The Indian economy is “doing very well” and contributing more to global growth than the US, Reserve Bank Governor Sanjay Malhotra said on Wednesday, days after US President Donald Trump’s remark of India being a dead economy.The country is expected to grow 6.5 per cent, as against the International Monetary Fund’s (IMF’s) estimate of about 3 per cent global growth in 2025, Malhotra told reporters at the central bank headquarters here.“We are contributing about 18 per cent, which is more than the US where the contribution is expected to be much less — about 11 per cent or something. We are doing very well and we will continue to improve further,” Malhotra said, replying to a question on Trump’s recent comments.Malhotra said the aspirational growth rate for India should be more than 6.5 per cent, which the RBI is projecting for FY25, and added that the country has grown at a yearly average of 7.8 per cent in the past.Amid the trade policy negotiations, Trump had called India as a “dead economy” while expressing disappointment with New Delhi’s posturing to continue buying cheap oil from Russia.“I don’t care what India does with Russia. They can take their dead economies down together,” Trump had reportedly said.This statement and the ones following that were as sharp a critique, while having the potential to destabilise the India-US relationship, have also led to concerns over exact tariffs and penalties for buying Russian oil that await India from the Trump administration.Malhotra said the RBI does not expect any impact on inflation because of the tariff-related aspects, while Deputy Governor Poonam Gupta elaborated that there will not be any first order impact of the geopolitical issues on the domestic inflation.Even in the event of India being forced to shift away from Russian oil because of US concerns, there will not be any impact on domestic inflation, Malhotra said.He said this fiscal year, authorities will step in to ensure that the purchase prices of petroleum prices do not pinch the common man, hinting of a possible cut in duties if the oil becomes dearer.

The RBI governor said the aspirational growth rate for India should be more than 6.5 per cent, which the RBI is projecting for FY25, and added that the country has grown at a yearly average of 7.8 per cent in the past.

The Indian economy is “doing very well” and contributing more to global growth than the US, Reserve Bank Governor Sanjay Malhotra said on Wednesday, days after US President Donald Trump’s remark of India being a dead economy. The country is expected to grow 6.5 per cent, as against the International Monetary Fund’s (IMF’s) estimate of about 3 per cent global growth in 2025, Malhotra told reporters at the central bank headquarters here. “We are contributing about 18 per cent, which is more than the US where the contribution is expected to be much less — about 11 per cent or something. We are doing very well and we will continue to improve further,” Malhotra said, replying to a question on Trump’s recent comments. Malhotra said the aspirational growth rate for India should be more than 6.5 per cent, which the RBI is projecting for FY25, and added that the country has grown at a yearly average of 7.8 per cent in the past. Amid the trade policy negotiations, Trump had called India as a “dead economy” while expressing disappointment with New Delhi’s posturing to continue buying cheap oil from Russia. “I don’t care what India does with Russia. They can take their dead economies down together,” Trump had reportedly said. This statement and the ones following that were as sharp a critique, while having the potential to destabilise the India-US relationship, have also led to concerns over exact tariffs and penalties for buying Russian oil that await India from the Trump administration. Malhotra said the RBI does not expect any impact on inflation because of the tariff-related aspects, while Deputy Governor Poonam Gupta elaborated that there will not be any first order impact of the geopolitical issues on the domestic inflation. Even in the event of India being forced to shift away from Russian oil because of US concerns, there will not be any impact on domestic inflation, Malhotra said. He said this fiscal year, authorities will step in to ensure that the purchase prices of petroleum prices do not pinch the common man, hinting of a possible cut in duties if the oil becomes dearer.

The RBI governor said the aspirational growth rate for India should be more than 6.5 per cent, which the RBI is projecting for FY25, and added that the country has grown at a yearly average of 7.8 per cent in the past.

RBI governor reacts to Trump's 'dead economy' remark - Here's how he defended India

In a bold move to revive growth and ease financing conditions, the Reserve Bank of India (RBI), during its Monetary Policy Committee (MPC) meeting on June 6, 2025, announced a series of pro-growth measures.&nbsp;&nbsp;These include another repo rate cut, a phased CRR reduction, and a downward revision in the inflation forecast. The policy signals a continued effort by the central bank to support the economy amid a favourable inflation outlook and improving macroeconomic conditions. &nbsp;Here are the key announcements explained in detail:<h2>1. Repo rate cut by 50 basis points to 5.5%&nbsp;</h2>The RBI slashed the repo rate by 50 basis points, bringing it down to 5.5 per cent. This marks the third consecutive repo rate cut in 2025, following a 25-basis point cut in February, and another 25-basis point reduction in April.&nbsp; &nbsp;The cumulative rate cut now stands at 100 basis points for the calendar year.&nbsp;The repo rate is the rate at which the RBI lends to commercial banks. Lowering this rate makes loans cheaper, potentially boosting credit demand from consumers and corporates. With this aggressive rate action, the RBI aims to energise investment and spending across key sectors of the economy.<h2>2. CRR to be reduced by 100 basis points in four stages</h2>In a major liquidity-boosting measure, the RBI also announced a 100-basis point cut in the Cash Reserve Ratio (CRR) — from 4 per cent to 3 per cent. The CRR is the minimum percentage of a bank’s total deposits that must be held in reserve with the central bank. &nbsp;This reduction will be implemented in four tranches — on September 6, October 4, November 1, and November 29.&nbsp; &nbsp;According to the RBI, this move will inject nearly ₹2.5 lakh crore into the banking system, enhancing liquidity and supporting stronger credit growth.&nbsp;<h2>3. Inflation forecast for FY26 lowered to 3.7%</h2>The RBI revised down its inflation forecast for FY26 to 3.7 per cent, from its earlier estimate of 4 per cent. This signals that the central bank sees price pressures easing in the coming months.&nbsp;According to Governor Malhotra, factors such as record wheat production, higher output of pulses, and a moderation in global commodity prices are expected to help keep inflation in check. However, he cautioned that the RBI remains watchful of weather-related risks that could affect food prices.&nbsp;Here’s the revised quarterly CPI outlook:• Q1: 2.9 per cent• Q2: 3.4 per cent• Q3: 3.9 per cent• Q4: 4.4 per cent<h2>4. GDP growth forecast retained at 6.5% for FY26</h2>Despite the rate cuts and liquidity measures, the RBI chose to keep its GDP growth projection unchanged at 6.5 per cent for FY26, reflecting confidence in the resilience of the Indian economy.&nbsp;Growth is expected to be driven by reviving investment activity, steady rural demand, and above-normal monsoon forecasts. However, the central bank also highlighted downside risks from global trade tensions, weather uncertainties, and slower foreign inflows.Here are quarter-wise GDP estimates:• Q1: 6.5 per cent• Q2: 6.7 per cent• Q3: 6.6 per cent• Q4: 6.3 per cent<h2>5. Policy stance shifts from ‘accommodative’ to ‘neutral’</h2>In a notable shift, the MPC voted to change its policy stance from ‘accommodative’ to ‘neutral’, marking the end of an ultra-easy monetary phase. This means the central bank will now make future rate decisions based on evolving data, rather than being biased toward further cuts.&nbsp;While the RBI remains supportive of growth, it has also signalled readiness to respond quickly to any resurgence in inflation or external shocks.<h2>6. Sector-specific insights: lending stress eases, forex reserves strong</h2>Governor Malhotra noted that stress in unsecured loans and credit card segments has eased, although microfinance loans remain under pressure. On the external front, India’s merchandise and services exports are holding up well despite global headwinds.&nbsp; &nbsp;The current account deficit (CAD) for FY26 is projected to remain within sustainable levels, supported by resilient remittance inflows and a strong forex reserve position of $691.5 billion as of May-end.&nbsp;The June 2025 policy signals a strong push to accelerate India’s growth cycle, supported by lower rates and higher liquidity.&nbsp;&nbsp;At the same time, the RBI has shown prudence by adopting a neutral stance, reflecting its intent to remain flexible in a fluid global environment. &nbsp;

RBI unveils pro-growth measures including a repo rate cut and CRR reduction during its June 2025 MPC meet, aiming to support economic recovery.


In a bold move to revive growth and ease financing conditions, the Reserve Bank of India (RBI), during its Monetary Policy Committee (MPC) meeting on June 6, 2025, announced a series of pro-growth measures. These include another repo rate cut, a phased CRR reduction, and a downward revision in the inflation forecast. The policy signals a continued effort by the central bank to support the economy amid a favourable inflation outlook and improving macroeconomic conditions. Here are the key announcements explained in detail: 1. Repo rate cut by 50 basis points to 5.5% The RBI slashed the repo rate by 50 basis points, bringing it down to 5.5 per cent. This marks the third consecutive repo rate cut in 2025, following a 25-basis point cut in February, and another 25-basis point reduction in April. The cumulative rate cut now stands at 100 basis points for the calendar year. The repo rate is the rate at which the RBI lends to commercial banks. Lowering this rate makes loans cheaper, potentially boosting credit demand from consumers and corporates. With this aggressive rate action, the RBI aims to energise investment and spending across key sectors of the economy. 2. CRR to be reduced by 100 basis points in four stages In a major liquidity-boosting measure, the RBI also announced a 100-basis point cut in the Cash Reserve Ratio (CRR) — from 4 per cent to 3 per cent. The CRR is the minimum percentage of a bank’s total deposits that must be held in reserve with the central bank. This reduction will be implemented in four tranches — on September 6, October 4, November 1, and November 29. According to the RBI, this move will inject nearly ₹2.5 lakh crore into the banking system, enhancing liquidity and supporting stronger credit growth. 3. Inflation forecast for FY26 lowered to 3.7% The RBI revised down its inflation forecast for FY26 to 3.7 per cent, from its earlier estimate of 4 per cent. This signals that the central bank sees price pressures easing in the coming months. According to Governor Malhotra, factors such as record wheat production, higher output of pulses, and a moderation in global commodity prices are expected to help keep inflation in check. However, he cautioned that the RBI remains watchful of weather-related risks that could affect food prices. Here’s the revised quarterly CPI outlook: • Q1: 2.9 per cent • Q2: 3.4 per cent • Q3: 3.9 per cent • Q4: 4.4 per cent 4. GDP growth forecast retained at 6.5% for FY26 Despite the rate cuts and liquidity measures, the RBI chose to keep its GDP growth projection unchanged at 6.5 per cent for FY26, reflecting confidence in the resilience of the Indian economy. Growth is expected to be driven by reviving investment activity, steady rural demand, and above-normal monsoon forecasts. However, the central bank also highlighted downside risks from global trade tensions, weather uncertainties, and slower foreign inflows. Here are quarter-wise GDP estimates: • Q1: 6.5 per cent • Q2: 6.7 per cent • Q3: 6.6 per cent • Q4: 6.3 per cent 5. Policy stance shifts from ‘accommodative’ to ‘neutral’ In a notable shift, the MPC voted to change its policy stance from ‘accommodative’ to ‘neutral’, marking the end of an ultra-easy monetary phase. This means the central bank will now make future rate decisions based on evolving data, rather than being biased toward further cuts. While the RBI remains supportive of growth, it has also signalled readiness to respond quickly to any resurgence in inflation or external shocks. 6. Sector-specific insights: lending stress eases, forex reserves strong Governor Malhotra noted that stress in unsecured loans and credit card segments has eased, although microfinance loans remain under pressure. On the external front, India’s merchandise and services exports are holding up well despite global headwinds. The current account deficit (CAD) for FY26 is projected to remain within sustainable levels, supported by resilient remittance inflows and a strong forex reserve position of $691.5 billion as of May-end. The June 2025 policy signals a strong push to accelerate India’s growth cycle, supported by lower rates and higher liquidity. At the same time, the RBI has shown prudence by adopting a neutral stance, reflecting its intent to remain flexible in a fluid global environment.

