NEW DELHI -- India's central bank has announced a $24-billion windfall for the cash-strapped government, giving a much-needed boost to Prime Minister Narendra Modi as he seeks to kickstart growth in Asia's third-biggest economy. But the payout will likely stoke fresh concerns about the Reserve Bank of India's independence following a standoff that has seen top officials quit amid accusations of government interference. Modi has come under increasing pressure to fire the economy, which has slowed in each of the past 3 quarters -- losing its status as the world's fastest growing -- with unemployment hitting its highest level since the 1970s. The auto sector has been particularly badly hit, with car sales plunging in July for the ninth month running, while weak consumer spending has hit demand for everything from biscuits to hair oil. The RBI said it had approved a transfer of 1.76 trillion rupees ($24.4 billion) to government coffers, including a dividend of 1.23 trillion rupees and 526 … [Read more...] about India central bank unveils $24-billion windfall for government
India central bank
By Manoj Kumar NEW DELHI (Reuters) - The Reserve Bank of India's surprise decision to cut interest rates for the first time in 18 months on Thursday is a pre-election stimulus gift from a compliant central bank for Prime Minister Narendra Modi. But businesses and farmers - and even some of his own supporters - say it may be too little, too late to help the economy ahead of voting, which must be held by early May. The quarter-point reduction in the benchmark repo rate follows intense pressure late last year on the RBI to listen to government and business concerns and ease monetary policy. The threat to the central bank's autonomy led to the departure in December of its governor, Urjit Patel, and his replacement by Shaktikanta Das, whose views were much more in line with the Modi administration. There have been signs that Modi's support has crumbled in parts of a countryside that supported his Hindu nationalist Bharatiya Janata Party (BJP) in the last election in 2014. Among the … [Read more...] about India’s central bank delivers a pre-election rate cut gift to Modi but is it enough?
Updated 2:23 am CST, Thursday, February 7, 2019 A man walk past a Reserve Bank of India logo at their head office in Mumbai, India, Thursday, Feb. 7, 2019. India's central bank has lowered its key interest rate by a quarter of a percentage point to 6.25 percent, a step that is expected to boost the economy. less A man walk past a Reserve Bank of India logo at their head office in Mumbai, India, Thursday, Feb. 7, 2019. India's central bank has lowered its key interest rate by a quarter of a percentage point to 6.25 ... more Photo: Rajanish Kakade, AP Photo: Rajanish Kakade, AP Image 1 of / 4 Caption Close Image 1 of 4 A man walk past a Reserve Bank of India logo at their head office in Mumbai, India, Thursday, Feb. 7, 2019. India's central bank has lowered its key interest … [Read more...] about India’s central bank lowers key lending rate to 6.25 percent
By Suvashree Choudhury MUMBAI (Reuters) - Eleven Indian state-owned banks will have to wait for about a month before knowing which of them will have lending curbs eased after a Reserve Bank of India (RBI) panel reviews their December quarter results, an official with direct knowledge of the matter told Reuters on Thursday. The Indian government of Prime Minister Narendra Modi has been pressuring the central bank to ease the curbs on at least some of the banks in an attempt to boost lending and the economy ahead of a general election due to be held by May. The RBI's Board for Financial Supervision (BFS), chaired by the central bank's new Governor Shaktikanta Das, met on Thursday and looked at estimates for the financial performance of the banks in the October-December quarter. Based on those estimates, about three to four of these banks - which in recent years were targeted by the RBI for tough lending restrictions because of a surge in bad loans, capital depletion and mounting losses … [Read more...] about Exclusive: India central bank to eye December quarter results before easing lending curbs on some banks
By Aftab Ahmed and Manoj Kumar NEW DELHI (Reuters) - The Reserve Bank of India is accountable to the government and should make policies within the framework set by the government, according to a former central bank chief now heading a panel tasked with framing guidelines for the transfer of the RBI's surplus funds to the government. Bimal Jalan, the 77-year-old ex-bureaucrat, was appointed to chair the panel late last month, just weeks after a fierce row over central bank independence led to a change at the top of the RBI. Having clashed with the government over policy issues for several months, Urjit Patel resigned as governor on Dec. 10, and was swiftly replaced by a former finance ministry official, Shaktikanta Das. One of the most contentious issues between the RBI and Prime Minister Narendra Modi's government was how much of the profit made from central bank's trading in bonds and currencies should be transferred to the government, and how much should be retained to build up … [Read more...] about Exclusive: India central bank accountable to government, says reserves panel chairman