not be genuine business decisions. Concerns arise as some firms may have used the 'overseas direct investment' route to transfer funds abroad, bypassing regulations. The RBI is ensuring compliance with mandatory audit reports and valuation confirmations to validate the legitimacy of these investments. New overseas investment rules from August 2022 allow automatic write-offs, but recent cases under review are from prior to 2022. The RBI's vigilance aims to uncover potentially fraudulent fund movements.
Rupee ends nearly flat as RBI absorbs importers' dollar demand
The rupee ended at 83.9825 to the U.S. dollar compared to 83.9650 in the previous session. Intraday volatility was muted, similar to the activity in recent sessions, with the local currency trading in a 2 paisa range.
RBI Guv Shaktikanta Das attributes India's Q1 GDP fall to EC model code of conduct, reduced spending; says 'growth story is intact'
India's GDP growth slowed to 6.7% in the April-June quarter, down from 8.2% a year ago, primarily due to decreased government spending amid the Lok Sabha elections. Despite this, key sectors like consumption and manufacturing showed strong performance. RBI Governor Shaktikanta Das remains confident in achieving the 7.2% annual growth target, supported by anticipated increases in government expenditure and positive trends in agriculture.
Fall in Q1 GDP numbers is because of elections code and restricted govt expenditure: RBI Governor
RBI Governor Shaktikanta Das stated that India's growth story remains strong despite a slight dip in GDP due to reduced government spending during the election season. He expressed confidence in achieving a 7.2 per cent growth projection for this fiscal year, driven by promising performance in various sectors.
RBI buying back SGBs: Should you tender?
The Reserve Bank of India has decided to offer early redemptions for 30 Sovereign Gold Bond series maturing from October 2024 to March 2025. Investors can choose to withdraw early starting September 2024. Financial experts advise against early redemption to maximize benefits, as past bond holders earned an average return of 10.94%.
RBI appoints additional director for Bandhan Bank
The move is likely to guide the bank in succession planning. Bandhan Bank’s founder MD & CEO Chandra Shekhar Ghosh’s tenure will on July 9 while the bank is yet to appoint its next CEO. Singh is former chief general manager of RBI.
Rupee ends weaker as markets assess Fed path, RBI's approach
The rupee closed at 83.9675 to the U.S. dollar, down from 83.9175 in the previous session. The currency's intraday volatility remained muted, holding a range of three paisa through the session.
RBI will have its say whenever digital lending creates risk
The RBI supports digital technologies for improved customer experience and innovation, yet intervenes when digital lending poses risks. RBI Deputy Governor Swaminathan J highlighted issues with peer-to-peer lending platforms, urging the industry to view the regulator as a partner for a stable financial ecosystem. He spoke at a CNBC TV18 banking summit.
RBI's mandate for fintech SRO; Instamart’s new CEO
The Reserve Bank of India (RBI) expects self-regulatory organisations (SROs) to safeguard consumer interest and ensure responsible growth in the fintech sector. More on this on today’s ETtech Top 5.
RBI for periodic revision of deposit insurance coverage
RBI Deputy Governor M Rajeshwar Rao indicated the need for periodic increases in the deposit insurance coverage limit due to factors such as inflation and income growth. He noted that 97.8% of accounts in India are fully protected, surpassing the global standard of 80%. He also discussed the possible challenges of implementing risk-based premiums in India's varied banking sector.
RBI issues draft norms to rationalise export-import transactions
Banks under new regulations can flag exporters with outstanding amounts, ensuring timely realization of proceeds. Transparency and efficiency are prioritized in export-import transactions, benefiting businesses of all sizes.
LGBTQ persons can open joint bank account: FinMin advisory
The finance ministry has clarified that there are no restrictions for LGBTQ individuals to open joint bank accounts or nominate partners in a queer relationship as nominees. This advisory follows a Supreme Court order from October 2023. The Reserve Bank of India has also issued guidance to all banks on this matter.
India Playbook 2024 – Budget FY25 to focus on affordable housing
One big change in the final budget could be an increase in rural expenditure including higher spends on affordable housing. RBI’s extraordinary dividend of Rs 2.1 lakh crore and impressive tax collections give the government the power to increase expenditure and still stick to its prudent policy of lowering the fiscal deficit.