RBI announces a repo rate cut, CRR reduction, and lower inflation forecast to boost growth and liquidity.

RBI MPC meeting: Here are the key highlights from the central bank’s June 2025 policy review

Shaktikanta Das, governor of India's central bank, is under increasing pressure due to one of the country's biggest GDP growth misses in recent memory. 
He has not received an extension despite his tenure ending next week.

After data showed that the Indian economy grew by 5.4 per cent from July to September, a seven-quarter low far lower than the Reserve Bank of India's 7 per cent forecast, economists have begun to speculate about Das's future. 
 
There has been a lot of speculation that Das may stay on as governor for another six years however, the government has been mum on the matter despite mounting demands for an interest rate cut. 
 
Following nearly two years of steady growth, the majority of 43 experts in a Bloomberg survey anticipate that the central bank will keep its benchmark rate at 6.5 per cent on Friday. 
 
October's inflation rate of 6.21 per cent in India hit a 14-month high, driven mostly by skyrocketing food costs. 
 
This rate is higher than the government-mandated objective of 4 per cent inflation, plus or minus two percentage points.

Radhika Piplani, an economist with Dam Capital Advisors, said the slowdown should be a "wake-up call for the RBI. The next rate decision is live for a policy action and will be keenly watched for reasons behind the GDP miss." 
 
she added, "If the central bank doesn't ease now, it could be forced to compensate with a larger-than-expected cut in February."

The slowdown in growth has heightened the debate of whether the central bank is providing sufficient stimulus to the world's fastest-growing major economy. Especially as core inflation, which does not include energy and food price fluctuations, is low. 
 
Both Nirmala Sitharaman, the minister of finance, and Piyush Goyal, the minister of commerce, have recently demanded lower interest rates. But Das ruled out rate cuts last month and had said lowering rates would be dangerous.

(With inputs from the agencies)

Shaktikanta Das, governor of India's central bank, is under increasing pressure due to one of the country's biggest GDP growth misses in recent memory. He has not received an extension despite his tenure ending next week.

Shaktikanta Das, governor of India's central bank, is under increasing pressure due to one of the country's biggest GDP growth misses in recent memory. He has not received an extension despite his tenure ending next week. After data showed that the Indian economy grew by 5.4 per cent from July to September, a seven-quarter low far lower than the Reserve Bank of India's 7 per cent forecast, economists have begun to speculate about Das's future. There has been a lot of speculation that Das may stay on as governor for another six years however, the government has been mum on the matter despite mounting demands for an interest rate cut. Following nearly two years of steady growth, the majority of 43 experts in a Bloomberg survey anticipate that the central bank will keep its benchmark rate at 6.5 per cent on Friday. October's inflation rate of 6.21 per cent in India hit a 14-month high, driven mostly by skyrocketing food costs. This rate is higher than the government-mandated objective of 4 per cent inflation, plus or minus two percentage points. Radhika Piplani, an economist with Dam Capital Advisors, said the slowdown should be a "wake-up call for the RBI. The next rate decision is live for a policy action and will be keenly watched for reasons behind the GDP miss." she added, "If the central bank doesn't ease now, it could be forced to compensate with a larger-than-expected cut in February." The slowdown in growth has heightened the debate of whether the central bank is providing sufficient stimulus to the world's fastest-growing major economy. Especially as core inflation, which does not include energy and food price fluctuations, is low. Both Nirmala Sitharaman, the minister of finance, and Piyush Goyal, the minister of commerce, have recently demanded lower interest rates. But Das ruled out rate cuts last month and had said lowering rates would be dangerous. (With inputs from the agencies)

Indian central bank governor Shaktikanta Das's future under scanner after GDP miss

Reserve Bank of India (RBI) Governor Shaktikanta Das offered a cautiously optimistic view of the Indian economy amidst mixed signals surrounding festival season demand. He emphasised that the positives currently outweigh the negatives, highlighting that the economy is on a stable growth path as detailed in a report by CNBC TV18.

In a recent interview with CNBC TV18 in Washington DC, Das acknowledged some slowdown in specific sectors but asserted that the agricultural sector is thriving this year, largely due to favorable monsoon conditions. He expressed confidence in the upcoming rabi crop and noted a revival in rural demand, signalling a positive shift for the economy.

Das pointed out that several key economic indicators are showing strong growth, further supporting the notion that the economy is performing well. However, he also stressed the importance of being aware of external risks, including geopolitical tensions, geo-economic fragmentation, and severe weather events that could affect external demand. He stated, “By and large, India’s economic growth has always been sustained by domestic demand and investment, both of which remain robust.”

Growth projections of RBI<o:p></o:p>

Looking ahead, the RBI projects India’s economy to grow by 7.2 per cent in FY25, with quarterly growth rates anticipated at 7 per cent for Q2, 7.4 per cent for Q3, and 7.4 per cent for Q4. Das noted a favourable balance between growth and inflation, which allowed the RBI to adopt a neutral policy stance in its recent monetary meeting. This flexibility will enable the RBI to closely monitor incoming data and adjust its policies as needed.

Das highlighted that inflation appears to be moderating, with further reductions expected as the year progresses. However, he cautioned that risks to the inflation outlook remain, stressing the need for careful consideration before making any premature policy changes.

Regarding interest rates, Das indicated that any potential cuts would hinge on forthcoming data and inflation trends. He mentioned that household inflation expectations have been gradually decreasing over the past two years, indicating a shift in sentiment.

Views on the Banking sector<o:p></o:p>

On banking sector stability, Das dismissed concerns of systemic risks, noting that both the banking and non-banking finance sectors remain robust. However, he acknowledged issues in the microfinance sector, where the RBI has found that some non-banking financial companies (NBFCs) were charging excessively high interest rates, prompting regulatory action.

The RBI has recently barred four NBFCs from issuing loans due to exorbitant practices, underlining its commitment to consumer protection.

Finally, Das mentioned ongoing discussions about the liquidity coverage ratio (LCR) guidelines in light of the growing prevalence of digital banking. He indicated that the RBI is considering tightening LCR norms to mitigate risks associated with rapid withdrawals, reflecting the evolving landscape of banking in the digital age. Feedback from the banking sector will be taken into account as these measures are developed.

Reserve Bank of India (RBI) Governor Shaktikanta Das offered a cautiously optimistic view of the Indian economy amidst mixed signals surrounding festival season demand.

Reserve Bank of India (RBI) Governor Shaktikanta Das offered a cautiously optimistic view of the Indian economy amidst mixed signals surrounding festival season demand. He emphasised that the positives currently outweigh the negatives, highlighting that the economy is on a stable growth path as detailed in a report by CNBC TV18. In a recent interview with CNBC TV18 in Washington DC, Das acknowledged some slowdown in specific sectors but asserted that the agricultural sector is thriving this year, largely due to favorable monsoon conditions. He expressed confidence in the upcoming rabi crop and noted a revival in rural demand, signalling a positive shift for the economy. Das pointed out that several key economic indicators are showing strong growth, further supporting the notion that the economy is performing well. However, he also stressed the importance of being aware of external risks, including geopolitical tensions, geo-economic fragmentation, and severe weather events that could affect external demand. He stated, “By and large, India’s economic growth has always been sustained by domestic demand and investment, both of which remain robust.” Growth projections of RBI Looking ahead, the RBI projects India’s economy to grow by 7.2 per cent in FY25, with quarterly growth rates anticipated at 7 per cent for Q2, 7.4 per cent for Q3, and 7.4 per cent for Q4. Das noted a favourable balance between growth and inflation, which allowed the RBI to adopt a neutral policy stance in its recent monetary meeting. This flexibility will enable the RBI to closely monitor incoming data and adjust its policies as needed. Das highlighted that inflation appears to be moderating, with further reductions expected as the year progresses. However, he cautioned that risks to the inflation outlook remain, stressing the need for careful consideration before making any premature policy changes. Regarding interest rates, Das indicated that any potential cuts would hinge on forthcoming data and inflation trends. He mentioned that household inflation expectations have been gradually decreasing over the past two years, indicating a shift in sentiment. Views on the Banking sector On banking sector stability, Das dismissed concerns of systemic risks, noting that both the banking and non-banking finance sectors remain robust. However, he acknowledged issues in the microfinance sector, where the RBI has found that some non-banking financial companies (NBFCs) were charging excessively high interest rates, prompting regulatory action. The RBI has recently barred four NBFCs from issuing loans due to exorbitant practices, underlining its commitment to consumer protection. Finally, Das mentioned ongoing discussions about the liquidity coverage ratio (LCR) guidelines in light of the growing prevalence of digital banking. He indicated that the RBI is considering tightening LCR norms to mitigate risks associated with rapid withdrawals, reflecting the evolving landscape of banking in the digital age. Feedback from the banking sector will be taken into account as these measures are developed.

Optimism Prevails: RBI Governor Shaktikanta Das on India's economic outlook

RBI Governor Shaktikanta Das on Thursday announced MPC's accommodative stance, leaving repo rate, reverse repo rate, bank rate and MSF rate unchanged. The policy rate held its stance for the tenth consecutive time and was last revised on May 22, 2020 by the RBI.

RBI Guv announces unchanged rates, projects GDP growth at 7.8%

The Indian government said Shaktikanta Das has been re-appointed as the governor of the Reserve Bank of India (RBI) for another three years or until further orders.

The decision was approved by the cabinet`s appointments committee late on Thursday.

Das first took the helm in December 2018 and before that was the department of economic affairs secretary at the finance ministry.

