The Reserve Bank of India (RBI) on Saturday (July 16) said that the country's economy remained resilient in the face of global headwinds. India's top bank also predicted that India is anticipated to continue on the path to becoming the world's fastest-growing economy as inflation declines from its recent peak. Reuters reports that RBI in a bulletin said that recent improvements in the southwest monsoon and fresh planting have increased confidence that rural demand will soon catch up to urban spending and consolidate a recovery. "Knock-on effects of geopolitical spill overs are visible in several sectors, tapering the pace of recovery."

Watch |&nbsp;Recession fears and Indian-based firms | Shashank Srivastava Exclusive

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"In spite of this overwhelming shock, there are sparks in the wind that ignite the innate strength of the economy and set it on course to becoming the fastest growing economy in the world, though besieged it might be by fears of recession."

RBI did not give a time frame,&nbsp;however, according to it, the worst of the recent inflation spike will be over if the commodity price slowdown seen in recent weeks persists together with the reduction of supply chain pressures.

Also read |&nbsp;<a href="https://www.wionews.com/india-news/vice-president-election-2022-ruling-bjp-allies-pick-bengal-governor-jagdeep-dhankhar-498133" hreflang="en">Vice President election 2022: Ruling BJP, allies pick Bengal Governor Jagdeep Dhankhar</a>

"There is some evidence now that supply-chain pressures are peaking globally and in India," the bank said, adding that "a major source of upward inflation pressures may be ebbing."

"External debt remains modest as a proportion to GDP and has actually declined between March 2021 and March 2022," RBI said.

Also read |&nbsp;<a href="https://www.wionews.com/india/government-of-india-to-make-silicon-valley-tech-giants-pay-for-content-to-news-publishers-498052" hreflang="en">Government of India to make Silicon Valley tech giants pay for content to news publishers</a>

Reuters reports that according to figures released this week, India's annual consumer inflation remained agonisingly high above the 7 per cent mark, more than the central bank's tolerance range for the sixth consecutive month.

(With inputs from agencies)

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The Reserve Bank of India (RBI) on Saturday (July 16) said that the country's economy remained resilient in the face of global headwinds. India's top bank also predicted that India is anticipated to continue on the path to becoming the world's fastest-growing economy as inflation declines from its recent peak.

The Reserve Bank of India (RBI) on Saturday (July 16) said that the country's economy remained resilient in the face of global headwinds. India's top bank also predicted that India is anticipated to continue on the path to becoming the world's fastest-growing economy as inflation declines from its recent peak. Reuters reports that RBI in a bulletin said that recent improvements in the southwest monsoon and fresh planting have increased confidence that rural demand will soon catch up to urban spending and consolidate a recovery. "Knock-on effects of geopolitical spill overs are visible in several sectors, tapering the pace of recovery." Watch | Recession fears and Indian-based firms | Shashank Srivastava Exclusive "In spite of this overwhelming shock, there are sparks in the wind that ignite the innate strength of the economy and set it on course to becoming the fastest growing economy in the world, though besieged it might be by fears of recession." RBI did not give a time frame, however, according to it, the worst of the recent inflation spike will be over if the commodity price slowdown seen in recent weeks persists together with the reduction of supply chain pressures. Also read | Vice President election 2022: Ruling BJP, allies pick Bengal Governor Jagdeep Dhankhar "There is some evidence now that supply-chain pressures are peaking globally and in India," the bank said, adding that "a major source of upward inflation pressures may be ebbing." "External debt remains modest as a proportion to GDP and has actually declined between March 2021 and March 2022," RBI said. Also read | Government of India to make Silicon Valley tech giants pay for content to news publishers Reuters reports that according to figures released this week, India's annual consumer inflation remained agonisingly high above the 7 per cent mark, more than the central bank's tolerance range for the sixth consecutive month. (With inputs from agencies) Watch WION LIVE HERE: You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

India is 'on course to becoming the fastest growing economy in the world': RBI

The Reserve Bank of India has rolled out a system to settle international trade transactions in the Indian rupee instead of the dollar. How does the rupee trade work? How will it impact India's trade relations? Palki Sharma tells you.

Gravitas: RBI announces rupee mechanism for foreign trade

an Indian Central Bank RBI has introduced a rupee settlement system for international trade yesterday the system could help Indian promotes its export and facilitate trade with countries under sanction now under the new mechanism exporters and importers can use

RBI allows payment for International trade in Rupee

India's headline retail inflation eased to 7.04 per cent in May from an 8-year high of 7.79 per cent recorded in the previous month on softening food prices, government data showed on Monday.

A favourable base effect is among the major reasons for the decline in the inflation numbers in May 2022.

Consumer Price Index (CPI) based retail inflation stood at 6.3 per cent in May 2021.

Also read |&nbsp;<a href="https://www.wionews.com/business-economy/indian-rupee-slides-to-record-low-of-7782-against-us-dollar-486849">Indian rupee slides to record low of 77.82 against US dollar</a>

Despite the decline, the headline inflation remains above the Reserve Bank of India (RBI) upper tolerance level of 6 per cent for the fifth consecutive month.

Rural retail inflation declined to 7.01 per cent in May 2022 from 8.38 per cent recorded in the previous month.

CPI-based urban inflation declined to 7.08 per cent during the month under review from 7.09 per cent in April 2022, as per the data released by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation.

Food inflation based on Consumer Food Price Index (CFPI) eased to 7.97 per cent in May 2022 from 8.31 per cent in the previous month.

Watch |&nbsp;US inflation hits new 40-year high, no respite from rising costs

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In May 2021, CFPI-based food inflation stood at 5.01 per cent.

The CPI-based retail inflation is projected to remain at 7.5 per cent in the first quarter of the current financial year, as per the RBI.

In it's&nbsp;monetary policy review last week, the RBI raised the inflation forecast for the current financial year to 6.7 per cent from its earlier projection of 5.7 per cent.

As per the RBI's new projection announced after the Monetary Policy Committee (MPC) meeting, inflation is likely to remain above the central bank's upper tolerance limit of 6 per cent for the first three quarters of 2022-23.

Also read |&nbsp;<a href="https://www.wionews.com/india/rbi-raises-repo-rate-by-50bps-to-49-to-fight-inflation-pressure-486153">RBI raises repo rate by 50bps to 4.9% to fight inflation pressure</a>

In the second quarter CPI-based retail inflation is projected at 7.4 per cent and for the third quarter, it is projected at 6.2 per cent, as per the RBI.

Inflation is likely to come within the RBI's tolerance limit in the fourth quarter of 2022-23.

For the fourth quarter of the current financial year, the RBI's forecast for inflation is 5.8 per cent.

For the calculation of the May inflation data, the Ministry of Statistics and Programme Implementation said, "price data are collected from selected 1114 urban markets and 1181 villages covering all States/UTs through personal visits by field staff of Field Operations Division of NSO, MoSPI on a weekly roster".

"During the month of May 2022, NSO collected prices from 99.8 per cent of villages and 98.3 per cent urban markets while the market-wise prices reported therein were 90.0 per cent for rural and 93.1 per cent for urban", the ministry said in a statement.

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India's headline retail inflation eased to 7.04 per cent in May from an 8-year high of 7.79 per cent recorded in the previous month on softening food prices, government data showed on Monday.

India's headline retail inflation eased to 7.04 per cent in May from an 8-year high of 7.79 per cent recorded in the previous month on softening food prices, government data showed on Monday. A favourable base effect is among the major reasons for the decline in the inflation numbers in May 2022. Consumer Price Index (CPI) based retail inflation stood at 6.3 per cent in May 2021. Also read | Indian rupee slides to record low of 77.82 against US dollar Despite the decline, the headline inflation remains above the Reserve Bank of India (RBI) upper tolerance level of 6 per cent for the fifth consecutive month. Rural retail inflation declined to 7.01 per cent in May 2022 from 8.38 per cent recorded in the previous month. CPI-based urban inflation declined to 7.08 per cent during the month under review from 7.09 per cent in April 2022, as per the data released by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation. Food inflation based on Consumer Food Price Index (CFPI) eased to 7.97 per cent in May 2022 from 8.31 per cent in the previous month. Watch | US inflation hits new 40-year high, no respite from rising costs In May 2021, CFPI-based food inflation stood at 5.01 per cent. The CPI-based retail inflation is projected to remain at 7.5 per cent in the first quarter of the current financial year, as per the RBI. In it's monetary policy review last week, the RBI raised the inflation forecast for the current financial year to 6.7 per cent from its earlier projection of 5.7 per cent. As per the RBI's new projection announced after the Monetary Policy Committee (MPC) meeting, inflation is likely to remain above the central bank's upper tolerance limit of 6 per cent for the first three quarters of 2022-23. Also read | RBI raises repo rate by 50bps to 4.9% to fight inflation pressure In the second quarter CPI-based retail inflation is projected at 7.4 per cent and for the third quarter, it is projected at 6.2 per cent, as per the RBI. Inflation is likely to come within the RBI's tolerance limit in the fourth quarter of 2022-23. For the fourth quarter of the current financial year, the RBI's forecast for inflation is 5.8 per cent. For the calculation of the May inflation data, the Ministry of Statistics and Programme Implementation said, "price data are collected from selected 1114 urban markets and 1181 villages covering all States/UTs through personal visits by field staff of Field Operations Division of NSO, MoSPI on a weekly roster". "During the month of May 2022, NSO collected prices from 99.8 per cent of villages and 98.3 per cent urban markets while the market-wise prices reported therein were 90.0 per cent for rural and 93.1 per cent for urban", the ministry said in a statement. Watch WION LIVE HERE:

Retail inflation eases to 7.04 per cent in May; remains above RBI tolerance band for 5th month in row

The Reserve Bank of India's key interest rate was raised by 50 basis points on Wednesday as widely expected, the second hike in as many months, in a bid to cool persistently high inflation in Asia's third-largest economy.

