Michael Patra's comments in the MPC minutes require a closer look. Patra said, "If inflation persists above the upper tolerance band for one more quarter, monetary policy will be constrained by mandate to undertake remedial action, including an immediate and more than proportionate response to head off the build-up of inflation pressures and prevent it from getting generalized." … [Read more...] about RBI MPC minutes point out chances of a prolonged pause; Is the rate cut season over?
Data shows a dramatic rise in deposits with the RBI by banks under the reverse repo route from a few thousand crores in January and February (Rs 41,214 crore as on January 1, 2020) to over Rs 6.3 lakh crore on May 28, 2020. This situation is highly detrimental to the bank’s profitability. Would the lack of credit-offtake result in banks easing lending rules? In such a scenario, wouldn’t banks be less stringent in terms of evaluation of project viabilities of loans applied for resulting in weak loans being sanctioned at the outset itself is a thought worth contemplating. … [Read more...] about COVID-19 impact | Sustenance of banking institutions at risk
The RBI Monetary Policy Committee (MPC) had left the repo rate unchanged at 4 percent and reverse repo rate at 3.35 percent in its August meeting. Since February 2019, the MPC has cut repo rate by a steep 250 basis points. One bps is one hundredth of a percentage point. … [Read more...] about RBI Governor Shaktikanta Das’ address highlights | ‘We haven’t exhausted our ammunition’
Mann Ki Baat LIVE Updates: Prime Minister Narendra Modi to address the nation at 11 am Anand Mahindra urges Centre to implement ‘wildlife bridges’ across highways in India Delhi L-G permits JEE, NEET exams in capital, despite state opposition: Report … [Read more...] about Former RBI Governor D Subbarao says bad bank not only necessary but unavoidable in present situation
"RBI formed the "COVID-19-related resolution framework" after taking into consideration financial health of banks as well as depositors. Businesses are in a lot of stress due to COVID-19 and if they fail, it will lead to financial instability. However, if businesses are saved, they will repay loans and, subsequently, save jobs," he said. … [Read more...] about FM Nirmala Sitharaman to review implementation of resolution framework for COVID-19 stress in bank loans