Banks to soon raise Rs 40,000 crore; slew of QIPs lined up
Mumbai: Banks plan to collectively raise ₹40,000 crore in the second half for expansion. PNB, Union Bank, and others seek approval at AGMs, adhering to RBI norms. Analysts discuss government shareholding, PNB's sequential growth, fundraising plans, and premium valuations from Motilal Oswal, Dolat Capital, and Ashika Stock Broking for credit growth.
PayGlocal gets RBI nod to operate as online merchant payments company
PayGlocal is an international payments-focused startup and has also applied for a cross-border payments licence. That application is still being processed by the central bank. The company expects to receive this licence in due course from the Reserve Bank of India (RBI).
RBI Monetary Policy: RBI leaves inflation projection for FY25 unchanged at 4.5%
RBI MPC Meeting Inflation Target: The Reserve Bank of India, maintaining an inflation forecast of 4.5%, kept its key lending rate steady at 6.5%. Despite food price increases and global tensions impacting crude prices, the decision focuses on price stability and growth. RBI Governor Shaktikanta Das highlighted recent monsoon developments and core inflation moderation as key influences.
We are now focusing on making the UPI and the RuPay truly global: RBI Governor Shaktikanta Das | Live
RBI Governor Shaktikanta Das speaks at the 2024 Global Fintech Fest. The Global Fintech Fest (GFF) is one of the largest fintech conferences, organised annually by the Payments Council of India (PCI), the National Payments Corporation of India (NPCI), and the Fintech Convergence Council (FCC). The fifth edition of the conference has been designed around the theme 'Blueprint for the next decade of finance: Responsible AI, Inclusive, Resilient.'We are now focusing on making the UPI and the RuPay truly global: RBI Governor Shaktikanta Das | Live
Outgoing RBI policymaker contradicts central bank on food risks
Jayanth Rama Varma — an academic whose four-year term as an external member on the monetary policy committee comes to an end in early October — said over the past year or so, “food inflation has consisted largely of transient spikes that do not spill over into core inflation.”
RBI looks to soften blow of tighter infrastructure funding rules
RBI is considering a phased approach to increasing provisioning for project financing to ease the impact on lenders and protect profitability. Projects nearing completion may receive some leniency. Despite pushback from lenders and the finance ministry, the RBI is committed to raising provisions to address risks in a sector known for delays, while avoiding cost escalations that could jeopardize project viability.
The yield curve and what to bear in mind
Now, the market has been divided into which part of the curve to remain focussed on, as the yield curve has flattened. Whether you take 1y Tbill or 30yGSEC, the rates are around 7%, give or take. The RBI repo rate as everyone knows, is 6.5% - the next move, we and the market believe, will be down, but the timing is not clear basis current inflationary dynamics
Retail, services loans slow as RBI measures make banks cautious
The Reserve Bank's regulatory measures are influencing commercial banks' lending patterns. Loans to industry and agriculture have grown significantly in July 2024, while credit to services and retail sectors has slowed. Credit to housing accelerated despite a moderation in unsecured and vehicle loans.
RBI imposes Rs 2.68 cr penalty on UCO Bank
The Reserve Bank of India has levied penalties on two banks: Rs 2.68 crore on UCO Bank for violating rules on current accounts, interest on deposits, and fraud classification, and Rs 2.1 lakh on Cent Bank Home Finance Ltd for not complying with KYC regulations. These penalties underline regulatory compliance without affecting the validity of customer transactions.
Jio Financial Services shares rise nearly 3% after RBI approval as core investment company
Jio Financial Share Price: Shares of Jio Financial Services rose 2.5% to Rs 256.5 on BSE after RBI approved its conversion from NBFC to CIC post a November 2023 application. CICs must have Rs 100 crore in assets and 90% in investments. RSI is 44.1, MACD 1.2 below signal line, stock above multiple SMAs except 20-, 30-, 50-day; price at 10:25 am Rs 351.6.
New system to ease FPI access to Gsecs awaits RBI nod
Foreign investors seek improved access to Indian bonds through global platforms, awaiting RBI approval. The new model aims for efficient trading with straight-through processing on the NDS-OM platform.
Decline in loan to deposits ratios in banks is because of lower money creation by RBI and substantial increase in banks profits: Nomura
The decline in loan-to-deposit ratios (LDR) within the banking system has been attributed to lower money creation by the Reserve Bank of India (RBI) and higher profits accrued by banks over the past two years, according to a Nomura report.