The central bank also dropped the long-standing phrase that future policy would remain 'accommodative', reinforcing expectations of further rate hikes and other forms of tightening in coming months as fighting inflation becomes its main focus.

"Upside risks to inflation as highlighted in last policy meetings have materialized earlier than expected," RBI Governor Shaktikanta Das said after the policy decision.

Also read |&nbsp;<a href="https://www.wionews.com/india-news/rbi-can-use-watermark-figures-of-rabindranath-tagore-and-apj-abdul-kalam-on-currency-instead-of-mahatma-gandhi-485508">RBI can use watermark figures of Rabindranath Tagore and APJ Abdul Kalam on currency instead of Mahatma Gandhi</a>

The monetary policy committee (MPC) raised the key lending rate or the repo rate by 50 basis points (bps) to 4.90%. The Standing Deposit Facility rate and the Marginal Standing Facility Rate were adjusted higher by the same quantum to 4.65% and 5.15%, respectively.

Das had said earlier that a June 8 move was a "no brainer". But analysts polled by Reuters had been divided over how much it would hike, with forecasts ranging between 25 and 75 bps.

Wednesday's increase follows a 40-bps rise in early May at an unscheduled meeting that kicked off the central bank's tightening cycle, which economists expect to be relatively short.

"The more hawkish tone on inflation suggests to us that the MPC will continue to frontload policy tightening over the coming months, perhaps with another a 50bp hike in the next scheduled meeting in August," said Shilan Shah, senior India economist at Capital Economics.

PRICE PRESSURES INTENSIFYING

Das said inflation will likely remain above the RBI's upper tolerance band in the first three quarters of the financial year that started on April 1.

"The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth," Das said.

Retail inflation in April accelerated to 7.79% from a year earlier, above the RBI's tolerance band for inflation of 2% to 6% for a fourth month in a row, and a further rise in global prices of crude oil, food and other commodities is expected to keep up the upward pressure.

The price spikes have hammered consumer spending and darkened the near-term outlook for India's economic growth, which slowed to the lowest in a year in the first three months of 2022.

The RBI raised its inflation projection for 2022/23 to 6.7% from 5.7% earlier, while maintaining its growth projection at 7.2%.

The central bank had slashed the repo rate by a total of 115 bps since March 2020 to soften the blow from the COVID-19 crisis.

India's 10-year benchmark bond yield fell to a low of 7.43% from the day's high of 7.56% after the policy decision, while the rupee was little changed at 77.69 per dollar.

Also read |<a href="https://www.wionews.com/videos/indias-central-bank-rbi-hikes-interest-rate-476462">&nbsp;India's central bank RBI hikes interest rate</a>

"The comment on the orderly completion of the government borrowing programme has served to cool the 10-year G-sec yield," said Aditi Nayar, chief economist at rating agency ICRA.

India's NSE share index and the BSE index both recouped losses to trade up 0.2% each. [.BO]

"We were expecting a cash reserve ratio hike of 50 bps which did not happen," said Vivek Kumar, economist at research firm QuantEco.

"However, we would still expect some sort of a liquidity action in line with the assumption of guiding the overall surplus lower. This can happen via CRR route or via increased FX intervention (dollar sales) by the RBI," he added.

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The Reserve Bank of India's key interest rate was raised by 50 basis points on Wednesday as widely expected, the second hike in as many months, in a bid to cool persistently high inflation in Asia's third-largest economy.

The Reserve Bank of India's key interest rate was raised by 50 basis points on Wednesday as widely expected, the second hike in as many months, in a bid to cool persistently high inflation in Asia's third-largest economy. The central bank also dropped the long-standing phrase that future policy would remain 'accommodative', reinforcing expectations of further rate hikes and other forms of tightening in coming months as fighting inflation becomes its main focus. "Upside risks to inflation as highlighted in last policy meetings have materialized earlier than expected," RBI Governor Shaktikanta Das said after the policy decision. Also read | RBI can use watermark figures of Rabindranath Tagore and APJ Abdul Kalam on currency instead of Mahatma Gandhi The monetary policy committee (MPC) raised the key lending rate or the repo rate by 50 basis points (bps) to 4.90%. The Standing Deposit Facility rate and the Marginal Standing Facility Rate were adjusted higher by the same quantum to 4.65% and 5.15%, respectively. Das had said earlier that a June 8 move was a "no brainer". But analysts polled by Reuters had been divided over how much it would hike, with forecasts ranging between 25 and 75 bps. Wednesday's increase follows a 40-bps rise in early May at an unscheduled meeting that kicked off the central bank's tightening cycle, which economists expect to be relatively short. "The more hawkish tone on inflation suggests to us that the MPC will continue to frontload policy tightening over the coming months, perhaps with another a 50bp hike in the next scheduled meeting in August," said Shilan Shah, senior India economist at Capital Economics. PRICE PRESSURES INTENSIFYING Das said inflation will likely remain above the RBI's upper tolerance band in the first three quarters of the financial year that started on April 1. "The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth," Das said. Retail inflation in April accelerated to 7.79% from a year earlier, above the RBI's tolerance band for inflation of 2% to 6% for a fourth month in a row, and a further rise in global prices of crude oil, food and other commodities is expected to keep up the upward pressure. The price spikes have hammered consumer spending and darkened the near-term outlook for India's economic growth, which slowed to the lowest in a year in the first three months of 2022. The RBI raised its inflation projection for 2022/23 to 6.7% from 5.7% earlier, while maintaining its growth projection at 7.2%. The central bank had slashed the repo rate by a total of 115 bps since March 2020 to soften the blow from the COVID-19 crisis. India's 10-year benchmark bond yield fell to a low of 7.43% from the day's high of 7.56% after the policy decision, while the rupee was little changed at 77.69 per dollar. Also read | India's central bank RBI hikes interest rate "The comment on the orderly completion of the government borrowing programme has served to cool the 10-year G-sec yield," said Aditi Nayar, chief economist at rating agency ICRA. India's NSE share index and the BSE index both recouped losses to trade up 0.2% each. [.BO] "We were expecting a cash reserve ratio hike of 50 bps which did not happen," said Vivek Kumar, economist at research firm QuantEco. "However, we would still expect some sort of a liquidity action in line with the assumption of guiding the overall surplus lower. This can happen via CRR route or via increased FX intervention (dollar sales) by the RBI," he added. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

RBI raises repo rate by 50bps to 4.9% to fight inflation pressure

The Reserve Bank of India has once again raised the primary lending rate and this time by 50 basis points as inflation continues to remain above its comfort level. Now the new lending rate from reserve bank to other public and private banks has now been increased to 4.9% from 4.4%.

Indian Central Bank raises key lending rate by 50 basis points

The Reserve Bank of India (RBI) raised the repo rate - at which it lends money to commercial banks - by 40 basis points to 4.4%.

India's central bank RBI hikes interest rate

The Reserve Bank of India hiked lending rates to tame inflation after two years of massive public spending. Central banks around the world are doing the same after inflation hit multi-decade highs. Is the pandemic-era spending spree over? Palki Sharma tells you.

Gravitas: India's Central Bank hikes interest rates

As a result of the Reserve Bank of India's (RBI) surprise repo rate hike of 40 basis points amid strong inflation, monthly instalments (EMIs) are projected to rise.

The Reserve Bank of India upped its repurchase rate to 4.40 percent, from the record low 4 percent it had been held at for the past two years to boost the economy, in its first unannounced rate change since the pandemic's peak.

A variable rate loan's EMI fluctuates in response to changes in market interest rates. If market rates rise, the repayment amount rises as well. When interest rates drop, so do the dues.

When the central bank raises interest rates or the repo rate (the rate at which banks borrow from the RBI), customer loans become more expensive as a result of the interest rate hike.

This is due to the fact that banks must purchase funds from the central bank at higher prices, forcing them to raise their lending rates.

Sensex crashes by over 1,200 points

The Sensex plummeted nearly 1,200 points in late afternoon trade on Wednesday after the Reserve Bank raised the benchmark lending rate to 4.40 percent in an effort to keep inflation under control.

At 3.30 p.m., the 30-share BSE benchmark had dropped over 1,200 points, or 2.2%, to below 56,000.

The Nifty of the National Stock Exchange fell 317.75 points, or 1.86 percent, to 16,751.35.

The Reserve Bank of India (RBI) raised the benchmark lending rate by 40 basis points to 4.40 percent on Wednesday in an effort to keep inflation under control, which has remained stubbornly over the 6% target zone for the past three months.