To shore up the economy against the impact of the COVID-19 pandemic, the central bank has cut key interest rates to record lows and infused massive rupee liquidity into the banking system.

With markets now gearing up for the reversal of the ultra-loose monetary policy, stability at the RBI in terms of the top leadership is seen as crucial.

The central bank has taken a more consultative approach with markets under Das who has been keen to have more transparency and direct communication.

The Indian government said Shaktikanta Das has been re-appointed as the governor of the Reserve Bank of India (RBI) for another three years or until further orders.

The Indian government said Shaktikanta Das has been re-appointed as the governor of the Reserve Bank of India (RBI) for another three years or until further orders. The decision was approved by the cabinet`s appointments committee late on Thursday. Das first took the helm in December 2018 and before that was the department of economic affairs secretary at the finance ministry. To shore up the economy against the impact of the COVID-19 pandemic, the central bank has cut key interest rates to record lows and infused massive rupee liquidity into the banking system. With markets now gearing up for the reversal of the ultra-loose monetary policy, stability at the RBI in terms of the top leadership is seen as crucial. The central bank has taken a more consultative approach with markets under Das who has been keen to have more transparency and direct communication.

India re-appoints Das as RBI governor for another three years

The restructuring option will be open to borrowers who hadn’t availed in 2020. Borrowers can now opt for it if the amount is less than Rs 25 crore.

RBI Governor announces loans restructuring facility for small borrowers

Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday said there is a need for coordinated action between the centre and state governments to reduce taxes on petrol and diesel prices.

"There is a need for coordinated action between the centre and the states because there are inherent taxes levied by both,"&nbsp;the governor said, adding that calibrated reduction of taxes is important.

Watch |&nbsp;

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/gravitas-2-factors-are-dictating-how-much-you-spend-on-fuel-365528/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

He, however, said both the centre and the state governments have their revenue pressures and they are required to spend high sums of money to enable the country and the people to come out of the COVID-19 pandemic stress.

"So the revenue requirement and the compulsion of the governments are fully understood. But having said that the impact on inflation also is something, which comes in from the fact that petrol and diesel prices do have an impact on the cost of manufacturing, production,"&nbsp;the Governor said at an event organised by Bombay Chamber of Commerce.

On the central bank's digital currency, Das said a lot of work is going on internally in the RBI and some broad guidelines and approach papers will be released on it soon.

The governor said RBI has certain concerns on cryptocurrencies and it has already been communicated to the government.

He said RBI is looking into strengthening the regulatory architecture for asset reconstruction companies (ARCs).

"(We are) refining and further upgrading the regulatory architecture in respect of the ARCs to ensure that they have a skin in the game, and they are very much in business is receiving a lot of attention from us,"&nbsp;Das said.

On setting up of ARC for non-performing asset (NPA) management, as announced in the Budget 2021, he said, "(in) no way will it jeopardise the activity of the existing ARCs."

The governor said there is growing realisation and awareness among banks to dealing with bad assets and they are proactively making provision in their books for stressed assets.

He said RBI has sharpened and deepened its supervisory methods and is doing deep dive into areas of banking which were not done earlier.&nbsp;

"We have a precise idea of build-up of stressed assets in banks and as soon as we see a sign of stress, we immediately enter into a discussion with the banks and proactively deal with the problems,"&nbsp;he said.

Das also asked public and private sector banks to improve their credit appraisal processes and take measures to stop ever-greening of loans.

He emphasised that the country's financial sector currently is in a far much better place than it was earlier.&nbsp; 
&nbsp;

Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday said there is a need for coordinated action between the centre and state governments to reduce taxes on petrol and diesel prices.

Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday said there is a need for coordinated action between the centre and state governments to reduce taxes on petrol and diesel prices. "There is a need for coordinated action between the centre and the states because there are inherent taxes levied by both," the governor said, adding that calibrated reduction of taxes is important. Watch | He, however, said both the centre and the state governments have their revenue pressures and they are required to spend high sums of money to enable the country and the people to come out of the COVID-19 pandemic stress. "So the revenue requirement and the compulsion of the governments are fully understood. But having said that the impact on inflation also is something, which comes in from the fact that petrol and diesel prices do have an impact on the cost of manufacturing, production," the Governor said at an event organised by Bombay Chamber of Commerce. On the central bank's digital currency, Das said a lot of work is going on internally in the RBI and some broad guidelines and approach papers will be released on it soon. The governor said RBI has certain concerns on cryptocurrencies and it has already been communicated to the government. He said RBI is looking into strengthening the regulatory architecture for asset reconstruction companies (ARCs). "(We are) refining and further upgrading the regulatory architecture in respect of the ARCs to ensure that they have a skin in the game, and they are very much in business is receiving a lot of attention from us," Das said. On setting up of ARC for non-performing asset (NPA) management, as announced in the Budget 2021, he said, "(in) no way will it jeopardise the activity of the existing ARCs." The governor said there is growing realisation and awareness among banks to dealing with bad assets and they are proactively making provision in their books for stressed assets. He said RBI has sharpened and deepened its supervisory methods and is doing deep dive into areas of banking which were not done earlier. "We have a precise idea of build-up of stressed assets in banks and as soon as we see a sign of stress, we immediately enter into a discussion with the banks and proactively deal with the problems," he said. Das also asked public and private sector banks to improve their credit appraisal processes and take measures to stop ever-greening of loans. He emphasised that the country's financial sector currently is in a far much better place than it was earlier.

Need coordinated action between centre, states on tax reduction in fuel prices: RBI governor 

Reserve Bank of India Governor Shaktikanta Das said on Sunday he had tested positive for the coronavirus, the latest high profile name in the country to contract the virus.

"I have tested Covid-19 positive. Asymptomatic. Feeling very much alright," Das said in a tweet.

"Will continue to work from isolation. Work in the RBI (Reserve Bank of India) will go on normally," he said.

Over 7.8 million Indians have tested positive for COVID-19 so far. The pandemic has claimed 118,534 lives in the world's second most populous country.

Several Indian politicians including Home Minister Amit Shah and actors such as Amitabh Bachchan have tested positive for the virus, and since recovered.

&nbsp;

Reserve Bank of India Governor Shaktikanta Das said on Sunday he had tested positive for the coronavirus, the latest high profile name in the country to contract the virus.

Reserve Bank of India Governor Shaktikanta Das said on Sunday he had tested positive for the coronavirus, the latest high profile name in the country to contract the virus. "I have tested Covid-19 positive. Asymptomatic. Feeling very much alright," Das said in a tweet. "Will continue to work from isolation. Work in the RBI (Reserve Bank of India) will go on normally," he said. Over 7.8 million Indians have tested positive for COVID-19 so far. The pandemic has claimed 118,534 lives in the world's second most populous country. Several Indian politicians including Home Minister Amit Shah and actors such as Amitabh Bachchan have tested positive for the virus, and since recovered.

RBI Governor Shaktikanta Das tests positive for coronavirus

Reserve Bank of India (RBI) Governor Shaktikanta Das on Saturday said the country's economy has started showing signs of normalcy with easing of more than two months of coronavirus-induced lockdown restrictions. The medium-term outlook for the Indian economy, however, remains uncertain with supply chains and demand yet to be fully restored while the trajectory of the coronavirus spread and the length of its impact remain unknown, he added.

The RBI chief also said the coronavirus pandemic has so far been the "biggest test of robustness and resilience of India's economic and financial system".

"Coronavirus pandemic perhaps represents so far the biggest test of robustness and resilience of our economic and financial system," Shaktikanta Das said, in his keynote address at the 7th SBI Banking and Economics Conclave.

According to most estimates, the Indian economy will register a record contraction of over 4.5% in the current fiscal year that started on April 1 due to the pandemic.

Starting late March, the country was placed under one of the strictest lockdowns in the world for over two months. Since early June, the government has started easing restrictions to help some revival in the economy even though the number of infections in the country continues to rise.

"The Indian economy has started showing signs of getting back to normalcy in response to the staggered easing of restrictions. It is, however, still uncertain when supply chains will be restored fully -- how long it will take for demand conditions to normalise and what kind of durable effects the pandemic will leave behind on our potential growth," he said.

Das said that the 2008 global crisis and the current crisis show that such economic shocks have "fatter tails" than generally believed, and that the country's financial system should have larger capital buffers.

A recapitalisation plan for Indian banks is necessary as the economic impact of the pandemic may result in higher bad loans and erosion of capital for banks, the RBI governor added.

The central bank has cut policy rates by 115 basis points in response to the pandemic, resulting in a total policy rate reduction of 250 basis points since February 2019, along with providing liquidity of Rs 9.57 trillion ($127.28 billion).

It has also eased some bad loan provisioning norms and allowed loan moratoriums for retail customers.

Das said that the central bank has to carefully unwind the unusual monetary and regulatory measures taken to cushion the economic shocks in the post pandemic world, as the financial sector should return to normal functioning without relying on the regulatory relaxations as the new norm.

The RBI chief also said inflation would continue to moderate going forward and investment activity will revive.

India recorded 27,114 coronavirus cases in the last 24 hours, taking the total to 8,20,915 including 22,123 dead.

Reserve Bank of India (RBI) Governor Shaktikanta Das on Saturday said the country's economy has started showing signs of normalcy with easing of more than two months of coronavirus-induced lockdown restrictions.

Reserve Bank of India (RBI) Governor Shaktikanta Das on Saturday said the country's economy has started showing signs of normalcy with easing of more than two months of coronavirus-induced lockdown restrictions. The medium-term outlook for the Indian economy, however, remains uncertain with supply chains and demand yet to be fully restored while the trajectory of the coronavirus spread and the length of its impact remain unknown, he added. The RBI chief also said the coronavirus pandemic has so far been the "biggest test of robustness and resilience of India's economic and financial system". "Coronavirus pandemic perhaps represents so far the biggest test of robustness and resilience of our economic and financial system," Shaktikanta Das said, in his keynote address at the 7th SBI Banking and Economics Conclave. According to most estimates, the Indian economy will register a record contraction of over 4.5% in the current fiscal year that started on April 1 due to the pandemic. Starting late March, the country was placed under one of the strictest lockdowns in the world for over two months. Since early June, the government has started easing restrictions to help some revival in the economy even though the number of infections in the country continues to rise. "The Indian economy has started showing signs of getting back to normalcy in response to the staggered easing of restrictions. It is, however, still uncertain when supply chains will be restored fully -- how long it will take for demand conditions to normalise and what kind of durable effects the pandemic will leave behind on our potential growth," he said. Das said that the 2008 global crisis and the current crisis show that such economic shocks have "fatter tails" than generally believed, and that the country's financial system should have larger capital buffers. A recapitalisation plan for Indian banks is necessary as the economic impact of the pandemic may result in higher bad loans and erosion of capital for banks, the RBI governor added. The central bank has cut policy rates by 115 basis points in response to the pandemic, resulting in a total policy rate reduction of 250 basis points since February 2019, along with providing liquidity of Rs 9.57 trillion ($127.28 billion). It has also eased some bad loan provisioning norms and allowed loan moratoriums for retail customers. Das said that the central bank has to carefully unwind the unusual monetary and regulatory measures taken to cushion the economic shocks in the post pandemic world, as the financial sector should return to normal functioning without relying on the regulatory relaxations as the new norm. The RBI chief also said inflation would continue to moderate going forward and investment activity will revive. India recorded 27,114 coronavirus cases in the last 24 hours, taking the total to 8,20,915 including 22,123 dead.