RBI Unveils ULI: Platform for seamless lending to ease credit for MSMEs & farmers
While delivering the keynote address at the Global Conference on Digital Public Infrastructure and Emerging Technologies, a part of RBI@90 initiative in Bangalore. RBI Governor Shaktikanta Das, on Monday, informed about the Reserve Bank of India's Unified Lending Interface (ULI), a new platform the central bank is developing for "frictionless credit". This platform is now in its pilot stage and is due to be launched nationwide.RBI Unveils ULI: Platform for seamless lending to ease credit for MSMEs & farmers
MPC should pay more heed to core inflation, says Ashima Goyal
Ashima Goyal, a member of the Monetary Policy Committee (MPC), emphasized the need to focus more on core inflation due to its significant impact on household inflation expectations. Goyal's term on the MPC will end in early October. Additionally, she suggested that the MPC should expand its role to include providing guidance on liquidity conditions in the banking system.
LCR plan: Banks ask RBI to reduce 'run off' factor increase
In recent feedback to the RBI, banks have suggested that the regulator impose an additional "run-off factor" of 2% to 2.25% as against the 5% increase prescribed in a recent draft guideline, sources aware of the development told ET. "Some banks have also proposed a gradual increase of three years in maintaining the liquid stocks under the new LCR (Liquidity Coverage Ratio) norms. They have requested a similar proportion of requests for other categories," a banker said on condition of anonymity.
RBI issues guidelines for foreign investors looking at Sovereign Green Bonds
The Reserve Bank of India (RBI) has laid the ground rules for selling sovereign green bonds to foreign investors through International Financial Services Centre, better known as Gift City
Budget strikes right balance between fiscal prudence, stability; will boost growth: RBI Paper
The Reserve Bank of India (RBI) has praised the Union Budget 2024-25 for striking the right balance between fiscal prudence and macroeconomic stability, thereby strengthening the medium-term growth outlook. The budget aims to further strengthen macroeconomic stability and harness the potential in various sectors of the economy. The Union Budget 2024-25 narrows the fiscal deficit to 4.9%, reaffirming fiscal consolidation and aiming to maintain the Union government debt as a percentage of GDP on a declining path.
RBI recognises FACE as self-regulatory organisation in FinTech sector
The Reserve Bank of India has designated the Fintech Association for Consumer Empowerment (FACE) as a Self-Regulatory Organisation in the FinTech Sector. The RBI received three applications, including FACE, for this recognition, and one application has been returned for resubmission. The governor indicated that more such organisations could be approved in the future.
RBI plans to implement uniform licensing for online and offline payment aggregators
The Reserve Bank of India will streamline its licensing process for payment aggregators by merging requirements for online and offline entities. This unified license aims to facilitate seamless operations across both domains. The RBI stresses the need for secure transactions and plans to integrate Aadhaar-enabled Payment Systems with POS machines to boost financial inclusion in rural areas.
RBI’s ASISO system faces glitch
The RBI faced a technical glitch in the Automatic Sweep-In and Sweep-Out (ASISO) facility, impacting banks' funds visibility. Daily money market data publication was delayed. The RBI is resolving the issue to reconcile banks' outstanding transactions. Market participants, bank treasury executives, and sources are monitoring the situation. The glitch occurred before the usual 9 a.m. data publication time.
India's forex reserves hit a fresh high of $683.99 bn: RBI data
India's forex reserves have risen for the third consecutive week, driven by strong dollar inflows. The reserves increased by $13.9 billion over three weeks, with a notable $5.5 billion inflow on August 30 due to MSCI rebalancing. Foreign currency assets rose by $1.49 billion to $599 billion, and gold reserves increased by $893 million to $61 billion.
India's forex reserves jump $ 2.3 bn to hit new all-time high of $ 683.99 billion
India's foreign exchange reserves increased by $2.3 billion to a new record of $683.99 billion for the week ending August 30, according to the Reserve Bank of India (RBI). This follows a previous rise of $7.02 billion to $681.69 billion the week before.
Rupee hits record low amid negative global cues; RBI support aids
The rupee lifetime low of 83.98 to the U.S. dollar in the last minute of trade. It closed at 83.9650, versus its previous close of 83.9675, having stayed in a narrow three-paisa range throughout the session.
Why banks are under the gun to beat mutual funds and emerge out of a big threat
The Indian banking sector is struggling to attract deposits due to competition from mutual funds offering higher returns. Regulatory restrictions limit banks' ability to provide attractive returns, leading to a shift in investor preferences. Banks are exploring new strategies to address this challenge and maintain stability.