As a result of the Reserve Bank of India's (RBI) surprise repo rate hike of 40 basis points amid strong inflation, monthly instalments (EMIs) are projected to rise.

As a result of the Reserve Bank of India's (RBI) surprise repo rate hike of 40 basis points amid strong inflation, monthly instalments (EMIs) are projected to rise. The Reserve Bank of India upped its repurchase rate to 4.40 percent, from the record low 4 percent it had been held at for the past two years to boost the economy, in its first unannounced rate change since the pandemic's peak. A variable rate loan's EMI fluctuates in response to changes in market interest rates. If market rates rise, the repayment amount rises as well. When interest rates drop, so do the dues. When the central bank raises interest rates or the repo rate (the rate at which banks borrow from the RBI), customer loans become more expensive as a result of the interest rate hike. This is due to the fact that banks must purchase funds from the central bank at higher prices, forcing them to raise their lending rates. Sensex crashes by over 1,200 points The Sensex plummeted nearly 1,200 points in late afternoon trade on Wednesday after the Reserve Bank raised the benchmark lending rate to 4.40 percent in an effort to keep inflation under control. At 3.30 p.m., the 30-share BSE benchmark had dropped over 1,200 points, or 2.2%, to below 56,000. The Nifty of the National Stock Exchange fell 317.75 points, or 1.86 percent, to 16,751.35. The Reserve Bank of India (RBI) raised the benchmark lending rate by 40 basis points to 4.40 percent on Wednesday in an effort to keep inflation under control, which has remained stubbornly over the 6% target zone for the past three months.

RBI's surprise repo rate hike: Loan EMIs seen rising, Sensex tanks 1,200 points

In an unexpected move, RBI Governor Shaktikanta Das announced on Wednesday that the Monetary Policy Committee (MPC) unanimously voted to raise the policy repo rate by 40 basis points (bps) to 4.40 percent with immediate effect, citing persistent inflationary pressures in the economy.&nbsp;

The RBI has raised borrowing rates for the first time since August 2018.

The MPC has also opted to remain accommodative while focusing on withdrawal, implying a reversal of the rate action in 2020, which saw 75 basis points slashed after the world economy was thrown into disarray following the COVID-19 epidemic.

Explaining the decision, he said, "MPC decided to hold an off-cycle meeting to reassess the inflation-growth dynamics.&nbsp;There is a collateral risk of inflated inflation for a long time. "

Persistent inflation pressures are becoming more acute, Governor Shaktikanta Das said in an online briefing, adding that there is a risk that prices stay at this level for "too long" and expectations become unanchored.&nbsp;

The bank’s next scheduled rate decision isn’t until June 8.

As inflation rose, the RBI became more hawkish in its April policy, shifting its focus from growth to inflation.&nbsp;

In March, headline inflation was 6.95 per cent, exceeding the Reserve Bank of India's 6 per cent comfort level for the third month in a row.&nbsp;

Price pressures are expected to rise even more in the coming months, according to economists.

The highlights of the Governor of the Reserve Bank of India's speech are listed below:&nbsp;

<ol>
	<li>From May 21, the Cash Reserve Ratio will be increased by 50 basis points to 4.5 per cent. 
	&nbsp;</li>
	<li>Inflation must be controlled in order for the Indian economy to remain stable, according to RBI Governor Shaktikanta Das. He went on to say that measures to keep prices stable will aid financial and macroeconomic stability. 
	&nbsp;</li>
	<li>The threat of input cost pressure is fueling a new round of pricing hikes. He emphasised that price increases will have an impact on inflation. 
	&nbsp;</li>
	<li>Nine out of the 12 food subgroups registered an increase in inflation in the month of March. High-frequency price indicators for April indicate the persistence of food price pressures. 
	 
	&nbsp;</li>
</ol>

&nbsp;

In an unexpected move, RBI Governor Shaktikanta Das announced on Wednesday that the Monetary Policy Committee (MPC) unanimously voted to raise the policy repo rate by 40 basis points (bps) to 4.

In an unexpected move, RBI Governor Shaktikanta Das announced on Wednesday that the Monetary Policy Committee (MPC) unanimously voted to raise the policy repo rate by 40 basis points (bps) to 4.40 percent with immediate effect, citing persistent inflationary pressures in the economy. The RBI has raised borrowing rates for the first time since August 2018. The MPC has also opted to remain accommodative while focusing on withdrawal, implying a reversal of the rate action in 2020, which saw 75 basis points slashed after the world economy was thrown into disarray following the COVID-19 epidemic. Explaining the decision, he said, "MPC decided to hold an off-cycle meeting to reassess the inflation-growth dynamics. There is a collateral risk of inflated inflation for a long time. " Persistent inflation pressures are becoming more acute, Governor Shaktikanta Das said in an online briefing, adding that there is a risk that prices stay at this level for "too long" and expectations become unanchored. The bank’s next scheduled rate decision isn’t until June 8. As inflation rose, the RBI became more hawkish in its April policy, shifting its focus from growth to inflation. In March, headline inflation was 6.95 per cent, exceeding the Reserve Bank of India's 6 per cent comfort level for the third month in a row. Price pressures are expected to rise even more in the coming months, according to economists. The highlights of the Governor of the Reserve Bank of India's speech are listed below: From May 21, the Cash Reserve Ratio will be increased by 50 basis points to 4.5 per cent. Inflation must be controlled in order for the Indian economy to remain stable, according to RBI Governor Shaktikanta Das. He went on to say that measures to keep prices stable will aid financial and macroeconomic stability. The threat of input cost pressure is fueling a new round of pricing hikes. He emphasised that price increases will have an impact on inflation. Nine out of the 12 food subgroups registered an increase in inflation in the month of March. High-frequency price indicators for April indicate the persistence of food price pressures.

RBI hikes rates by 40 basis points with immediate effect: Governor Shaktikanta Das

Share price of Paytm`s parent company, One 97 Communications Ltd, slumped by around 13 per cent to hit an all-time low on Monday after the Reserve Bank of India (RBI) barred Paytm Payments Bank from onboarding new customers.

At the BSE, One 97 Communications Ltd share closed 12.84 per cent down at Rs 675.35. The scrip slipped to a low of Rs 662.25 in the intra-day. This is the lowest ever price of One 97 Communications Ltd.

The share price of One 97 Communications Ltd tumbled after the RBI imposed restrictions on Paytm Payments Bank and asked it to appoint an IT audit firm to conduct a comprehensive system audit of its IT system.

Also read |&nbsp;<a href="https://www.wionews.com/india-news/paytm-ceo-arrested-for-rash-driving-later-released-on-bail-461828">Paytm CEO arrested for rash driving, later released on bail</a>

"Reserve Bank of India has today, in the exercise of its powers, inter alia, under section 35A of the Banking Regulation Act, 1949, directed Paytm Payments Bank Ltd to stop, with immediate effect, onboarding of new customers," the RBI had said on Friday.

"The bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system. Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing report of the IT auditors," RBI said.

Also read |&nbsp;<a href="https://www.wionews.com/india-news/government-plans-to-publicise-its-social-welfare-schemes-and-its-benefits-461916">Government plans to publicise its social welfare schemes and its benefits</a>

In its reply to the RBI's action, One 97 Communications Ltd said, "The bank (Paytm Payments Bank) is taking immediate steps to comply with RBI directions, including the appointment of a reputed external auditor to conduct a comprehensive System Audit of its IT systems. PPBL remains committed to working with the regulator to address their concerns as quickly as possible."

"The Company has been informed that this does not impact any existing customers of PPBL, who can continue to use all banking and payment services without interruption. All existing users of Paytm UPI, Paytm Wallet, Paytm FASTag, and bank accounts can continue to use these instruments, including debit cards and net banking, for payments," Paytm's parent firm said.

Share price of Paytm`s parent company, One 97 Communications Ltd, slumped by around 13 per cent to hit an all-time low on Monday after the Reserve Bank of India (RBI) barred Paytm Payments Bank from onboarding new customers.

Share price of Paytm`s parent company, One 97 Communications Ltd, slumped by around 13 per cent to hit an all-time low on Monday after the Reserve Bank of India (RBI) barred Paytm Payments Bank from onboarding new customers. At the BSE, One 97 Communications Ltd share closed 12.84 per cent down at Rs 675.35. The scrip slipped to a low of Rs 662.25 in the intra-day. This is the lowest ever price of One 97 Communications Ltd. The share price of One 97 Communications Ltd tumbled after the RBI imposed restrictions on Paytm Payments Bank and asked it to appoint an IT audit firm to conduct a comprehensive system audit of its IT system. Also read | Paytm CEO arrested for rash driving, later released on bail "Reserve Bank of India has today, in the exercise of its powers, inter alia, under section 35A of the Banking Regulation Act, 1949, directed Paytm Payments Bank Ltd to stop, with immediate effect, onboarding of new customers," the RBI had said on Friday. "The bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system. Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing report of the IT auditors," RBI said. Also read | Government plans to publicise its social welfare schemes and its benefits In its reply to the RBI's action, One 97 Communications Ltd said, "The bank (Paytm Payments Bank) is taking immediate steps to comply with RBI directions, including the appointment of a reputed external auditor to conduct a comprehensive System Audit of its IT systems. PPBL remains committed to working with the regulator to address their concerns as quickly as possible." "The Company has been informed that this does not impact any existing customers of PPBL, who can continue to use all banking and payment services without interruption. All existing users of Paytm UPI, Paytm Wallet, Paytm FASTag, and bank accounts can continue to use these instruments, including debit cards and net banking, for payments," Paytm's parent firm said.