Signs of normalcy in India's economy but medium-term outlook uncertain: RBI chief

Reserve Bank of India Governor Shaktikanta Das today cut reverse repo rate by 25 basis points to 3.75%, while keeping repo rate unchanged

RBI Governor Shaktikanta Das cuts reverse repo rate 25 bps

'India's GDP to grow at 7.4% in 2021-22' says RBI Governor

RBI governor Shaktikanata Das address amid Covid-19 outbreak. Rbi lowered the key repo rate by 75 basis points (bps) to 4.4 per cent, to help the economic slowdown in the wake of the coronavirus outbreak. The reverse repo rate now stands at 4 per cent, down 90 bps.

RBI briefing amid coronavirus outbreak | Slashes Repo rate by 75 bps

A day after Finance Minister Nirmala Sitharman announced a Rs 1.7 lakh crore relief package for the poor of the country, Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said that Indian banking sector is safe and deposit of bank customers is safe. 
 
<a href="https://www.wionews.com/india-news/centre-announces-coronavirus-stimulus-package-promises-cash-transfer-food-provision-288637">Also read: Centre announces coronavirus stimulus package; promises cash transfer, food provision</a> 
 
"Public should not worry about their deposit in private sector banks, they should not resort to panic withdrawal," said RBI governor.

Here are the top highlights of RBI Governor Shaktikanta Das's press conference

<ul>
	<li>RBI cuts repo rate by 75 bps to 4.4% from 5.15%. It cuts reverse repo rates by 90 basis points.</li>
	<li>Cash Reserve Ratio (CRR) cut by 1% to 3%.&nbsp;</li>
	<li>Minimum daily CRR maintenance will be 80%</li>
	<li>All Banks, HFCs, NBFCs allowed 3 months moratorium for EMI</li>
</ul>

On Thursday, Union Finance Minister Nirmala Sitharaman announced a Rs 1.7 lakh crore relief package under Garib Kalyan Yojana — in the wake of the lockdown imposed due to the spurt in coronavirus cases in the country. The tally now stands at&nbsp;735 — with 17 deaths.

Prime Minister Narendra Modi on Tuesday announced a 21-day lockdown to stem the growth of coronavirus in the country.

Meanwhile, Moody's Investors Service on Friday slashed its estimate of India's GDP growth during the 2020 calendar year to 2.5 per cent from an earlier estimate of 5.3 per cent, on account of the rising economic cost of the coronavirus pandemic.

This compares to 5 per cent growth in 2019.

Moody's said, at the 2020 estimated growth rate, a sharp fall in incomes in India is likely, further weighing on domestic demand and the pace of recovery in 2021.

(With inputs from agencies)

A day after Finance Minister Nirmala Sitharman announced a Rs 1.7 lakh crore relief package for the poor of the country, Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said that Indian banking sector is safe and deposit of bank customers is safe.

A day after Finance Minister Nirmala Sitharman announced a Rs 1.7 lakh crore relief package for the poor of the country, Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said that Indian banking sector is safe and deposit of bank customers is safe. Also read: Centre announces coronavirus stimulus package; promises cash transfer, food provision "Public should not worry about their deposit in private sector banks, they should not resort to panic withdrawal," said RBI governor. Here are the top highlights of RBI Governor Shaktikanta Das's press conference RBI cuts repo rate by 75 bps to 4.4% from 5.15%. It cuts reverse repo rates by 90 basis points. Cash Reserve Ratio (CRR) cut by 1% to 3%. Minimum daily CRR maintenance will be 80% All Banks, HFCs, NBFCs allowed 3 months moratorium for EMI On Thursday, Union Finance Minister Nirmala Sitharaman announced a Rs 1.7 lakh crore relief package under Garib Kalyan Yojana — in the wake of the lockdown imposed due to the spurt in coronavirus cases in the country. The tally now stands at 735 — with 17 deaths. Prime Minister Narendra Modi on Tuesday announced a 21-day lockdown to stem the growth of coronavirus in the country. Meanwhile, Moody's Investors Service on Friday slashed its estimate of India's GDP growth during the 2020 calendar year to 2.5 per cent from an earlier estimate of 5.3 per cent, on account of the rising economic cost of the coronavirus pandemic. This compares to 5 per cent growth in 2019. Moody's said, at the 2020 estimated growth rate, a sharp fall in incomes in India is likely, further weighing on domestic demand and the pace of recovery in 2021. (With inputs from agencies)

No need to panic, Indian banks are safe and stable, says RBI Governor Shaktikanta Das

Reserve Bank of India announced major rate cuts. RBI cut benchmark interest rate by 75 basis points to deal with the hardship caused by COVID-19 outbreak.

Fineprint: Reserve Bank of India's key announcements

Ex Finance secretary Ashok Jha appreciates Rbi' take on coronavirus outbreak. Wion has a conversation with Ashok Jha regarding the impact of coronavirus in global economy. Watch this conversation

Ex finance secy appreciate RBI's take on Coronavirus pandemic

Rbi holds a press conference on Yes Bank crisis. Rbi Governor Shaktikanta Das says, Depositors money is safe, Customers need not to worry.

Yes Bank Crisis: Rbi says, Depositor's money is safe

RBI Governor Shaktikanta Das said that RBI&nbsp;will have internal discussions in case there are any issues arising out of the <a href="https://www.wionews.com/business-economy/dot-asks-telcos-to-clear-dues-by-midnight-withdraws-no-coercive-action-against-defaulting-telcos-280710">Supreme Court</a>'s order regarding <a href="https://www.wionews.com/business-economy/dot-asks-telcos-to-clear-dues-by-midnight-withdraws-no-coercive-action-against-defaulting-telcos-280710">Adjusted Gross Revenue</a> (AGR) dues.

In a judgement on Friday, the apex court&nbsp;had threatened contempt proceedings against <a href="https://www.wionews.com/business-economy/dot-asks-telcos-to-clear-dues-by-midnight-withdraws-no-coercive-action-against-defaulting-telcos-280710">Bharti Airtel</a>, <a href="https://www.wionews.com/business-economy/dot-asks-telcos-to-clear-dues-by-midnight-withdraws-no-coercive-action-against-defaulting-telcos-280710">Vodafone Idea </a>and other telecom firms for failing to comply with its order to pay an estimated Rs 1.47 lakh crore in past dues.

Also read:&nbsp;<a href="https://www.wionews.com/business-economy/dot-asks-telcos-to-clear-dues-by-midnight-withdraws-no-coercive-action-against-defaulting-telcos-280710">DoT asks telcos to clear dues by midnight, withdraws 'no coercive action against defaulters'&nbsp;</a>

Das did not offer any specific comments about the order, which might have ramifications on banks in terms of their exposure to the financially-stressed telecom companies.

When asked about the order, Das said it would be internally deliberated upon, if at all there are issues arising out of it.

On Friday, <a href="https://www.wionews.com/business-economy/state-bank-of-india-gets-sealed-bid-for-jet-airways-from-etihad-217565">State Bank of India</a> (SBI) Chairman Rajnish Kumar said it was incumbent on telecom companies to find money and that it would be safe to presume that they would have made some arrangements for it by now.

Also read:&nbsp;<a href="https://www.wionews.com/business-economy/in-major-setback-telecom-operators-to-pay-rs-92000-crore-as-dues-to-telecom-department-as-supreme-court-rejects-review-plea-274701">Telecom operators to pay Rs 92,000 crore as dues to telecom department, SC rejects review plea&nbsp;</a>

His remarks came hours after the apex court order on the <a href="https://www.wionews.com/business-economy/dot-asks-telcos-to-clear-dues-by-midnight-withdraws-no-coercive-action-against-defaulting-telcos-280710">AGR&nbsp;</a>dues matter.

On January 16, the Supreme Court of India had&nbsp;dismissed review petitions filed by&nbsp;Bharti Airtel, Vodafone Idea and Reliance Communications (RCom)&nbsp;challenging its judgement in the <a href="https://www.wionews.com/business-economy/in-major-setback-telecom-operators-to-pay-rs-92000-crore-as-dues-to-telecom-department-as-supreme-court-rejects-review-plea-274701">Adjusted Gross Revenue</a> (AGR) case.&nbsp;

RBI Governor Shaktikanta Das said that RBI will have internal discussions in case there are any issues arising out of the Supreme Court's order regarding Adjusted Gross Revenue (AGR) dues.

RBI Governor Shaktikanta Das said that RBI will have internal discussions in case there are any issues arising out of the Supreme Court's order regarding Adjusted Gross Revenue (AGR) dues. In a judgement on Friday, the apex court had threatened contempt proceedings against Bharti Airtel, Vodafone Idea and other telecom firms for failing to comply with its order to pay an estimated Rs 1.47 lakh crore in past dues. Also read: DoT asks telcos to clear dues by midnight, withdraws 'no coercive action against defaulters' Das did not offer any specific comments about the order, which might have ramifications on banks in terms of their exposure to the financially-stressed telecom companies. When asked about the order, Das said it would be internally deliberated upon, if at all there are issues arising out of it. On Friday, State Bank of India (SBI) Chairman Rajnish Kumar said it was incumbent on telecom companies to find money and that it would be safe to presume that they would have made some arrangements for it by now. Also read: Telecom operators to pay Rs 92,000 crore as dues to telecom department, SC rejects review plea His remarks came hours after the apex court order on the AGR dues matter. On January 16, the Supreme Court of India had dismissed review petitions filed by Bharti Airtel, Vodafone Idea and Reliance Communications (RCom) challenging its judgement in the Adjusted Gross Revenue (AGR) case.

'Will discuss internally if any issues arise out of it': RBI governor on Supreme Court's order on AGR case

India's current account and fiscal deficit might take a hit if oil prices continue to rise after an attack on Saudi Arabian oil facilities over the weekend, the Reserve Bank of India chief said on Monday.