Banks selling IPO shares within a week, experts call for RBI explanation
Amid a surge in number and demand of Initial Public offerings (IPOs) in the Indian stock market, a recent SEBI report has revealed some interesting behaviour of investors in the IPO market.
RBI governor Shaktikanta Das stresses need to complete 'last mile' in disinflation to maintain credibility
RBI Governor Shaktikanta Das highlighted the need to address the 'last mile' in disinflation at a FICCI and IBA conference. He urged private sector investments and customized financial products for MSMEs while expressing optimism about India's long-term growth driven by infrastructure development.
4 Fed rate cuts in the offing; for 3-5-year investors, every dip is a buy for India: Vikash Kumar Jain, CLSA
Investment Analyst Vikash Kumar Jain from CLSA predicts four rate cuts by the US Fed in the remaining three meetings this year. He advises long-term investors to consider buying dips in the Indian market, emphasizing India's strong fundamentals. He also highlights potential opportunities in non-expensive rate-sensitive sectors. Further, post elections, all the sectors that are not seen as Modi sectors are the ones that are leading the pack.
Ganesh Chaturthi bank holiday: Are banks open or closed this Saturday, September 7?
Ganesh Chaturthi bank holiday: It's the first Saturday of the month, but banks in several states are closed for Ganesh Chaturthi, even though it's a typical working Saturday.
How balanced is the surplus Balance of Payments!
RBI's BoP data shows a $5.7 bn surplus for March 2024, driven by service exports and $107 bn remittances. It reverses an $8.7 bn deficit. Fiscal year's deficit is $23.3 bn. Merchandise trade deficit narrowed. Despite the surplus, net FDI flows dropped, and rupee appreciation is unlikely. Global Captive Centers indicate services expansion, but domestic manufacturing growth remains subdued.
India to name new MPC members soon, dissenters from Shaktikanta Das' rate policy team to leave before crucial meet
RBI MPC Members: India's government is set to appoint new external members to the Reserve Bank of India's monetary policy committee by October. The selection panel will recommend candidates soon, with announcements expected by September's end. This move follows a global shift in central bank policies and comes before a crucial meeting on interest rates.
7 at 7: Rate cuts from Washington to Frankfurt, India’s IPO frenzy
From interest rate cuts across the world, to China’s challenge to Wall Street investment banks; from an IPO frenzy in India to the Adani group’s plans to raise dollar funds; from the RBI governor’s confidence on India’s economic growth to the latest on the storm surrounding Madhabi Puri Buch; here’s your news capsule for the day.7 at 7: Rate cuts from Washington to Frankfurt, India’s IPO frenzy
FSDC panel reviews macro developments
The Financial Stability and Development Council's sub-committee, chaired by RBI Governor Shaktikanta Das, reviewed key global and domestic macroeconomic and financial developments. They discussed inter-regulatory coordination and potential risks to financial stability, focusing on improving resilience amid emerging challenges like global spillovers, cyber hazards, and climate change.
RBI expands e-mandate framework to include auto-replenishment for FASTag and NCMC
The RBI announced on Thursday that auto replenishment of balances in FASTag and NCMC, which trigger whenever the balance drops below a customer-defined threshold, will now be covered under the existing e-mandate framework.
AU Small Finance Bank submits application to RBI for voluntary transition to universal bank
AU Small Finance Bank has applied to the Reserve Bank of India for voluntary transition to a universal bank. This change would ease regulatory norms, including lower capital adequacy requirements and reduced priority sector lending obligations. Only AU and Ujjivan Small Finance Bank meet the eligibility criteria set by RBI in April.
Aadhaar to be common framework to onboard customers for financial products: Senior RBI official
Aadhaar will streamline the KYC process for financial products by addressing document redundancies, according to a senior RBI executive. The National Payments Council of India is working on this mandate but needs more time for clarity. Meanwhile, fintechs are encouraged to innovate in cross-border solutions and engage with regulators if needed, he adds.
India retained its growth momentum in Q1 of FY25, says FinMin's monthly economic review
As highlighted by the report, India's key economic indicators present a positive outlook, underpinned by robust domestic activity, improving external trade, and growing capital flows. It also showed that perceived employment conditions show mixed signals, overall growth indicators suggest sustained momentum as FY25 progresses.