Paytm shares slump 13 per cent after RBI's restrictions on payments bank

The deputy governor of the Reserve Bank of India (RBI) has equated cryptocurrencies with Ponzi schemes. In a speech, T Rabi Shankar, the Deputy Governor even opined that 'banning' cryptocurrencies was the most sensible option for India.&nbsp;

"We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to Ponzi schemes, and may be even be worse," T. Rabi Sankar said.

"All these factors lead to the conclusion that banning cryptocurrency is perhaps the most advisable choice open to India."

India's central bank chief last week delivered a stark warning against investing in cryptocurrencies, saying they lacked the underlying value of even a tulip - in a reference to a speculative bubble that gripped the Netherlands in the 17th century.

Indian Finance Minister Nirmala Sitharaman, earlier this month, presented Union Budget 2022. In this year's budget, the Indian government has announced its decision of taxing gains from cryptocurrency investments at a steep rate of 30 per cent. However, full legality of cryptocurrencies that are not issued by the government is still in question.

India is also going to launch digital rupee. Sitharaman said on Monday that discussions with regard to central bank-backed digital currency have been going on with the Reserve Bank and a decision will be taken after due deliberations.

She said the discussions with the RBI regarding the CBDC (Central Bank Digital Currency) were going on prior to the Budget announcement, and they are continuing.

RBI Governor Shaktikanta Das added that like several other issues, this particular issue is internally under discussion between the RBI and the government.

"Whatever points we have we discuss with the government," he added.

CBDC is a digital or virtual currency but it is not comparable to the private virtual currencies or cryptocurrency that have mushroomed over the last decade. Private virtual currencies do not represent any person's debt or liabilities as there is no issuer. They are not money and certainly not currency.

(With inputs from agencies)

The deputy governor of the Reserve Bank of India (RBI) has equated cryptocurrencies with Ponzi schemes. In a speech, T Rabi Shankar, the Deputy Governor even opined that 'banning' cryptocurrencies was the most sensible option for India.

The deputy governor of the Reserve Bank of India (RBI) has equated cryptocurrencies with Ponzi schemes. In a speech, T Rabi Shankar, the Deputy Governor even opined that 'banning' cryptocurrencies was the most sensible option for India. "We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to Ponzi schemes, and may be even be worse," T. Rabi Sankar said. "All these factors lead to the conclusion that banning cryptocurrency is perhaps the most advisable choice open to India." India's central bank chief last week delivered a stark warning against investing in cryptocurrencies, saying they lacked the underlying value of even a tulip - in a reference to a speculative bubble that gripped the Netherlands in the 17th century. Indian Finance Minister Nirmala Sitharaman, earlier this month, presented Union Budget 2022. In this year's budget, the Indian government has announced its decision of taxing gains from cryptocurrency investments at a steep rate of 30 per cent. However, full legality of cryptocurrencies that are not issued by the government is still in question. India is also going to launch digital rupee. Sitharaman said on Monday that discussions with regard to central bank-backed digital currency have been going on with the Reserve Bank and a decision will be taken after due deliberations. She said the discussions with the RBI regarding the CBDC (Central Bank Digital Currency) were going on prior to the Budget announcement, and they are continuing. RBI Governor Shaktikanta Das added that like several other issues, this particular issue is internally under discussion between the RBI and the government. "Whatever points we have we discuss with the government," he added. CBDC is a digital or virtual currency but it is not comparable to the private virtual currencies or cryptocurrency that have mushroomed over the last decade. Private virtual currencies do not represent any person's debt or liabilities as there is no issuer. They are not money and certainly not currency. (With inputs from agencies)

Reserve Bank of India deputy governor equates crypto with Ponzi schemes

The Reserve Bank of India`s monetary policy committee (MPC) stuck to its accommodative policy stance to help the economy recover from the pits of the pandemic, keeping the key lending rate at record lows on Thursday.

As expected, the MPC held the lending rate, or the repo rate, at 4 per cent. The RBI, however, surprised some economists by also leaving the reverse repo rate, the key borrowing rate, unchanged at 3.35 per cent.

The MPC voted unanimously to maintain the status quo on the repo rate and by a majority of 5-1 to retain the accommodative policy stance.

Continued policy support was warranted for a durable and broadbased recovery, RBI governor Shaktikanta Das said, noting an improving inflation outlook, prospects for economic growth and uncertainties posed by the fast-spreading Omicron variant of COVID-19, and the global economy.

"Private consumption, the mainstay of domestic demand, continues to trail its pre-pandemic level. The persistent increase in international commodity prices, surge in volatility of global financial markets and global supply bottlenecks can exacerbate risks to the outlook," he said in his policy address.

"Overall, there is some loss of the momentum of near-term growth while global factors are turning adverse. Looking ahead, domestic growth drivers are gradually improving."

India`s 10-year benchmark bond yield fell 8 basis points to 6.72 per cent by 0610 GMT, in reaction to the policy, while the rupee weakened just slightly to 74.91 per dollar.

The NSE Nifty 50 index rose 0.84 per cent to 17,610.20, while the S&amp;P BSE Sensex was up 0.83 per cent at 58,953.65.

Retail inflation accelerated to a five-month high of 5.59 per cent&nbsp;in December from a year earlier, while wholesale price-based inflation, a proxy for producer prices, eased marginally to 13.56 per cent, but remained in double-digits for nine straight months.

Rising oil prices pose a major upside risk to inflation but it should peak in the current quarter and then moderate closer towards the 4 per cent&nbsp;target in H2 of 2022/23 providing room for monetary policy to stay accommodative, Das said.

Real GDP growth is projected at 7.8 per cent in 2022/23 compared to expected growth of 9.2 per cent this year, he added.

"The somewhat comfortable inflation trajectory provides RBI space to withdraw monetary support only gradually and reduces the need of any sudden tightening actions," said Sakshi Gupta, senior economist at HDFC bank in Gurugram.

"We expect the RBI to support growth and raise the repo rate only by the August policy once there are greater signs of a more even recovery."

The central bank has slashed the repo rate by a total of 115 basis points (bps) since March 2020 to soften the blow from the coronavirus pandemic and tough containment measures. The rate is now 250 bps below its level at the beginning of 2019, when the easing cycle began. 
&nbsp;

The Reserve Bank of India`s monetary policy committee (MPC) stuck to its accommodative policy stance to help the economy recover from the pits of the pandemic, keeping the key lending rate at record lows on Thursday.

The Reserve Bank of India`s monetary policy committee (MPC) stuck to its accommodative policy stance to help the economy recover from the pits of the pandemic, keeping the key lending rate at record lows on Thursday. As expected, the MPC held the lending rate, or the repo rate, at 4 per cent. The RBI, however, surprised some economists by also leaving the reverse repo rate, the key borrowing rate, unchanged at 3.35 per cent. The MPC voted unanimously to maintain the status quo on the repo rate and by a majority of 5-1 to retain the accommodative policy stance. Continued policy support was warranted for a durable and broadbased recovery, RBI governor Shaktikanta Das said, noting an improving inflation outlook, prospects for economic growth and uncertainties posed by the fast-spreading Omicron variant of COVID-19, and the global economy. "Private consumption, the mainstay of domestic demand, continues to trail its pre-pandemic level. The persistent increase in international commodity prices, surge in volatility of global financial markets and global supply bottlenecks can exacerbate risks to the outlook," he said in his policy address. "Overall, there is some loss of the momentum of near-term growth while global factors are turning adverse. Looking ahead, domestic growth drivers are gradually improving." India`s 10-year benchmark bond yield fell 8 basis points to 6.72 per cent by 0610 GMT, in reaction to the policy, while the rupee weakened just slightly to 74.91 per dollar. The NSE Nifty 50 index rose 0.84 per cent to 17,610.20, while the S&P BSE Sensex was up 0.83 per cent at 58,953.65. Retail inflation accelerated to a five-month high of 5.59 per cent in December from a year earlier, while wholesale price-based inflation, a proxy for producer prices, eased marginally to 13.56 per cent, but remained in double-digits for nine straight months. Rising oil prices pose a major upside risk to inflation but it should peak in the current quarter and then moderate closer towards the 4 per cent target in H2 of 2022/23 providing room for monetary policy to stay accommodative, Das said. Real GDP growth is projected at 7.8 per cent in 2022/23 compared to expected growth of 9.2 per cent this year, he added. "The somewhat comfortable inflation trajectory provides RBI space to withdraw monetary support only gradually and reduces the need of any sudden tightening actions," said Sakshi Gupta, senior economist at HDFC bank in Gurugram. "We expect the RBI to support growth and raise the repo rate only by the August policy once there are greater signs of a more even recovery." The central bank has slashed the repo rate by a total of 115 basis points (bps) since March 2020 to soften the blow from the coronavirus pandemic and tough containment measures. The rate is now 250 bps below its level at the beginning of 2019, when the easing cycle began.