"We should allow a few more days to see how the situation plays out before taking a final view...depending on how long it persists it will have some impact on the current account deficit and further perhaps on the fiscal deficit if it lasts longer," Governor Shaktikanta Das told the CNBC-TV18 news channel.

US officials blamed Iran for the attack, which damaged the world's biggest crude oil processing plant and led to a 19% surge in oil prices. Iran denied blame and said it was ready for "full-fledged war".

A jump in oil prices is negative for emerging markets such as India, which is the world's third-biggest importer of oil.

The country is already likely to miss its fiscal deficit target for the current financial year, despite receiving an additional dividend from the central bank, five government officials and advisers told Reuters earlier this month, as tax collections have sunk amid a sharp economic slowdown.

India's current account and fiscal deficit might take a hit if oil prices continue to rise after an attack on Saudi Arabian oil facilities over the weekend, the Reserve Bank of India chief said on Monday.

India's current account and fiscal deficit might take a hit if oil prices continue to rise after an attack on Saudi Arabian oil facilities over the weekend, the Reserve Bank of India chief said on Monday. "We should allow a few more days to see how the situation plays out before taking a final view...depending on how long it persists it will have some impact on the current account deficit and further perhaps on the fiscal deficit if it lasts longer," Governor Shaktikanta Das told the CNBC-TV18 news channel. US officials blamed Iran for the attack, which damaged the world's biggest crude oil processing plant and led to a 19% surge in oil prices. Iran denied blame and said it was ready for "full-fledged war". A jump in oil prices is negative for emerging markets such as India, which is the world's third-biggest importer of oil. The country is already likely to miss its fiscal deficit target for the current financial year, despite receiving an additional dividend from the central bank, five government officials and advisers told Reuters earlier this month, as tax collections have sunk amid a sharp economic slowdown.

India's current account under threat if oil surge continues: RBI Governor

The Indian economy has been clearly losing traction and needs a decisive monetary policy to promote growth, said Reserve Bank of India Governor Shaktikanta Das while voting for a 25 basis points (bps) rate cut along with other five members at the MPC meet earlier this month.

Das, as per the minutes of the June 3-6 Monetary Policy Committee, said that since the last meeting of the rate-setting panel in April 2019, greater clarity has emerged about the evolving macroeconomic situation.

The RBI released the minutes of the meeting Thursday.

Overall, there is clear evidence of economic activity "losing traction" with the GDP growth in the fourth quarter of the last financial year slowing to 5.8 per cent, he said.

"In sum, growth impulses have clearly weakened, while the headline inflation trajectory is projected to remain below 4.0 per cent throughout 2019-20 even after considering the expected transmission of the past two policy rate cuts.

"Keeping in view the evolving growth inflation dynamics, there is a need for decisive monetary policy action. Hence, my vote is to reduce the policy repo rate by 25 basis points," he said.

He also favoured shifting the stance of monetary policy from neutral to accommodative to send a clear signal, indicating that more measures could be taken in the near future to boost growth.

It was for the third time in a row that the RBI cut the key lending rate (repo) by 25 bps.

MPC member and RBI Deputy Governor Viral Acharya said the mixed picture on economic growth has morphed into one where at least some aspects have weakened considerably over the past two quarters. He also flagged some upside risks, including deficiency in monsoon and volatality in crude oil prices, to inflation.

"In spite of my dilemma, I vote 'albeit with some hesitation'&nbsp;to frontload the policy rate cut from 6 per cent to 5.75 per cent..." the minutes quoted him as saying.

Another member and Executive Director Michael Debabrata Patra said the risks to the primary target of monetary policy are distinctly on the ebb.

Inflation expectations, he said, are also better anchored than before.

"In fact, if one were to step back a little in time, it is evident that if the 2019-20 projections materialise, the MPC would have steered inflation at or below target on average for four years in a row in its five-year term of office," he said.

Other three members of the MPC -- Ravindra H Dholakia, Pami Dua, and Chetan Ghate -- also voted in favour of reducing the key lending rate.

Das also said quite a sizable part of loan portfolio of banks continues at the base rate, which impedes monetary transmission.

Interest rates on small savings are also higher than the prescribed formula, he said.

The transmission of the cumulative reduction of 50 basis points in the policy repo rate in February and April 2019 to fresh rupee loans has been 21 basis points.

However, the weighted average lending rate on outstanding loans has increased by 4 basis points.

"Going forward, the transmission is expected to improve, given the lags with which banks adjust their deposit and lending rates in response to changes in the policy rate," the RBI governor said.

The Indian economy has been clearly losing traction and needs a decisive monetary policy to promote growth, said Reserve Bank of India Governor Shaktikanta Das while voting for a 25 basis points (bps) rate cut along with other five members at the MPC meet earlier this month.

The Indian economy has been clearly losing traction and needs a decisive monetary policy to promote growth, said Reserve Bank of India Governor Shaktikanta Das while voting for a 25 basis points (bps) rate cut along with other five members at the MPC meet earlier this month. Das, as per the minutes of the June 3-6 Monetary Policy Committee, said that since the last meeting of the rate-setting panel in April 2019, greater clarity has emerged about the evolving macroeconomic situation. The RBI released the minutes of the meeting Thursday. Overall, there is clear evidence of economic activity "losing traction" with the GDP growth in the fourth quarter of the last financial year slowing to 5.8 per cent, he said. "In sum, growth impulses have clearly weakened, while the headline inflation trajectory is projected to remain below 4.0 per cent throughout 2019-20 even after considering the expected transmission of the past two policy rate cuts. "Keeping in view the evolving growth inflation dynamics, there is a need for decisive monetary policy action. Hence, my vote is to reduce the policy repo rate by 25 basis points," he said. He also favoured shifting the stance of monetary policy from neutral to accommodative to send a clear signal, indicating that more measures could be taken in the near future to boost growth. It was for the third time in a row that the RBI cut the key lending rate (repo) by 25 bps. MPC member and RBI Deputy Governor Viral Acharya said the mixed picture on economic growth has morphed into one where at least some aspects have weakened considerably over the past two quarters. He also flagged some upside risks, including deficiency in monsoon and volatality in crude oil prices, to inflation. "In spite of my dilemma, I vote 'albeit with some hesitation' to frontload the policy rate cut from 6 per cent to 5.75 per cent..." the minutes quoted him as saying. Another member and Executive Director Michael Debabrata Patra said the risks to the primary target of monetary policy are distinctly on the ebb. Inflation expectations, he said, are also better anchored than before. "In fact, if one were to step back a little in time, it is evident that if the 2019-20 projections materialise, the MPC would have steered inflation at or below target on average for four years in a row in its five-year term of office," he said. Other three members of the MPC -- Ravindra H Dholakia, Pami Dua, and Chetan Ghate -- also voted in favour of reducing the key lending rate. Das also said quite a sizable part of loan portfolio of banks continues at the base rate, which impedes monetary transmission. Interest rates on small savings are also higher than the prescribed formula, he said. The transmission of the cumulative reduction of 50 basis points in the policy repo rate in February and April 2019 to fresh rupee loans has been 21 basis points. However, the weighted average lending rate on outstanding loans has increased by 4 basis points. "Going forward, the transmission is expected to improve, given the lags with which banks adjust their deposit and lending rates in response to changes in the policy rate," the RBI governor said.

Economic activity clearly losing traction: RBI Governor Shaktikanta Das at MPC meet

<a href="https://www.wionews.com/business-economy/avoiding-temptation-rbi-likely-to-cut-key-rate-by-just-25-basis-points-207455">Reserve Bank of India</a> Governor Shaktikanta Das said the central bank would closely monitor the health of non-banking financial companies and it would not hesitate to take corrective measures, if needed, to address issues in the shadow banking sector.

"We will not hesitate to take any required steps to maintain financial stability in the short-, medium- and long-term," Das said in a speech on Saturday at a convocation ceremony in the western Indian city of Pune.

The comment comes at a time when there are fears that India may be facing a major crisis in its shadow banking sector after shares of Indian mortgage lender Dewan Housing Finance Corp Ltd (DHFL) plunged this week after two credit-rating firms cut their view of DHFL debt to "default" levels.

The looming trouble at DHFL comes nine months after a series of downgrades and defaults at another major NBFC, Infrastructure Leasing and Financial Services (IL&amp;FS), shook stock markets and stoked concerns of a malaise in the sector.

"<a href="https://www.wionews.com/business-economy/reserve-bank-of-indias-interest-rate-cut-in-monetary-policy-unlikely-to-stimulate-growth-report-224711">The Reserve Bank</a> will continue to monitor the activity and performance of this sector with a focus on major entities and their inter-linkages with other sectors," he said, in a speech that was published on the RBI's website late on Saturday.

The regulator will soon issue final guidelines for liquidity risk management and will put in place a comprehensive information technology framework to strengthen surveillance of NBFCs, the governor said.

Given the importance of NBFCs for the Indian economy, the governor stressed the need for a higher level of supervision of such companies to ensure solid credit growth and asset liability management.

Das said as part of initiatives to enhance supervision of NBFCs, the central bank is putting in place a system to ensure regular interaction with all stakeholders in the shadow banking value chain such as auditors, credit-rating agencies and banks.

The central bank on Friday issued new guidelines around the resolution of stressed assets after India's Supreme Court in April struck down its earlier guidelines saying it had acted beyond its powers.

The new rules "will sustain the improvements in credit culture" and help in making India's financial system strong and resilient, Das said on Saturday.

Das also urged Indian public sector banks (PSBs) to not depend solely on government capital infusions to solidify their balance sheets.

"Depending upon individual situations, PSBs should access the capital market for mobilisation of capital," he said.

Reserve Bank of India Governor Shaktikanta Das said the central bank would closely monitor the health of non-banking financial companies and it would not hesitate to take corrective measures, if needed, to address issues in the shadow banking sector.