RBI may push back rate cuts a bit; a 25 bps cut possible in next few months: Jeremy Zook, Fitch
Fitch Ratings' Jeremy Zook anticipates a 25 basis points rate cut in the coming months, though this could be delayed due to persistent food inflation. Despite a slight dip in Q1 GDP, Fitch maintains a strong growth forecast for India. Private capex remains crucial for sustained medium-term growth and potential ratings upgrade.
Tax on external remittances slashes Indians' overseas spending by 44%
The tax on external remittances from India has led to a notable drop in spending abroad. In June 2024, total remittances fell 44% to $2.2 billion from $3.9 billion the previous year, and 8% from $2.4 billion in May. Key categories like travel and studies abroad experienced significant declines.
India at critical juncture, geared for orbital shift; massive changes taking place: Shaktikanta Das at FICCI event
RBI Governor Shaktikanta Das addressed the FIBAC 2024 event, highlighting India's economic growth prospects and the need to cut down on noise around growth debates. He noted strong rebounds in private consumption and investment, despite muted public spending. Das emphasised the continued strength of industry and services sectors.
Banks up tech hiring with RBI pushing for enhanced risk management
In response to the RBI's increasing focus on financial sector stability, banks are bulking up their technology capabilities by expanding their tech teams and increasing IT investments. This comes amid the growing importance of cybersecurity and the need to adopt AI-driven services, which are becoming essential components of the banking industry.
Morning Brief Podcast: Is the P2P lending industry dying?
Peer-to-peer lending in India was supposed to be a game-changer—connecting borrowers and lenders directly and bypassing banks. But the business is now facing major turbulence. On August 16th, the RBI issued a new mandate that could reshape the future of P2P lending in India, leaving many to wonder if this is a turning point or the beginning of the end. Join The Morning Brief as host Anirban Chowdhury discusses what lies ahead for this emerging sector with ET’s fintech expert Pratik Bhakta and Mukesh Bubna of P2P lending firm Monexo.Morning Brief Podcast: Is the P2P lending industry dying?
RBI MPC Live Updates - RBI Monetary Policy Meeting: Premature to talk about recession in US but we are watchful, says Shaktikanta Das in post-MPC meet presser
RBI MPC Meet LIVE: The Reserve Bank of India's Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged at 6.5% for the ninth consecutive time. RBI Governor Shaktikanta Das announced the decision, which was made with a 4:2 majority. The MPC also decided to retain the withdrawal of accommodation stance. "We are seeing good convergence between market expectations and RBI policies; they are well aligned," Das stated.Interest Rates Unchanged: The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) has decided to keep its key interest rate and policy stance unchanged, aligning with expectations. The repo rate remains steady at 6.50% for the ninth consecutive time. Withdrawal of Accommodation Stance: The MPC continues with its 'withdrawal of accommodation' stance, emphasizing the importance of vigilance against risks while maintaining current monetary policies. MPC Meeting and Decision: The MPC, comprising three RBI members and three external experts, met from August 5-7 and voted 4:2 to maintain the repo rate at 6.50%. The Standing Deposit Facility (SDF) rate stays at 6.25%, and both the Marginal Standing Facility (MSF) rate and Bank Rate remain at 6.75%. Focus on Inflation: Governor Shaktikanta Das highlighted that inflation, particularly food inflation, remains a concern, noting that food prices significantly impact headline inflation. Despite a drop in core inflation, vigilance is necessary. Inflation and Growth Projections: The RBI maintains the inflation forecast for FY25 at 4.5%, with quarterly adjustments: Q2 inflation revised to 4.4% (from 3.8%), Q3 to 4.7% (from 4.6%), and Q4 eased to 4.3% (from 4.5%). The GDP growth forecast for FY25 stays at 7.2%, with Q1 slightly reduced to 7.2%. Economic Outlook: A relief in inflation is anticipated due to good kharif sowing and a favorable southwest monsoon. The real GDP for Q1FY26 is projected at 7.2%. Forex Reserves and UPI Tax Payment: India's foreign exchange reserves reached a record high of $675 billion as of August 2. The RBI has increased the UPI tax payment limit from Rs 1 lakh to Rs 5 lakh per transaction. Digital Lending and Cheque Clearing Initiatives: The RBI plans to establish a public repository for digital lending apps to curb unauthorized lenders. Additionally, a proposal to introduce continuous cheque clearing has been made. Governor's Concerns: Shaktikanta Das emphasized the need to monitor mobile tariffs and milk prices closely and expressed concern over rising top-up home loan disbursements, urging lenders to take corrective actions.