Post-Budget, RBI keeps lending rate unchanged

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%

During the budget session, Finance Minister Nirmala Sitharaman said that the Reserve Bank of India would begin issuing Digital Rupees, also known as Central bank Digital Currency, in 2022-23, giving a boost to India’s economy. The concept of “Central Bank Digital Currencies” (CBDC) has been around for a while and has gained adoption with the rise of Bitcoin and countries like China issuing their own digital currency known as Digital Yuan to compete with the US Dollar on a global scale.

The notion of digital money has only been publicly explored by central banks, economists, and politicians in the past decade. CBDC is a digital or virtual currency, but it differs from the private virtual currencies that have proliferated in the recent decade.

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Private virtual currencies are diametrically opposed to the traditional understanding of money. They are neither physical commodities nor generally claims on commodities since they have no inherent value; some assertions that are similar to gold seem to be purely speculative. They usually do not reflect any person’s debt or obligation unless they qualify as security tokens under respective regulatory frameworks. &nbsp;

Although the benefits of global settlements may be realised if both nations in a currency transaction have CBDCs, the advantages of issuing a CBDC &nbsp;may be sufficient to warrant India issuing one. Cash remains the preferred mode of payment and for receiving money for regular expenses. According to a Reserve Bank’s pilot survey on individuals’ retail payment habits in six cities between December 2018 and January 2019, cash is most often used for small-value transactions averaging 37,000 INR.

Also Read | <a href="https://www.wionews.com/india-news/indian-union-budget-2022-digital-rupee-to-be-introduced-virtual-assets-to-be-taxed-at-30-449464">Indian Union Budget 2022: Digital rupee to be introduced, virtual assets to be taxed at 30% &nbsp;</a>

It is critical to understand that CBDCs may reduce transaction demand for bank deposits, depending on the degree to which they are used. Because transactions in CBDCs lower settlement risk, they also minimise transaction liquidity requirements such as intra-day liquidity. Furthermore, offering a truly risk-free alternative to bank savings may encourage a movement away from bank deposits, reducing the need for government deposit guarantees.

On the other hand, reduced bank disintermediation comes with its own set of institutional risks. If banks start losing deposits over time, their capacity to provide credit is hampered. Because central banks are unable to lend to the private sector, the influence on the function of bank lending must be carefully considered in the context of the Indian economy. Furthermore, when banks lose considerable amounts of low-cost transaction deposits, their interest margins may be strained, resulting in a rise in lending costs which may impact the Indian economy at large. As a result of the possible costs of disintermediation, it is critical to design and operate CBDC so that demand for CBDC is controllable compared to bank deposits.

The accessibility of CBDC makes it simple for depositors to withdraw funds if a bank is experiencing difficulties. Deposits may be made considerably more quickly than cash withdrawals. On the other hand, having CBDCs available may prevent panic “runs” since depositors know they may withdraw quickly. One outcome might be that banks are driven to keep a higher level of liquidity, resulting in poorer profits for commercial banks with reduced lending capacity.

Understanding the Digital Rupee and the Indian Monetary Policy 
&nbsp; 
CBDCs have the potential to affect the behaviour of the general public and the Indian economy at large. If demand for CBDCs exceeds supply and CBDCs are primarily issued via the banking system, as is expected, additional liquidity may be required to compensate for currency leakage from the banking system.

For this specific reason, much recent debate has focused on using negative interest-bearing CBDCs for monetary policy efficacy because negative interest rates are ineffective due to the transition to cash. Many advanced countries have been limited in their capacity to cut interest rates due to the exceptionally low inflationary economy. If money can carry a negative interest rate, the monetary transmission of negative policy rates to increase demand would be more successful. As a result, the case for paying a negative interest rate on CBDC as an unorthodox monetary policy instrument to encourage consumption is made. Any instrument that pays interest positive or negative is technically not a currency; hence such measures should be handled with caution as they may impact the Indian banking system. Interest-bearing CBDCs can impact the attractiveness of fixed deposits held by banking, negatively impacting Indian banks’ lending capacity.

Understanding Digital Rupee and its Technology Risk

Digital Rupee’s technical ecosystem may be vulnerable to cyber-attacks in the same way that present payment systems are. Furthermore, the rise in digital payment-related scams may expand to Digital Rupee in areas with lower financial literacy levels. As a result, institutions dealing with Digital Rupee must ensure strong cybersecurity standards while also focusing on financial literacy.

The economy’s ability to absorb Digital Rupee is partly dependent on technological readiness. The development of a population-scale digital currency system depends on the advancement of high-speed internet and telecommunication networks and the availability of adequate technology for storing and transacting in Digital Rupee with the general public. Lower levels of technology adoption in underdeveloped areas in India may restrict the reach of the Digital Rupee and exacerbate existing inequities in access to financial goods and services.

User Privacy and CBDC: The trade-off for Indian Citizens

The condition in which an individual’s information is known exclusively to the person and is not shared with anybody else without the individual’s agreement is known as privacy. The data is supposed to be kept private when it comes to financial transactions and it is critical to understand privacy from a CBDC perspective:

1. Individual identity

This contains personal information like a person’s name, address, a unique identifier like Adhaar card, a Driving License, PAN Card, passport number, and so forth.

2. Transaction History of Individuals

This comprises details about all financial transactions and history. The financial privacy of Indian citizens is critical as it is sensitive personal data that needs to be protected. Further, it overlaps with Personal Data Protection law, making it essential that the Indian CBDC architecture has enough safeguards to protect sensitive data for national security purposes.

3. Data about the transaction’s metadata

The information linked with a transaction might take many different forms depending on the kind of transaction. For example, the time of the transaction, the name of the transactors, the specifications of the products transferred within the transaction, the transactors’ location, and so on may all be found in the metadata of a credit-card transaction.

The preceding definition of privacy is significant because, with a technology-based CBDC implementation, the Central Bank’s and, by implication, other governmental agencies access to the aforementioned fields will be considerably more complicated than it is now. The government may carefully monitor the public by tying an individual’s financial information to their identity, which is a trade-off that Indian citizens would have to adapt to in the long run and forgo individual financial privacy.

Aside from the definition mentioned above of privacy, this article posits that a CBDC implementation may result in the entire abolition of fiat money in the long run, posing the Privacy conundrum. CBDC, unlike regular banknotes, allows payment devices to collect different information and data associated with payments and transactions. By using technology such as blockchain, the privacy concerns of the data-driven CBDC might be alleviated. On the other hand, many people believe that establishing CBDC would provide the law department with additional options for dealing with money laundering and tax evasion. For example, one of the benefits of the newly released Chinese CBDC is the avoidance of tax evasion. This may help the Indian economy as it may increase tax collection at the cost of individual financial privacy.

Decoding the Indian Legal Framework for CBDC

Although CBDCs are essentially identical to banknotes, their adoption would need the creation of an appropriate legal framework since present legal rules are written with paper money in mind. The Reserve Bank of India is authorised by the Reserve Bank of India Act, 1934, to “...control the issuing of banknotes and the holding of reserves with a view to maintaining monetary stability in India and generally to manage the country’s currency and credit system to its benefit” as stated in the preamble of the act. Various provisions of the RBI Act provide the Reserve Bank with the appropriate legislative authorities, such as those relating to denomination under Section 24, banknote shape under Section 25, legal tender status under Section 26(1), etc. Other Acts, such as the Coinage Act of 2011, the FEMA Act of 1999, and the Information Technology Act of 2000, may need substantial revisions. Even though CBDCs will be largely a technology-driven product, making the law technology-neutral to encompass a wide range of technological options will be preferable.

Conclusion

Digital Rupee’s implementation has the potential to deliver major advantages, such as less reliance on cash, increased seigniorage owing to lower transaction costs, and reduced settlement risk. CBDC might lead to a more reliable, efficient, trustworthy, regulated, and legal tender-based payment solution. There are risks involved, to be sure, but they must be carefully weighed against the possible advantages. 
&nbsp; 
In the future, CBDCs are expected to be a part of any central bank’s armoury. Setting this up will need careful calibration and a sophisticated execution strategy. Stakeholder interactions and considerations on the drawing board are critical for designing a CBDC with a net positive impact with minimum technology risk. The relevance of technical difficulties when developing CBDC cannot be overstated as it will impact national economies and monetary policy.&nbsp;

(Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.)

During the budget session, Finance Minister Nirmala Sitharaman said that the Reserve Bank of India would begin issuing Digital Rupees, also known as Central bank Digital Currency, in 2022-23, giving a boost to India’s economy.