Reserve Bank of India Governor Shaktikanta Das said the central bank would closely monitor the health of non-banking financial companies and it would not hesitate to take corrective measures, if needed, to address issues in the shadow banking sector. "We will not hesitate to take any required steps to maintain financial stability in the short-, medium- and long-term," Das said in a speech on Saturday at a convocation ceremony in the western Indian city of Pune. The comment comes at a time when there are fears that India may be facing a major crisis in its shadow banking sector after shares of Indian mortgage lender Dewan Housing Finance Corp Ltd (DHFL) plunged this week after two credit-rating firms cut their view of DHFL debt to "default" levels. The looming trouble at DHFL comes nine months after a series of downgrades and defaults at another major NBFC, Infrastructure Leasing and Financial Services (IL&FS), shook stock markets and stoked concerns of a malaise in the sector. "The Reserve Bank will continue to monitor the activity and performance of this sector with a focus on major entities and their inter-linkages with other sectors," he said, in a speech that was published on the RBI's website late on Saturday. The regulator will soon issue final guidelines for liquidity risk management and will put in place a comprehensive information technology framework to strengthen surveillance of NBFCs, the governor said. Given the importance of NBFCs for the Indian economy, the governor stressed the need for a higher level of supervision of such companies to ensure solid credit growth and asset liability management. Das said as part of initiatives to enhance supervision of NBFCs, the central bank is putting in place a system to ensure regular interaction with all stakeholders in the shadow banking value chain such as auditors, credit-rating agencies and banks. The central bank on Friday issued new guidelines around the resolution of stressed assets after India's Supreme Court in April struck down its earlier guidelines saying it had acted beyond its powers. The new rules "will sustain the improvements in credit culture" and help in making India's financial system strong and resilient, Das said on Saturday. Das also urged Indian public sector banks (PSBs) to not depend solely on government capital infusions to solidify their balance sheets. "Depending upon individual situations, PSBs should access the capital market for mobilisation of capital," he said.

Reserve Bank of India to enhance monitoring of shadow banking firms: governor

The Reserve Bank of India is likely to cement its position as Asia’s most dovish central bank with a third straight interest-rate cut Thursday. The six-member monetary policy committee led by Governor Shaktikanta Das will reduce the repurchase rate by 25 basis points to 5.75 per cent on Thursday, say 31 of 43 economists

WION Wallet: RBI cuts repo rate by 25 bps to 5.75%, Changes policy as GDP slows to 5-year lowv

Observing that the global financial crisis has exposed several limitations of conventional and unconventional monetary policy tools, Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said monetary economics in emerging markets needs a rethink.

This includes challenging the conventional wisdom of modern central banks to hike or reduce their interest rates by 25 basis points or multiples thereof, Das said in a special address delivered on the sidelines of the annual Spring Meetings of the International Monetary Fund and World Bank.

Highly appreciated by the audience for his call for out-of-the-box thinking to address monetary policy challenges of the 21st century, Das said the unconventional monetary policies of advanced economies have resulted in "risks and spillovers" for the emerging markets.

In his speech titled 'Global Risks and Policy Challenges facing Emerging Market Economies', Das observed that the global financial crisis has exposed several limitations of conventional and unconventional monetary policy tools.&nbsp;

In despair, some have turned to the heterodox evolution of ideas that are being practised as modern monetary theory, he noted.

In the end, monetary policy must touch the real economy, spur investments, and maintain monetary and financial stability, he asserted.&nbsp;

The time has come to think out of the box, including by challenging the conventional wisdom, he told the packed auditorium.&nbsp;

Typically, modern central banks with interest rates as their main instrument move in baby steps -- 25 basis points or multiples thereof -- and announce a stance of tightening, neutrality or accommodation to guide the markets and the public on the likely future course of policy, he said.&nbsp;

"One thought that comes to my mind is that if the unit of 25 basis points is not sacrosanct and just a convention, monetary policy can be well served by calibrating the size of the policy rate to the dynamics of the situation and the size of the change itself can convey the stance of policy," the RBI Governor said.&nbsp;

For instance, if easing of monetary policy is required but the central bank prefers to be cautious in its accommodation, a 10 basis points reduction in the policy rate would perhaps communicate the intent of authorities more clearly than two separate moves -- one on the policy rate, wasting 15 basis points of valuable rate action to rounding off, and the other on the stance, which in a sense binds future policy action to a pre-committed direction, he said.&nbsp;

Likewise, in a situation in which the central bank prefers to be accommodative but not overly so, it could announce a cut in the policy rate by 35 basis points if it has judged that the standard 25 basis points is too little, but its multiple, that is 50 basis points, is too much.&nbsp;

"This approach can also be useful when the central bank is on a tightening mode and potentially help avoid policy turnaround from forward guidance via stance too far into the future, which in a highly volatile global scenario, may not even be a year," Das said.&nbsp;

Stating that management of global spillovers poses a formidable challenge to emerging market economies, Das told the audience that a truly global financial safety net remains elusive as in this age of mobile capital flows, consequences of their arrivals, sudden stops and reversals are to be borne nationally.&nbsp;

As a result, emerging market economies (EMEs) are typically at the receiving end when global spillovers flare up, he said, adding that they have no recourse but to build their own forex reserve buffers.&nbsp;

Paradoxically, the accumulation of reserves has become stigmatised, including with labels such as "currency manipulation", he rued.&nbsp; 
"As I see it, we may be unintentionally setting the stage for several EME currencies to break out and challenge the hegemony of the dominant reserve currencies.&nbsp;

"There is a need for greater understanding on both sides. In the meantime, so far as the Reserve Bank of India is concerned, we will continue to play by the extant rules of the game," Das said in his special address.

Das also said central banks have to interact closely with financial markets for transmission of monetary policy impulses.&nbsp;

"In this context, ensuring a sound and efficient payment and settlement system is a pre-requisite," he noted.&nbsp;

Observing that the global financial crisis has exposed several limitations of conventional and unconventional monetary policy tools, Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said monetary economics in emerging markets needs a rethink.

Observing that the global financial crisis has exposed several limitations of conventional and unconventional monetary policy tools, Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said monetary economics in emerging markets needs a rethink. This includes challenging the conventional wisdom of modern central banks to hike or reduce their interest rates by 25 basis points or multiples thereof, Das said in a special address delivered on the sidelines of the annual Spring Meetings of the International Monetary Fund and World Bank. Highly appreciated by the audience for his call for out-of-the-box thinking to address monetary policy challenges of the 21st century, Das said the unconventional monetary policies of advanced economies have resulted in "risks and spillovers" for the emerging markets. In his speech titled 'Global Risks and Policy Challenges facing Emerging Market Economies', Das observed that the global financial crisis has exposed several limitations of conventional and unconventional monetary policy tools. In despair, some have turned to the heterodox evolution of ideas that are being practised as modern monetary theory, he noted. In the end, monetary policy must touch the real economy, spur investments, and maintain monetary and financial stability, he asserted. The time has come to think out of the box, including by challenging the conventional wisdom, he told the packed auditorium. Typically, modern central banks with interest rates as their main instrument move in baby steps -- 25 basis points or multiples thereof -- and announce a stance of tightening, neutrality or accommodation to guide the markets and the public on the likely future course of policy, he said. "One thought that comes to my mind is that if the unit of 25 basis points is not sacrosanct and just a convention, monetary policy can be well served by calibrating the size of the policy rate to the dynamics of the situation and the size of the change itself can convey the stance of policy," the RBI Governor said. For instance, if easing of monetary policy is required but the central bank prefers to be cautious in its accommodation, a 10 basis points reduction in the policy rate would perhaps communicate the intent of authorities more clearly than two separate moves -- one on the policy rate, wasting 15 basis points of valuable rate action to rounding off, and the other on the stance, which in a sense binds future policy action to a pre-committed direction, he said. Likewise, in a situation in which the central bank prefers to be accommodative but not overly so, it could announce a cut in the policy rate by 35 basis points if it has judged that the standard 25 basis points is too little, but its multiple, that is 50 basis points, is too much. "This approach can also be useful when the central bank is on a tightening mode and potentially help avoid policy turnaround from forward guidance via stance too far into the future, which in a highly volatile global scenario, may not even be a year," Das said. Stating that management of global spillovers poses a formidable challenge to emerging market economies, Das told the audience that a truly global financial safety net remains elusive as in this age of mobile capital flows, consequences of their arrivals, sudden stops and reversals are to be borne nationally. As a result, emerging market economies (EMEs) are typically at the receiving end when global spillovers flare up, he said, adding that they have no recourse but to build their own forex reserve buffers. Paradoxically, the accumulation of reserves has become stigmatised, including with labels such as "currency manipulation", he rued. "As I see it, we may be unintentionally setting the stage for several EME currencies to break out and challenge the hegemony of the dominant reserve currencies. "There is a need for greater understanding on both sides. In the meantime, so far as the Reserve Bank of India is concerned, we will continue to play by the extant rules of the game," Das said in his special address. Das also said central banks have to interact closely with financial markets for transmission of monetary policy impulses. "In this context, ensuring a sound and efficient payment and settlement system is a pre-requisite," he noted.

Monetary economics in emerging markets needs a rethink, says RBI Governor

Union Minister of Railways and former Finance Minister Piyush Goyal on Friday expressed his happiness over the rate cuts announced by the RBI.

He also praised the RBI Governor Shaktikant Das.

"I am glad that the Governor of the RBI seems to have made the right moves in the last five months," he said while speaking to reporters.

On being asked if the rate cuts should have come earlier, Goyal said, "I wish everybody was as persistent in the effort to promote growth."

The Union Minister added, "Heinous crime of politician needs to be brought out in the public and India needs to know about those politicians. Such politicians should not be given space in politics."

Goyal also talked of the advantage of Electoral bonds while claiming that his party is seriously working to bring legitimate money in the election.

"Electoral bonds advantage is that there is anonymity but you can give it to any party and nobody will know about it. We as a party had decided not to accept money without cheque or bond," he said while asserting that Electoral bonds have an important role in good governance.

The Reserve Bank of India (RBI) on Thursday cut repo rate for the second consecutive time this year to 6 per cent from the current 6.25 per cent, a move that will cheer industry leaders over relief from high borrowing costs a week before the first phase of General elections.

&nbsp;

 
&nbsp;

Union Minister of Railways and former Finance Minister Piyush Goyal on Friday expressed his happiness over the rate cuts announced by the RBI. He also praised the RBI Governor Shaktikant Das.

Union Minister of Railways and former Finance Minister Piyush Goyal on Friday expressed his happiness over the rate cuts announced by the RBI. He also praised the RBI Governor Shaktikant Das. "I am glad that the Governor of the RBI seems to have made the right moves in the last five months," he said while speaking to reporters. On being asked if the rate cuts should have come earlier, Goyal said, "I wish everybody was as persistent in the effort to promote growth." The Union Minister added, "Heinous crime of politician needs to be brought out in the public and India needs to know about those politicians. Such politicians should not be given space in politics." Goyal also talked of the advantage of Electoral bonds while claiming that his party is seriously working to bring legitimate money in the election. "Electoral bonds advantage is that there is anonymity but you can give it to any party and nobody will know about it. We as a party had decided not to accept money without cheque or bond," he said while asserting that Electoral bonds have an important role in good governance. The Reserve Bank of India (RBI) on Thursday cut repo rate for the second consecutive time this year to 6 per cent from the current 6.25 per cent, a move that will cheer industry leaders over relief from high borrowing costs a week before the first phase of General elections.