P2P investors take to social media to vent against new RBI rules
Some of Mobikwik’s investors have taken to social media channels like ‘X’ and Reddit to flag their concerns around changes in their investment terms and conditions. “Received an email today from MobiKwik regarding certain changes they have (made) to their P2P programme named ‘Xtra’ due to recent guidelines from the RBI. Now I can only see the principal amount and no option to withdraw it," wrote a user on Reddit on Tuesday.
A bigger share of bank deposits comes at higher rates now
Banks in India are offering higher interest rates on deposits to attract savers, with more than two-thirds of deposits earning 7% or above by June 2024. This shift is driven by the need to meet rising credit demand, which continues to outpace deposit growth.
Stress in some MFIs does not warrant regulatory action: Senior RBI official
The Reserve Bank of India reassures there is no systemic risk in the microfinance sector despite recent stress. Senior officials highlighted that concerns are entity-specific, and no strict regulatory action is planned. Ashima Goyal of the Monetary Policy Committee indicated non-performing assets are manageable and the banking system remains resilient.
RBI likely to issue final project finance guidelines in 2-3 months
The Reserve Bank of India is expected to release final guidelines soon on provisioning and accounting norms for project finance. Discussions are also ongoing for Expected Credit Loss guidelines. The RBI aims to implement new provisions at 5% in phases, addressing concerns from stakeholders about the increased costs for banks and borrowers.
Should the RBI Consider Raising Overseas Investment Limits for Mutual Funds?
These investments include international fund of funds (FoFs), direct equities, international ETFs, and domestic equity schemes. With the substantial increase in forex reserves, many believe that raising the overseas investment limits is both timely and necessary
At RBI’s door for reprieve: Bunch of foreign banks want ease of storing data, ask for mandate to be applied prospectively from Jan 2025
Foreign banks operating in India have requested the RBI to extend the compliance deadline for the 2018 data localization guidelines to January 2025. These guidelines require that all payment system data related to Indian customers be stored exclusively within India. The banks have already started complying with the rules for new transactions but face challenges in moving or deleting historical data stored abroad.
7 at 7: Russia-India trade; bank frauds
From Ukraine’s efforts to restructure its debt to Russia’s trade with India; from the World Bank’s optimism on India’s economy to banks’ efforts to clamp down on frauds; from the latest in the IPO boom to the defense ministry’ purchase of new equipment; here’s your news capsule for the day.7 at 7: Russia-India trade; bank frauds
View: India needs more lending — but not to everyone
India's Reserve Bank plans to introduce a 'unified lending interface' to expand digital payments into lending. This system aims to help farmers and small businesses access credit more easily. However, there are concerns about the potential impact on household debt, which is already rising.
WACR drops to 6.49% amid surplus liquidity, just below RBI repo rate
The weighted average call rate, which indicates banks' overnight cost of borrowing, closed at 6.49% on Thursday, slightly lower than the Reserve Bank of India's current repo rate of 6.50%, because of surplus liquidity conditions in the banking system, money market dealers said.
IDBI Bank hikes FD rate to 7.85% for 444-day tenure
IDBI Bank has raised its fixed deposit rate to 7.85% for a 444-day tenure and 7.75% for a 375-day tenure to attract more deposits. This offer, valid until September 30, 2024, makes the Utsav Fixed Deposit more attractive for customers. Other tenures under this scheme include 7.70% for 700 days and 7.55% for 300 days.
RBI Governor Shaktikanta Das ranked top central banker globally for the second consecutive year
Reserve Bank of India Governor Shaktikanta Das has been rated “A+” for the second consecutive year in the Global Finance Central Banker Report Cards 2024. The annual report, published by Global Finance since 1994, evaluates central bank governors from nearly 100 countries on inflation control, economic growth, currency stability, and interest rate management.
RBI leaves interest rates, stance unchanged for ninth straight time
The RBI kept interest rates unchanged for the ninth straight meeting due to inflation worries from high food prices. Economic growth outlook remained strong, but the central bank emphasized vigilance on inflation. The policy decision caused a decline in stock markets, highlighting ongoing concerns about inflation.
Abandoning RBI's inflation target regime could be risky, counterproductive: Research paper
Economists Barry Eichengreen and Poonam Gupta have highlighted the effectiveness of the Reserve Bank of India's (RBI) inflation targeting framework. They advised against switching to a discretionary regime and suggested reducing food-price inflation's weight in the CPI basket. The framework has contributed to lower, less volatile inflation and better-anchored expectations.