During the budget session, Finance Minister Nirmala Sitharaman said that the Reserve Bank of India would begin issuing Digital Rupees, also known as Central bank Digital Currency, in 2022-23, giving a boost to India’s economy. The concept of “Central Bank Digital Currencies” (CBDC) has been around for a while and has gained adoption with the rise of Bitcoin and countries like China issuing their own digital currency known as Digital Yuan to compete with the US Dollar on a global scale. The notion of digital money has only been publicly explored by central banks, economists, and politicians in the past decade. CBDC is a digital or virtual currency, but it differs from the private virtual currencies that have proliferated in the recent decade. × Private virtual currencies are diametrically opposed to the traditional understanding of money. They are neither physical commodities nor generally claims on commodities since they have no inherent value; some assertions that are similar to gold seem to be purely speculative. They usually do not reflect any person’s debt or obligation unless they qualify as security tokens under respective regulatory frameworks. Although the benefits of global settlements may be realised if both nations in a currency transaction have CBDCs, the advantages of issuing a CBDC may be sufficient to warrant India issuing one. Cash remains the preferred mode of payment and for receiving money for regular expenses. According to a Reserve Bank’s pilot survey on individuals’ retail payment habits in six cities between December 2018 and January 2019, cash is most often used for small-value transactions averaging 37,000 INR. Also Read | Indian Union Budget 2022: Digital rupee to be introduced, virtual assets to be taxed at 30% It is critical to understand that CBDCs may reduce transaction demand for bank deposits, depending on the degree to which they are used. Because transactions in CBDCs lower settlement risk, they also minimise transaction liquidity requirements such as intra-day liquidity. Furthermore, offering a truly risk-free alternative to bank savings may encourage a movement away from bank deposits, reducing the need for government deposit guarantees. On the other hand, reduced bank disintermediation comes with its own set of institutional risks. If banks start losing deposits over time, their capacity to provide credit is hampered. Because central banks are unable to lend to the private sector, the influence on the function of bank lending must be carefully considered in the context of the Indian economy. Furthermore, when banks lose considerable amounts of low-cost transaction deposits, their interest margins may be strained, resulting in a rise in lending costs which may impact the Indian economy at large. As a result of the possible costs of disintermediation, it is critical to design and operate CBDC so that demand for CBDC is controllable compared to bank deposits. The accessibility of CBDC makes it simple for depositors to withdraw funds if a bank is experiencing difficulties. Deposits may be made considerably more quickly than cash withdrawals. On the other hand, having CBDCs available may prevent panic “runs” since depositors know they may withdraw quickly. One outcome might be that banks are driven to keep a higher level of liquidity, resulting in poorer profits for commercial banks with reduced lending capacity. Understanding the Digital Rupee and the Indian Monetary Policy CBDCs have the potential to affect the behaviour of the general public and the Indian economy at large. If demand for CBDCs exceeds supply and CBDCs are primarily issued via the banking system, as is expected, additional liquidity may be required to compensate for currency leakage from the banking system. For this specific reason, much recent debate has focused on using negative interest-bearing CBDCs for monetary policy efficacy because negative interest rates are ineffective due to the transition to cash. Many advanced countries have been limited in their capacity to cut interest rates due to the exceptionally low inflationary economy. If money can carry a negative interest rate, the monetary transmission of negative policy rates to increase demand would be more successful. As a result, the case for paying a negative interest rate on CBDC as an unorthodox monetary policy instrument to encourage consumption is made. Any instrument that pays interest positive or negative is technically not a currency; hence such measures should be handled with caution as they may impact the Indian banking system. Interest-bearing CBDCs can impact the attractiveness of fixed deposits held by banking, negatively impacting Indian banks’ lending capacity. Understanding Digital Rupee and its Technology Risk Digital Rupee’s technical ecosystem may be vulnerable to cyber-attacks in the same way that present payment systems are. Furthermore, the rise in digital payment-related scams may expand to Digital Rupee in areas with lower financial literacy levels. As a result, institutions dealing with Digital Rupee must ensure strong cybersecurity standards while also focusing on financial literacy. The economy’s ability to absorb Digital Rupee is partly dependent on technological readiness. The development of a population-scale digital currency system depends on the advancement of high-speed internet and telecommunication networks and the availability of adequate technology for storing and transacting in Digital Rupee with the general public. Lower levels of technology adoption in underdeveloped areas in India may restrict the reach of the Digital Rupee and exacerbate existing inequities in access to financial goods and services. User Privacy and CBDC: The trade-off for Indian Citizens The condition in which an individual’s information is known exclusively to the person and is not shared with anybody else without the individual’s agreement is known as privacy. The data is supposed to be kept private when it comes to financial transactions and it is critical to understand privacy from a CBDC perspective: 1. Individual identity This contains personal information like a person’s name, address, a unique identifier like Adhaar card, a Driving License, PAN Card, passport number, and so forth. 2. Transaction History of Individuals This comprises details about all financial transactions and history. The financial privacy of Indian citizens is critical as it is sensitive personal data that needs to be protected. Further, it overlaps with Personal Data Protection law, making it essential that the Indian CBDC architecture has enough safeguards to protect sensitive data for national security purposes. 3. Data about the transaction’s metadata The information linked with a transaction might take many different forms depending on the kind of transaction. For example, the time of the transaction, the name of the transactors, the specifications of the products transferred within the transaction, the transactors’ location, and so on may all be found in the metadata of a credit-card transaction. The preceding definition of privacy is significant because, with a technology-based CBDC implementation, the Central Bank’s and, by implication, other governmental agencies access to the aforementioned fields will be considerably more complicated than it is now. The government may carefully monitor the public by tying an individual’s financial information to their identity, which is a trade-off that Indian citizens would have to adapt to in the long run and forgo individual financial privacy. Aside from the definition mentioned above of privacy, this article posits that a CBDC implementation may result in the entire abolition of fiat money in the long run, posing the Privacy conundrum. CBDC, unlike regular banknotes, allows payment devices to collect different information and data associated with payments and transactions. By using technology such as blockchain, the privacy concerns of the data-driven CBDC might be alleviated. On the other hand, many people believe that establishing CBDC would provide the law department with additional options for dealing with money laundering and tax evasion. For example, one of the benefits of the newly released Chinese CBDC is the avoidance of tax evasion. This may help the Indian economy as it may increase tax collection at the cost of individual financial privacy. Decoding the Indian Legal Framework for CBDC Although CBDCs are essentially identical to banknotes, their adoption would need the creation of an appropriate legal framework since present legal rules are written with paper money in mind. The Reserve Bank of India is authorised by the Reserve Bank of India Act, 1934, to “...control the issuing of banknotes and the holding of reserves with a view to maintaining monetary stability in India and generally to manage the country’s currency and credit system to its benefit” as stated in the preamble of the act. Various provisions of the RBI Act provide the Reserve Bank with the appropriate legislative authorities, such as those relating to denomination under Section 24, banknote shape under Section 25, legal tender status under Section 26(1), etc. Other Acts, such as the Coinage Act of 2011, the FEMA Act of 1999, and the Information Technology Act of 2000, may need substantial revisions. Even though CBDCs will be largely a technology-driven product, making the law technology-neutral to encompass a wide range of technological options will be preferable. Conclusion Digital Rupee’s implementation has the potential to deliver major advantages, such as less reliance on cash, increased seigniorage owing to lower transaction costs, and reduced settlement risk. CBDC might lead to a more reliable, efficient, trustworthy, regulated, and legal tender-based payment solution. There are risks involved, to be sure, but they must be carefully weighed against the possible advantages. In the future, CBDCs are expected to be a part of any central bank’s armoury. Setting this up will need careful calibration and a sophisticated execution strategy. Stakeholder interactions and considerations on the drawing board are critical for designing a CBDC with a net positive impact with minimum technology risk. The relevance of technical difficulties when developing CBDC cannot be overstated as it will impact national economies and monetary policy. (Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.)

Decoding how RBI’s Digital Rupee will impact the Indian economy

In Indian Union Budget 2022 speech, Finance Minister Nirmala Sitharaman said that India will develop and launch a digital currency. The central bank of the country, Reserve Bank of India, will come up with it by 2023. It will be based on blockchain technology. It will bring clarity to the cryptocurrency world.

India's RBI to launch digital currency

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

India and Singapore will link their respective fast payment systems -- Unified Payments Interface (UPI) and PayNow -- to enable users to make instant, low-cost fund transfers on a reciprocal basis, the Reserve Bank said on Tuesday.

The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) announced the project to link the fast payment systems. The linkage is targeted for operationalisation by July 2022, the RBI said in a statement.

"The UPI-PayNow linkage will enable users of each of the two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis without a need to get onboarded onto the other payment system," it said.

RBI said the UPI-PayNow linkage is a significant milestone in the development of infrastructure for cross-border payments between India and Singapore, and closely aligns with the G20''s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.

The linkage builds upon the earlier efforts of NPCI International Private Limited (NIPL) and Network for Electronic Transfers (NETS) to foster cross-border interoperability of payments using cards and QR codes, between India and Singapore.

It will further anchor trade, travel and remittance flows between the two countries.

This initiative is also in line with RBI''s vision of reviewing corridors and charges for inbound cross-border remittances outlined in the Payment Systems Vision Document 2019-21.

It is to be mentioned here that UPI is a mobile-based fast payment system that facilitates customers to make round the clock payments instantly using a Virtual Payment Address (VPA) created by the customer.

This eliminates the risk of sharing bank account details by the remitter. UPI supports both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments and enables a user to send or receive money.

PayNow is the fast payment system of Singapore which enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in Singapore.

It enables users to send and receive instant funds from one bank or e-wallet account to another in Singapore by using just their mobile number, Singapore NRIC/FIN, or VPA.

India and Singapore will link their respective fast payment systems -- Unified Payments Interface (UPI) and PayNow -- to enable users to make instant, low-cost fund transfers on a reciprocal basis, the Reserve Bank said on Tuesday.