Piyush Goyal 'glad' over RBI governor 'making right moves'

WION speaks to Former RBI Governor

<a href="http://www.wionews.com/business-economy/rbi-will-not-allow-loose-money-situation-shaktikanta-das-188778">Reserve Bank of India (RBI) Governor Shaktikanta Das</a> Monday said any generalised farm loan waiver adversely impacts the credit culture and the behaviour of borrowers, amid various state governments announcing waivers.

The statement assumes significance in view of three newly elected state governments implementing farm loan waivers in their states in pursuance of poll promises.

When asked about his views on loan write-off for farmers by state governments, he said farm loan waiver is related to the fiscal space that a particular state government has.

"Elected governments have the constitutional mandate to take decisions with regard to their finance but every state government, before taking decisions on any kind of farm loan waivers, has to very carefully examine its fiscal space," he said.

"It's also for the individual governments to examine whether they have the fiscal space to meet the requirements and release the money to the banks immediately. Any generalised kind of write-off obviously has an adverse effect on the credit culture and the future credit behaviour of the borrowers," he said.

About Rs 1.47 lakh crore of agricultural loans are outstanding in Madhya Pradesh, Rajasthan, and Chhattisgarh, which announced waivers recently.

 
In 2017, Uttar Pradesh, Maharashtra, and Punjab announced to write off unpaid loans. Earlier this year, the coalition government in Karnataka also announced a farm loan waiver.

Asked about phasing out of Rs 2,000 notes, Das said the economic affairs department has clarified on the issue and there is nothing more to add to that.

Last week, the government had indicated that printing of Rs 2,000 bank notes, introduced after demonetisation in November 2016, has been stopped for now as there is enough stock in circulation.

Economic Affairs Secretary Subhash Chandra Garg had said printing of notes is planned as per the projected requirement.

"We have more than adequate notes of Rs 2,000 in the system with over 35 per cent of notes by value in circulation being of Rs 2,000. There has been no decision regarding 2,000 rupee note production recently," the secretary had said.

On the interim dividend, Das said, "as and when the RBI takes any decision on any matter, you will come to know about it."

The government has requested the RBI to give interim dividend as was done in the past. In the previous financial year, the central bank gave Rs 10,000 crore as interim dividend to the government.

"Lot of correspondence goes on between the government and the Reserve Bank. A lot of discussions do take place, whether there is an individual letter or not, that is not really relevant. As and when any decision (on interim dividend) is taken the Reserve Bank will not delay in announcing the decision," he said.

Asked if banks being given a target to come out of the non-performing asset problem, he said there is no such target given by the RBI.

"Reserve Bank takes the final decision on matters which are in its own domain, after considering all the aspects. So, Reserve Bank will listen to everybody. (It) will interact with everybody including the government but the final decision will be taken by the Reserve Bank in an objective manner to the best of its judgement," he said.

About Rs 1.47 lakh crore of agricultural loans are outstanding in Madhya Pradesh, Rajasthan, and Chhattisgarh, which announced waivers recently.

Reserve Bank of India (RBI) Governor Shaktikanta Das Monday said any generalised farm loan waiver adversely impacts the credit culture and the behaviour of borrowers, amid various state governments announcing waivers. The statement assumes significance in view of three newly elected state governments implementing farm loan waivers in their states in pursuance of poll promises. When asked about his views on loan write-off for farmers by state governments, he said farm loan waiver is related to the fiscal space that a particular state government has. "Elected governments have the constitutional mandate to take decisions with regard to their finance but every state government, before taking decisions on any kind of farm loan waivers, has to very carefully examine its fiscal space," he said. "It's also for the individual governments to examine whether they have the fiscal space to meet the requirements and release the money to the banks immediately. Any generalised kind of write-off obviously has an adverse effect on the credit culture and the future credit behaviour of the borrowers," he said. About Rs 1.47 lakh crore of agricultural loans are outstanding in Madhya Pradesh, Rajasthan, and Chhattisgarh, which announced waivers recently. In 2017, Uttar Pradesh, Maharashtra, and Punjab announced to write off unpaid loans. Earlier this year, the coalition government in Karnataka also announced a farm loan waiver. Asked about phasing out of Rs 2,000 notes, Das said the economic affairs department has clarified on the issue and there is nothing more to add to that. Last week, the government had indicated that printing of Rs 2,000 bank notes, introduced after demonetisation in November 2016, has been stopped for now as there is enough stock in circulation. Economic Affairs Secretary Subhash Chandra Garg had said printing of notes is planned as per the projected requirement. "We have more than adequate notes of Rs 2,000 in the system with over 35 per cent of notes by value in circulation being of Rs 2,000. There has been no decision regarding 2,000 rupee note production recently," the secretary had said. On the interim dividend, Das said, "as and when the RBI takes any decision on any matter, you will come to know about it." The government has requested the RBI to give interim dividend as was done in the past. In the previous financial year, the central bank gave Rs 10,000 crore as interim dividend to the government. "Lot of correspondence goes on between the government and the Reserve Bank. A lot of discussions do take place, whether there is an individual letter or not, that is not really relevant. As and when any decision (on interim dividend) is taken the Reserve Bank will not delay in announcing the decision," he said. Asked if banks being given a target to come out of the non-performing asset problem, he said there is no such target given by the RBI. "Reserve Bank takes the final decision on matters which are in its own domain, after considering all the aspects. So, Reserve Bank will listen to everybody. (It) will interact with everybody including the government but the final decision will be taken by the Reserve Bank in an objective manner to the best of its judgement," he said.

Generalised farm loan waiver impacts credit culture, says RBI Governor Shaktikanta Das

The outgoing year marks a watershed in the annals of the country’s apex bank as the Reserve Bank of India (RBI) turned out to be a tussling ground for its governor and the government.

The denouement came when the soft, scholarly and self-effacing twenty-fourth governor of the central bank, Urjit Patel, called it quits on December 10 and the government lost little time in filling the vacancy with a retired career bureaucrat and Member Fifteenth Finance Commission, Shaktikanta Das.

In a written reply to a query, Minister of State for Finance Shiv Pratap Shukla, conceded in the Lok Sabha on December 14 that the “government asked RBI for a review of its Economic Capital Framework (ECF) adopted in 2016… the board has decided to constitute an Expert Committee to examine the ECF, the membership of the terms of reference of which will be jointly determined by the government and the RBI”.&nbsp;

It needs to be noted that the erstwhile governor Patel stuck to his guns in not yielding an inch in the governing structure and economic policy framework that would translate into more access to the government to RBI’s surplus reserves of Rs 9.3 lakh crore.

This is all the more so when the RBI has the big mandate to keep inflation at four per cent within a band of plus/minus one per cent. So any leeway or access to the surplus funds parked with the banking regulator being extended to the government especially at a time when the nation is going to the mega polls in 2019, is bound to goad it to splurge on goodies and other populist schemes that would only stoke and fuel inflationary fires before long. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;

Though other weighty issues such as credit and liquidity being made reasonably available to the real sectors of the economy and at an affordable cost, the central bank is seized of the problems and is taking steps to ensure that credit delivery to the vital sectors is ensured through various ongoing measures it had kept unveiling from time to time.&nbsp;

RBI data reveals that the banking system’s non-food credit growth, which touched a nadir to 7-8 per cent in the three years to October 2017 (when the RBI cracked the whip to cleanse the stable of sore NPAs), returned to double-digit growth between October 2017 to October 2018 at 13 per cent.

The arrival of a bureaucrat to the RBI as its top man is coterminous with the efforts of the BJP-led NDA government to revive the fortunes of the slowing economy. For Shaktikanta Das, who was instrumental in altering the industrial landscape of Tamil Nadu as the Industries Secretary in two spells, his elevation to the corner office of the central bank is bound to be keenly watched by wonks. He had worked in the Finance Ministry at various levels and was representing the government side in framing the inflation-targeting as the supreme remit of the RBI, besides being a vocal supporter of the controversial demonetisation policy of the government.

He has plates full of priority issues that range from RBI governance, transfer of RBI reserves to the government, systemic liquidity encompassing a window for distressed finance companies, relaxation of the February 12 circular, which hardened the norms for non-performing loans to allowing banks that are in the Prompt Corrective Action (PCA) category, to resume lending.&nbsp;

The first board meeting he presided over on December 14 was shorn of drama/trauma, confined to less than an hour by resolving to examine the issues further, review liquidity, credit delivery and economic situation.

As its next board meeting is in January 2019, Das must perforce have to balance his new avatar as a central banker with his quondam position as one from the other side of the ring, so that he is seen not abandoning the quest of his predecessor bureaucrat-turned RBI governors such as YV Reddy and D Subba Rao, who strove to ensure the autonomy, credibility and independence of the RBI even by demurring with their Finance Ministers in their own unobtrusive ways.

(This article was originally published on DNA. Read the <a href="https://www.dnaindia.com/analysis/column-shaktikanta-das-has-a-job-cut-out-for-himself-at-rbi-2699553">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

The outgoing year marks a watershed in the annals of the country’s apex bank as the Reserve Bank of India (RBI) turned out to be a tussling ground for its governor and the government.

