Rbi

RBI Governor Shaktikanta Das If you thought the good news stopped with the Budget 2023 slashing the tax burden on individuals, think again. The budget proposals are also likely to help stop the interest rate hikes by the Reserve Bank of India that have been raising your EMIs since last year. The Budget’s fiscal rectitude would be music to the ears of the members of RBI’s interest rate-setting panel. Finance Minister Nirmala Sitharaman not only met her deficit target for the current fiscal year and announced a lower target for the next but she also said that she would stick to the medium-term aim of below 4.5 percent of the GDP. The RBI’s monetary policy committee, which has been waging a war on red-hot inflation over the last year, is widely expected to raise interest rates by another 25 basis points when it meets February 6-8. The panel has raised interest rates by 225 basis points since April 2022. In October, the central bank failed to meet its inflation mandate after … [Read more...] about How Budget 2023 paves the way for RBI to pause rate hike after February

Adani group's stocks have nosedived after the Hindenburg report's release The Reserve Bank of India (RBI) is looking into the details of banks' exposure to Adani group companies and has sought the present status of these loans, people familiar with the matter told Moneycontrol . The RBI has already reached out to some of the major banks which are the lenders to the group and is engaging with lenders to verify the exposure details, one of the persons quoted above said. The Adani group companies have seen shares plummeting following a recent research report by a short-seller which followed the cancellation of group's Rs 20000 crore follow on share sale. An email sent to Adani group seeking a response to this story remained unanswered till the press time. A separate email sent to the RBI too seeking official comment didn't elicit any response. According to a report by CLSA, bank debt that include term loans, working capital and other facilities form just 38 percent of … [Read more...] about RBI looking at banks’ exposure to Adani group companies, seeks present status: Sources

The Reserve Bank of India (RBI) on February 3 said it has imposed monetary penalties on Bank of Baroda, North East Small Finance Bank and Krazybee Services Private Limited for rule violation. The central bank imposed a Rs 30 lakh penalty on Bank of Baroda, Rs 42.48 lakh on Krazybee Services Private Ltd and Rs 39.50 lakh on North East Small Finance Bank. The RBI's inspection report on Bank of Baroda showed that the lender breached the transaction limits in small accounts and failed to ensure that the interest rates applied in certain term deposit accounts were as per the schedule of interest rates disclosed in advance, a release said. Krazybee Services failed to ensure that its recovery agents did not resort to harassment or intimidation of customers while collecting debt. While North East Small Finance Bank failed to classify "borrowal accounts" as non-performing assets (NPAs), leading to a significant divergence between the reported and assessed NPAs as on March 31, 2020 … [Read more...] about RBI imposes monetary penalty on Bank of Baroda, 2 others for rule violation

RBI may raise the main interest rate by a modest 25 basis points to 6.50 percent Reserve Bank of India (RBI) Governor Shaktikanta Das will unveil the first monetary policy of 2023 on February 8 after a two-day review amid  concerns of further slowdown in economic growth and tight global financial conditions. The review by the six-member Monetary Policy Committee ( MPC ) led by Das will likely indicate the course the RBI will adopt in 2023 as it seeks to strike a fine balance between sustaining growth while battling against global spillovers. This week's monetary policy is seen as crucial as it will be the RBI's first policy stance for the calendar year 2023 and comes exactly one week after Finance Minister Nirmala Sitharaman unveiled the Union Budget 2023 -24 in the Parliament on February 1. Even though the US Federal Reserve is signalling that disinflation has kicked off and the odds of soft-landing in 2023 have increased, the anticipated slowdown in economic growth … [Read more...] about Moderate rate hike on cards as RBI needs to strike a balance in growth, global woes

RBI Until last week, bond investors were convinced the Reserve Bank of India (RBI) will deliver a modest 35 basis point hike in the repo rate and signal it is done with tightening for now. While the market got what it wanted on the rate front, the Monetary Policy Committee (MPC) seems in no mood to shed its discomfort with inflation although prices seem to be softening somewhat. One basis point is one hundredth of a percentage point. The RBI’s MPC voted for a 35 basis point hike in the repo rate, but kept the stance unchanged, which still remains withdrawal of accommodation. Further, Governor Shaktikanta Das stressed the point that core inflation, which excludes fuel and food prices, is a cause of worry. Core inflation, or the inflation rate after taking out food and fuel, was around 6 percent in October. Read More The focus on core inflation in the MPC’s statement has perhaps not been as intense as this time. “On balance, the MPC was of the view that … [Read more...] about What is the bond market reading from the RBI policy?