India and Singapore will link their respective fast payment systems -- Unified Payments Interface (UPI) and PayNow -- to enable users to make instant, low-cost fund transfers on a reciprocal basis, the Reserve Bank said on Tuesday. The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) announced the project to link the fast payment systems. The linkage is targeted for operationalisation by July 2022, the RBI said in a statement. "The UPI-PayNow linkage will enable users of each of the two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis without a need to get onboarded onto the other payment system," it said. RBI said the UPI-PayNow linkage is a significant milestone in the development of infrastructure for cross-border payments between India and Singapore, and closely aligns with the G20''s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments. The linkage builds upon the earlier efforts of NPCI International Private Limited (NIPL) and Network for Electronic Transfers (NETS) to foster cross-border interoperability of payments using cards and QR codes, between India and Singapore. It will further anchor trade, travel and remittance flows between the two countries. This initiative is also in line with RBI''s vision of reviewing corridors and charges for inbound cross-border remittances outlined in the Payment Systems Vision Document 2019-21. It is to be mentioned here that UPI is a mobile-based fast payment system that facilitates customers to make round the clock payments instantly using a Virtual Payment Address (VPA) created by the customer. This eliminates the risk of sharing bank account details by the remitter. UPI supports both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments and enables a user to send or receive money. PayNow is the fast payment system of Singapore which enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in Singapore. It enables users to send and receive instant funds from one bank or e-wallet account to another in Singapore by using just their mobile number, Singapore NRIC/FIN, or VPA.

India, Singapore launch project to link payment systems for instant fund transfers

Concerned over the inconvenience caused to the public due to the non-availability of cash in ATMs, the Reserve Bank has decided to penalise banks for failure to timely replenish currency notes in such machines.

The RBI will start imposing a penalty on banks in case the ATMs remain out-of-cash for a total period of 10 hours in a month from October 1, 2021, onwards.

“The Scheme of Penalty for non-replenishment of ATMs has been formulated to ensure that sufficient cash is available to the public through ATMs,” the RBI said in a circular.

The Reserve Bank of India has a mandate to issue banknotes and the banks are fulfilling this mandate by dispensing banknotes to the public through their wide network of branches and ATMs.

In this connection, it said a review of downtime of ATMs due to cash-outs was undertaken and it was observed that ATM operations affected by cash-outs lead to non-availability of cash and cause avoidable inconvenience to the members of the public.

It has, therefore, been decided that the banks/ White Label ATM Operators (WLAOs) will strengthen their systems/ mechanisms to monitor the availability of cash in ATMs and ensure timely replenishment to avoid cash-outs, central bank said.

“Any non-compliance in this regard shall be viewed seriously and shall attract monetary penalty as stipulated in the ‘Scheme of Penalty for non-replenishment of ATMs’,” the RBI said.

The Scheme will be effective from October 01, 2021.

On condition for counting instances of cash-outs in an ATM, the RBI said it would come into play “when the customer is not able to withdraw cash due to non-availability of cash in a particular ATM”.

As regards the quantum of penalty, the central bank said “cash-out at any ATM of more than ten hours in a month” will attract a flat penalty of Rs 10,000 per ATM.

In the case of White Label ATMs (WLAs), the penalty would be charged to the bank, which is meeting the cash requirement of that particular WLA.

The bank, may, at its discretion, recover the penalty from the WLA operator, it added.

At the end-June 2021, there were 2,13,766 ATMs of different banks in the country.

Concerned over the inconvenience caused to the public due to the non-availability of cash in ATMs, the Reserve Bank has decided to penalise banks for failure to timely replenish currency notes in such machines.

Concerned over the inconvenience caused to the public due to the non-availability of cash in ATMs, the Reserve Bank has decided to penalise banks for failure to timely replenish currency notes in such machines. The RBI will start imposing a penalty on banks in case the ATMs remain out-of-cash for a total period of 10 hours in a month from October 1, 2021, onwards. “The Scheme of Penalty for non-replenishment of ATMs has been formulated to ensure that sufficient cash is available to the public through ATMs,” the RBI said in a circular. The Reserve Bank of India has a mandate to issue banknotes and the banks are fulfilling this mandate by dispensing banknotes to the public through their wide network of branches and ATMs. In this connection, it said a review of downtime of ATMs due to cash-outs was undertaken and it was observed that ATM operations affected by cash-outs lead to non-availability of cash and cause avoidable inconvenience to the members of the public. It has, therefore, been decided that the banks/ White Label ATM Operators (WLAOs) will strengthen their systems/ mechanisms to monitor the availability of cash in ATMs and ensure timely replenishment to avoid cash-outs, central bank said. “Any non-compliance in this regard shall be viewed seriously and shall attract monetary penalty as stipulated in the ‘Scheme of Penalty for non-replenishment of ATMs’,” the RBI said. The Scheme will be effective from October 01, 2021. On condition for counting instances of cash-outs in an ATM, the RBI said it would come into play “when the customer is not able to withdraw cash due to non-availability of cash in a particular ATM”. As regards the quantum of penalty, the central bank said “cash-out at any ATM of more than ten hours in a month” will attract a flat penalty of Rs 10,000 per ATM. In the case of White Label ATMs (WLAs), the penalty would be charged to the bank, which is meeting the cash requirement of that particular WLA. The bank, may, at its discretion, recover the penalty from the WLA operator, it added. At the end-June 2021, there were 2,13,766 ATMs of different banks in the country.

RBI to penalise banks for non-availability of cash in ATMs from October 1

The Reserve Bank of India (RBI) barred Mastercard from acquiring new customers starting July 22. The payments operator has been barred from adding domestic customers across three categories of cards – debit, credit as well as prepaid.

World Business Watch: RBI bars Mastercard from adding new clients in India from July 22

India's economy has not moderated to the extent it did during the first wave but uncertainties can act as a deterrent in the short term, the Reserve Bank of India said on Thursday. 
 
In its annual report, the central bank said the country`s growth prospects now essentially depend on how fast India can arrest the second wave of COVID-19 infections. 
 
"The recovery of the economy from the COVID-19 will critically depend on the robust revival of private demand that may be led by the consumption in the short-run but will require acceleration of investment to sustain the recovery," the central bank said in its annual report. 
 
It also added that reform measures in various areas were likely to improve India`s growth potential on a sustainable basis.

India's economy has not moderated to the extent it did during the first wave but uncertainties can act as a deterrent in the short term, the Reserve Bank of India said on Thursday.

India's economy has not moderated to the extent it did during the first wave but uncertainties can act as a deterrent in the short term, the Reserve Bank of India said on Thursday. In its annual report, the central bank said the country`s growth prospects now essentially depend on how fast India can arrest the second wave of COVID-19 infections. "The recovery of the economy from the COVID-19 will critically depend on the robust revival of private demand that may be led by the consumption in the short-run but will require acceleration of investment to sustain the recovery," the central bank said in its annual report. It also added that reform measures in various areas were likely to improve India`s growth potential on a sustainable basis.

Indian economy not as hard hit as first wave but uncertainties remain, says RBI

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

Stating that "growth is of paramount importance now", India's Reserve Bank on Wednesday said it will do whatever it takes to sustain the fledgling recovery by ensuring ample and assured liquidity and cheaper funds to oil the wheels of the economy.

Announcing the first monetary policy of fiscal 2022, the central bank left the key policy rate unchanged at 4 per cent for the fifth time in a row, after the rash of rate cuts earlier last fiscal.

It also assured of an indefinitely long period of accommodative policy stance which was topped by a historic move to commit its own balance sheet to the market with a new liquidity tool called 'the secondary market government securities acquisition programme' or G-Sap, under which it will buy government bonds worth Rs 1 lakh crore this quarter.

Addressing the media online, RBI Governor Shaktikanta Das said "as of now growth is of paramount importance...and we'll do whatever it takes to help sustain the recovery."

But he was quick to add that "inflation targeting is also important."

 
"More importantly, the government reiterating the plus-minus 2 per cent of 4 per cent inflation targeting gives us enough policy space to support growth as there are more downside risks to growth on the horizon now than in recent past which make growth...of paramount importance," he added. 
The central bank chose to retain its last forecast of 10.5 per cent GDP growth this fiscal, saying it is "too early to revise its own forecast done two months ago as we have just entered the new fiscal year."

Asked why the thrust was on growth despite pencilling in an upward inflation trajectory (5.2 per cent for the first half and 4.4 per cent for the second), and offering an indefinite period of accommodative policy stance, Das said, "We'll continue to be accommodative till growth becomes sustainable and we will do whatever it takes to achieve that."

Das continued to explain that "inflation is already in a well-entrenched and well-anchored framework now and so is inflation expectation, that's also well-anchored. This is very clear from the fact that the government notification has reiterated the plus-minus 2 per cent of 4 per cent inflation targeting."

"This framework gives RBI enough leeway gives enough policy tools to manage any extraordinary situations like the current pandemic.

"For the time being and at the current juncture, growth is of paramount importance, while of course keeping in mind inflation targeting is also important. After all, the the primary goal of the monetary policy is to maintain a certain level of inflation," he said.

However, the governor was quick to admit that the inflation outlook is uncertain.