The outgoing year marks a watershed in the annals of the country’s apex bank as the Reserve Bank of India (RBI) turned out to be a tussling ground for its governor and the government. The denouement came when the soft, scholarly and self-effacing twenty-fourth governor of the central bank, Urjit Patel, called it quits on December 10 and the government lost little time in filling the vacancy with a retired career bureaucrat and Member Fifteenth Finance Commission, Shaktikanta Das. In a written reply to a query, Minister of State for Finance Shiv Pratap Shukla, conceded in the Lok Sabha on December 14 that the “government asked RBI for a review of its Economic Capital Framework (ECF) adopted in 2016… the board has decided to constitute an Expert Committee to examine the ECF, the membership of the terms of reference of which will be jointly determined by the government and the RBI”. It needs to be noted that the erstwhile governor Patel stuck to his guns in not yielding an inch in the governing structure and economic policy framework that would translate into more access to the government to RBI’s surplus reserves of Rs 9.3 lakh crore. This is all the more so when the RBI has the big mandate to keep inflation at four per cent within a band of plus/minus one per cent. So any leeway or access to the surplus funds parked with the banking regulator being extended to the government especially at a time when the nation is going to the mega polls in 2019, is bound to goad it to splurge on goodies and other populist schemes that would only stoke and fuel inflationary fires before long. Though other weighty issues such as credit and liquidity being made reasonably available to the real sectors of the economy and at an affordable cost, the central bank is seized of the problems and is taking steps to ensure that credit delivery to the vital sectors is ensured through various ongoing measures it had kept unveiling from time to time. RBI data reveals that the banking system’s non-food credit growth, which touched a nadir to 7-8 per cent in the three years to October 2017 (when the RBI cracked the whip to cleanse the stable of sore NPAs), returned to double-digit growth between October 2017 to October 2018 at 13 per cent. The arrival of a bureaucrat to the RBI as its top man is coterminous with the efforts of the BJP-led NDA government to revive the fortunes of the slowing economy. For Shaktikanta Das, who was instrumental in altering the industrial landscape of Tamil Nadu as the Industries Secretary in two spells, his elevation to the corner office of the central bank is bound to be keenly watched by wonks. He had worked in the Finance Ministry at various levels and was representing the government side in framing the inflation-targeting as the supreme remit of the RBI, besides being a vocal supporter of the controversial demonetisation policy of the government. He has plates full of priority issues that range from RBI governance, transfer of RBI reserves to the government, systemic liquidity encompassing a window for distressed finance companies, relaxation of the February 12 circular, which hardened the norms for non-performing loans to allowing banks that are in the Prompt Corrective Action (PCA) category, to resume lending. The first board meeting he presided over on December 14 was shorn of drama/trauma, confined to less than an hour by resolving to examine the issues further, review liquidity, credit delivery and economic situation. As its next board meeting is in January 2019, Das must perforce have to balance his new avatar as a central banker with his quondam position as one from the other side of the ring, so that he is seen not abandoning the quest of his predecessor bureaucrat-turned RBI governors such as YV Reddy and D Subba Rao, who strove to ensure the autonomy, credibility and independence of the RBI even by demurring with their Finance Ministers in their own unobtrusive ways. (This article was originally published on DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Shaktikanta Das has a job cut out for himself at RBI

Former RBI Governor <a href="http://www.wionews.com/india-news/all-indians-should-be-concerned-raghuram-rajan-on-patels-resignation-182989">Raghuram Rajan</a> Friday said there is need to reduce uncompensated government mandates imposed on public sector banks (PSBs).

"This is lazy government if an action is worth doing, it should be paid out of budgetary resources. It also is against the interests of minority shareholders in PSBs," he said here.

The government should incentivise all banks to take up activities it thinks desirable, not impose it on a few, especially as the privileges associated with a banking license diminish, he said.

Along these lines, requirements that banks mandatorily invest in government bonds (the SLR requirement) should continue to be reduced, substituting instead with the liquidity coverage ratios and net stable funding ratios set by Basel, he added.

He further said public sector banks still not adequately professionalised and there is a need to substantially improve risk management.&nbsp;

Former RBI Governor Raghuram Rajan Friday said there is need to reduce uncompensated government mandates imposed on public sector banks (PSBs). "This is lazy government if an action is worth doing, it should be paid out of budgetary resources.

Former RBI Governor Raghuram Rajan Friday said there is need to reduce uncompensated government mandates imposed on public sector banks (PSBs). "This is lazy government if an action is worth doing, it should be paid out of budgetary resources. It also is against the interests of minority shareholders in PSBs," he said here. The government should incentivise all banks to take up activities it thinks desirable, not impose it on a few, especially as the privileges associated with a banking license diminish, he said. Along these lines, requirements that banks mandatorily invest in government bonds (the SLR requirement) should continue to be reduced, substituting instead with the liquidity coverage ratios and net stable funding ratios set by Basel, he added. He further said public sector banks still not adequately professionalised and there is a need to substantially improve risk management.

Reduce number, weight of government mandates for PSBs: Raghuram Rajan

The central board of the Reserve Bank of India (RBI) under new Governor Shaktikanta Das will meet on Friday where the directors are likely to push for a greater say in the decision making of the central bank.

The meeting will review the progress with respect to some of the decisions taken in the last meet on November 19. Among other things, the crucial board meeting is expected to take a stock of Micro, Small &amp; Medium Enterprises (MSMEs), which is under stress due to demonetisation and implementation of the Goods and Services Tax (GST).

This scheduled meeting comes in the backdrop of surprise resignation by Urjit Patel earlier this week citing personal reasons. However, the tussle between the Finance Ministry and RBI was attributed as a reason for the sudden exit of Patel, who would have completed his 3-year term in September 2019.

According to sources, one of the key agenda for the upcoming board meeting will be governance issue -- the role of the central board in the decision making of the RBI.

Given the current structure, the central board plays an advisery role but there is growing clamour to make it operational and have greater participation in key decisions of the central bank.

The government as one of the important stakeholders also wants greater involvement in the RBI's decision making as it feels the current practice leaves it out on many critical issues like single-day default turning a loan into an NPA, sources said.

However, former governors and other experts have pitched for the independence and autonomy of the RBI and want the board to play advisery role with given composition.

The central board of the RBI is headed by the governor and includes two government nominee directors and 11 independent directors. Currently, the central board has 18 members, with the provision of going up to 21.

Soon after taking reins of the RBI, Das said, he will try to uphold the autonomy, credibility and the integrity of the "great institution" and take every stakeholder, including the government, along in a consultative manner.

The former Economic Affairs Secretary, who took over as the 25th Governor Wednesday said, he will take measures which the economy requires in a timely manner.

On the second day, he held consultation with heads of the Mumbai-based public sector bankers to discuss issues faced by them.

It is expected that relaxation of the Prompt Corrective Action (PCA) framework for weak banks would also come up for the discussion under the new the governor.

Of the 21 state-owned banks, 11 are under the PCA framework. These are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.

The PCA framework kicks in when banks breach any of the three key regulatory trigger points -- namely capital to risk-weighted assets ratio, net non-performing assets (NPA) and return on assets (RoA).

With regard to economic capital framework, the new governor said as decided in the board meeting an expert committee in consultation with the government will be constituted soon to examine the issue.&nbsp;

The central board of the Reserve Bank of India (RBI) under new Governor Shaktikanta Das will meet on Friday where the directors are likely to push for a greater say in the decision making of the central bank.

The central board of the Reserve Bank of India (RBI) under new Governor Shaktikanta Das will meet on Friday where the directors are likely to push for a greater say in the decision making of the central bank. The meeting will review the progress with respect to some of the decisions taken in the last meet on November 19. Among other things, the crucial board meeting is expected to take a stock of Micro, Small & Medium Enterprises (MSMEs), which is under stress due to demonetisation and implementation of the Goods and Services Tax (GST). This scheduled meeting comes in the backdrop of surprise resignation by Urjit Patel earlier this week citing personal reasons. However, the tussle between the Finance Ministry and RBI was attributed as a reason for the sudden exit of Patel, who would have completed his 3-year term in September 2019. According to sources, one of the key agenda for the upcoming board meeting will be governance issue -- the role of the central board in the decision making of the RBI. Given the current structure, the central board plays an advisery role but there is growing clamour to make it operational and have greater participation in key decisions of the central bank. The government as one of the important stakeholders also wants greater involvement in the RBI's decision making as it feels the current practice leaves it out on many critical issues like single-day default turning a loan into an NPA, sources said. However, former governors and other experts have pitched for the independence and autonomy of the RBI and want the board to play advisery role with given composition. The central board of the RBI is headed by the governor and includes two government nominee directors and 11 independent directors. Currently, the central board has 18 members, with the provision of going up to 21. Soon after taking reins of the RBI, Das said, he will try to uphold the autonomy, credibility and the integrity of the "great institution" and take every stakeholder, including the government, along in a consultative manner. The former Economic Affairs Secretary, who took over as the 25th Governor Wednesday said, he will take measures which the economy requires in a timely manner. On the second day, he held consultation with heads of the Mumbai-based public sector bankers to discuss issues faced by them. It is expected that relaxation of the Prompt Corrective Action (PCA) framework for weak banks would also come up for the discussion under the new the governor. Of the 21 state-owned banks, 11 are under the PCA framework. These are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra. The PCA framework kicks in when banks breach any of the three key regulatory trigger points -- namely capital to risk-weighted assets ratio, net non-performing assets (NPA) and return on assets (RoA). With regard to economic capital framework, the new governor said as decided in the board meeting an expert committee in consultation with the government will be constituted soon to examine the issue.

New RBI Governor Das to steer first central board meet Friday

Social media question Shaktikanta Das, new RBI Governor qualification

Former Economic Affairs Secretary Shaktikanta Das Wednesday assumed charge as the RBI Governor.

He replaces Urjit Patel who abruptly resigned amid a face-off with the government over issues related to governance and autonomy of the central bank.

"Assumed charge as Governor, Reserve Bank of India. Thank you each and everyone for your good wishes," Das said in a tweet.

Finance Minister Arun Jaitley termed Das as a person with "right credentials" for the RBI top job.

"Das has been a very senior and an experienced civil servant. He has almost his entire career in the management of finances and economic management of the country both, when he was in the state government of Tamil Nadu and also when he was in the Government of India in the Ministry of Finance," Jaitley said.

Das, who becomes 25th governor of the RBI, is a former IAS officer of Tamil Nadu cadre.

Jaitley said his appointment was necessitated by the resignation of Urjit Patel as Governor of the RBI on Monday.

"I think, he (Das) has the right credentials. He has been extremely professional, has worked under various governments and has excelled himself. I am sure, in meeting the challenges before India's economy as Governor of Reserve Bank, he will certainly act," the finance minister said.&nbsp;

Former Economic Affairs Secretary Shaktikanta Das Wednesday assumed charge as the RBI Governor. He replaces Urjit Patel who abruptly resigned amid a face-off with the government over issues related to governance and autonomy of the central bank.

Former Economic Affairs Secretary Shaktikanta Das Wednesday assumed charge as the RBI Governor. He replaces Urjit Patel who abruptly resigned amid a face-off with the government over issues related to governance and autonomy of the central bank. "Assumed charge as Governor, Reserve Bank of India. Thank you each and everyone for your good wishes," Das said in a tweet. Finance Minister Arun Jaitley termed Das as a person with "right credentials" for the RBI top job. "Das has been a very senior and an experienced civil servant. He has almost his entire career in the management of finances and economic management of the country both, when he was in the state government of Tamil Nadu and also when he was in the Government of India in the Ministry of Finance," Jaitley said. Das, who becomes 25th governor of the RBI, is a former IAS officer of Tamil Nadu cadre. Jaitley said his appointment was necessitated by the resignation of Urjit Patel as Governor of the RBI on Monday. "I think, he (Das) has the right credentials. He has been extremely professional, has worked under various governments and has excelled himself. I am sure, in meeting the challenges before India's economy as Governor of Reserve Bank, he will certainly act," the finance minister said.

Shaktikanta Das assumes charge as 25th RBI governor

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