Slowing growth and easing price pressures may prompt India’s central bank to slash borrowing costs starting in August of this year, said Nomura Holdings Inc. in a note to clients on Friday. India’s growth is “likely to disappoint at 4.5% in 2023 due to global spillovers, prompting 75 basis point of rate cuts in second half of 2023,” Nomura economists led by Sonal Varma wrote. Also Read: Oct-Dec inflation 50 bps below RBI forecast, but Feb rate hike still likely India’s monetary policy makers are expected to wind down hikes after a 25-basis-point move in February, capping the most aggressive tightening cycle since 2011. The central bank has delivered five straight increases since May to take the benchmark rate to 6.25%, the highest in almost four years to rein-in price gains. Nomura is among the first to forecast such deep rate cuts in 2023, expecting the policy rate to ease to 5.75% by the end of the year in what it refers to as an “out-of-consensus” call. Goldman … [Read more...] about Nomura sees 75 basis point RBI rate cuts in 2023 as GDP slows

IndusInd Bank on January 18 reported 58 percent growth in its consolidated net profit for the quarter ending December 2022 to Rs 1,963.54 crore Trade Watchlist Portfolio Message Set Alert live bse live nse live Volume Todays L/H More × Shares of IndusInd Bank jumped 4 percent on February 3 on reports that the Reserve Bank of India has granted approval to promoter Hinduja Group to increase its stake in the bank. Indusind International Holdings Ltd, the promoter of Indusind Bank, is said to have received a go ahead from the banking regulator to increase its stake in the bank to 26 percent from 15.16 percent, according to a Business Line report. The Hindujas are likely to deploy Rs 8000-10000 crore between June and September to increase their shareholding in the bank . The go-ahead given by the regulator is in line with the newly introduced RBI (Acquisition and Holding … [Read more...] about IndusInd Bank rises on reports of RBI approval to increasing Hinduja Group’s stake

The NFO for Edelweiss CRISIL IBX 50:50 Gilt Plus SDL Short Duration Index Fund opened on January 27. The Reserve Bank of India (RBI) on February 3 set a coupn rate of 7.26 percent for the new 10-year benchmark government bond maturing in 2033, raising Rs 12,000 crore. The coupon set on the new benchmark bond is similar to the coupon set on the previous 10-year benchmark bond. “This could be due to easing yields on the bonds after the budget,” said a dealer with a state-owned bank who spoke on condition of anonymity. Also read: Government bond yield eases post expected market borrowing figures The 10-year benchmark government bond is the pricing benchmark for the sovereign bond yield curve and is usually the most liquid paper in the secondary market for government debt. Read More Government bonds are the pricing reference for a vast variety of credit products in the economy, including corporate debt. Prior to this auction, the RBI has set 12 paise … [Read more...] about RBI sets 7.26% coupon rate for new 10-year benchmark government bond

The Union Budget for 2022-23 (FY23) announced on February 1 is clearly prepared within tough fiscal constraints. The backdrop for the Budget is defined by a steeply elevated public debt hovering near 90 percent for the general government (i.e., central and states together) and a significant shortfall of the order of 55.4 percent in the expected privatisation receipts during FY22. Production Linked Incentive (PLI) Scheme for achieving Aatmanirbhar Bharat has received an excellent response, with the potential to create 60 lakh new jobs and additional production of 30 lakh crore during the next Keycap digit five years. Moreover, additional spending on subsidies over the budgeted estimates — especially food (up 18 percent) and fertiliser (up 76.2 percent) subsidies — has gone up significantly during FY22 on account of elevated commodity prices and shortages. Allocation for MGNREGA scheme too had to be increased by 34.2 percent during FY22 from the budgeted Rs 730 billion to Rs … [Read more...] about Budget 2022 | Government strikes a fine balance between growth and fiscal consolidation

State governments adopting the so-called old pension scheme may end up curbing current expenditure as they build up liabilities for the future, according to Raghuram Rajan, the former governor of the Reserve Bank of India. “I think the reason we moved to the new pension scheme was because in the old pension scheme there were huge liabilities that built up. It is important to remember that defined benefit schemes typically are easier for government to take on because you are not recognizing the liabilities,” Rajan told Moneycontrol in an interview at Davos 2023 . Also Read: Himachal Pradesh govt approves restoration of old pension scheme “And that implies that what you have really built up is a government liability for the future. And if you are prudent, that inhibits your spending today.” Rajan’s comments come in the backdrop of a few state governments in India moving back to the old pension scheme for their employees. Read More Under the old … [Read more...] about Davos 2023: Shift to old pension schemes may inhibit states’ spending, says Raghuram Rajan