On when the RBI will begin to exit the low reverse repo regime, Das said "that's something only time can decide. All I can tell you now is that we are accommodative and will remain so till we feel it is needed. So, we will have to wait when we will exit reverse repo."

His deputy Michael D Patra chipped in saying whenever the reverse repo is in operation, the policy is accommodative, parrying a direct response to a query on the impact of such high liquidity infusion on inflation.

On whether the RBI is anticipating some shocks to the system, Patra said, "We are mindful of the liquidity situation. And we will be mindful of taking a balanced action."

"To begin with, for the first in history, RBI is committing its balance sheet to the monetary policy under which we are committing to the market that we will give you Rs 1 trillion each quarter (up to Rs 3 trillion this fiscal), whether you want it or not, and irrespective of the market movement we will give you that amount of liquidity through the G-Sap," he said.

He went on to explain that when the policy rates are left unchanged, other tools are required to run the policy.

Patra said the bond buying is "an upfront assurance and is similar to what other major central banks are doing in buying the best and most secure assets, that is G-secs -- the benchmark for the entire money market."

"We are not leaving anything to the market to guess on the quantum, the timing or the demand or anything else. And this is a commitment to fund it from the RBI balance sheet itself," Patra said.

On maintaining the GDP forecast at the previous level of 10.5 per cent (26.2 per cent in Q1, 8.3 per cent in Q2, 5.4 per cent in Q3 and 6.2 per cent in Q4), Das said, "It is too early to give a guidance especially now the pandemic situation has become more uncertain due to the recent surge in infections. Also, we are at the beginning of a the new fiscal year."

"But at the same time I would like to like to say that the current situation is unlikely to impact the economy so much as it did this time last year because lockdowns are very selective this time. Also, many establishments, manufacturing units and businesses are fully operational and are better prepared to face the challenges now. And so are the general public.

"Therefore, we've reiterated our 10.5 percent forecast as the situation prevails today; and I don't think there is any significant upside risks to this as of now. Vaccine is an additional factor on the table which was not there last year. Overall we are better prepared.

"So whatever guidance we've given so far looks reasonable. Going forward we will be watchful, Das noted.

Stating that "growth is of paramount importance now", India's Reserve Bank on Wednesday said it will do whatever it takes to sustain the fledgling recovery by ensuring ample and assured liquidity and cheaper funds to oil the wheels of the economy.

Stating that "growth is of paramount importance now", India's Reserve Bank on Wednesday said it will do whatever it takes to sustain the fledgling recovery by ensuring ample and assured liquidity and cheaper funds to oil the wheels of the economy. Announcing the first monetary policy of fiscal 2022, the central bank left the key policy rate unchanged at 4 per cent for the fifth time in a row, after the rash of rate cuts earlier last fiscal. It also assured of an indefinitely long period of accommodative policy stance which was topped by a historic move to commit its own balance sheet to the market with a new liquidity tool called 'the secondary market government securities acquisition programme' or G-Sap, under which it will buy government bonds worth Rs 1 lakh crore this quarter. Addressing the media online, RBI Governor Shaktikanta Das said "as of now growth is of paramount importance...and we'll do whatever it takes to help sustain the recovery." But he was quick to add that "inflation targeting is also important." "More importantly, the government reiterating the plus-minus 2 per cent of 4 per cent inflation targeting gives us enough policy space to support growth as there are more downside risks to growth on the horizon now than in recent past which make growth...of paramount importance," he added. The central bank chose to retain its last forecast of 10.5 per cent GDP growth this fiscal, saying it is "too early to revise its own forecast done two months ago as we have just entered the new fiscal year." Asked why the thrust was on growth despite pencilling in an upward inflation trajectory (5.2 per cent for the first half and 4.4 per cent for the second), and offering an indefinite period of accommodative policy stance, Das said, "We'll continue to be accommodative till growth becomes sustainable and we will do whatever it takes to achieve that." Das continued to explain that "inflation is already in a well-entrenched and well-anchored framework now and so is inflation expectation, that's also well-anchored. This is very clear from the fact that the government notification has reiterated the plus-minus 2 per cent of 4 per cent inflation targeting." "This framework gives RBI enough leeway gives enough policy tools to manage any extraordinary situations like the current pandemic. "For the time being and at the current juncture, growth is of paramount importance, while of course keeping in mind inflation targeting is also important. After all, the the primary goal of the monetary policy is to maintain a certain level of inflation," he said. However, the governor was quick to admit that the inflation outlook is uncertain. On when the RBI will begin to exit the low reverse repo regime, Das said "that's something only time can decide. All I can tell you now is that we are accommodative and will remain so till we feel it is needed. So, we will have to wait when we will exit reverse repo." His deputy Michael D Patra chipped in saying whenever the reverse repo is in operation, the policy is accommodative, parrying a direct response to a query on the impact of such high liquidity infusion on inflation. On whether the RBI is anticipating some shocks to the system, Patra said, "We are mindful of the liquidity situation. And we will be mindful of taking a balanced action." "To begin with, for the first in history, RBI is committing its balance sheet to the monetary policy under which we are committing to the market that we will give you Rs 1 trillion each quarter (up to Rs 3 trillion this fiscal), whether you want it or not, and irrespective of the market movement we will give you that amount of liquidity through the G-Sap," he said. He went on to explain that when the policy rates are left unchanged, other tools are required to run the policy. Patra said the bond buying is "an upfront assurance and is similar to what other major central banks are doing in buying the best and most secure assets, that is G-secs -- the benchmark for the entire money market." "We are not leaving anything to the market to guess on the quantum, the timing or the demand or anything else. And this is a commitment to fund it from the RBI balance sheet itself," Patra said. On maintaining the GDP forecast at the previous level of 10.5 per cent (26.2 per cent in Q1, 8.3 per cent in Q2, 5.4 per cent in Q3 and 6.2 per cent in Q4), Das said, "It is too early to give a guidance especially now the pandemic situation has become more uncertain due to the recent surge in infections. Also, we are at the beginning of a the new fiscal year." "But at the same time I would like to like to say that the current situation is unlikely to impact the economy so much as it did this time last year because lockdowns are very selective this time. Also, many establishments, manufacturing units and businesses are fully operational and are better prepared to face the challenges now. And so are the general public. "Therefore, we've reiterated our 10.5 percent forecast as the situation prevails today; and I don't think there is any significant upside risks to this as of now. Vaccine is an additional factor on the table which was not there last year. Overall we are better prepared. "So whatever guidance we've given so far looks reasonable. Going forward we will be watchful, Das noted.

Supporting growth paramount for RBI now: Governor Shaktikanta Das

The Reserve Bank Of India on Wednesday in its monetary policy for Financial Year of 2021-22 kept Repo Rate unchanged at 4%. The RBI’s monetary policy announcement has come on Wednesday after the Central government had asked the Reserve Bank to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side for another five-year period ending March 2026.

RBI keeps Repo Rate unchanged at 4 Per Cent

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 

India`s central bank kept rates steady at record low levels as expected on Friday and said it would maintain support for the economy`s recovery from the pandemic by ensuring ample liquidity for markets to absorb a massive government borrowing programme.

"Going forward, the Indian economy is poised to move in only one direction and that is upwards. It is our strong conviction, backed by forecasts, that in 2021/22, we would undo the damage that COVID-19 has inflicted on the economy," Reserve Bank of India Governor Shaktikanta Das said after announcing the rate decision.

The repo rate or RBI`s key lending rate was held at 4% while the reverse repo rate or its borrowing rate was left unchanged at 3.35%.

The repo rate has been cut by a total 115 basis points since March 2020 to cushion the shock from the coronavirus pandemic, following a 135 bps reduction since beginning of 2019.

Das said the six members of the monetary policy committee (MPC) were unanimous in their decision to keep rates on hold.

Expert views:

Rupa Rege-Nitsure, Group Chief Economist, L&amp;T Financial Holdings, Mumbai

"While the MPC didn`t take any rate action, its assurance on retaining the accommodative stance and a few other measures to ease credit are positive from a growth perspective. However, gilt market players were expecting more specific calendar on open market operations and hence were disappointed."

"A decision to normalise the cash reserve ratio also reflects the MPC`s intent that excess liquidity will be absorbed gradually. The RBI`s support to direct credit measures rather is certainly praiseworthy."

Madhavi Arora, Lead Economist, Emkay Global Financial Services LTD., Mumbai

"Overall, we believe the RBI reiterated the dovish stance on rates and we see policy rates on status quo in FY22. The liquidity stance is unlikely to diverge from the accommodative policy stance in the near term. Meanwhile, we think the RBI will continue to ensure that money market skewness is being tackled, pressure on the longer end of the curve is managed well, and maintain its preference for curve flattening. Actions such as Operation Twist/OMOs will continue to smoothen the distribution of liquidity across the yield curve. We also watch out for introduction of tools like MSS bonds and/or Standing Deposit Facility etc. ahead."

Aurodeep Nandi, India Economist, Nomura. Mumbai

"The RBI clearly communicated that it doesn`t intend to yank away the liquidity carpet in a way that topples the vases of growth recovery and fiscal financing resting on it."

"Be it the extension of HTM dispensation or the unprecedented step of allowing retail investors to invest in government securities, or allaying market fears on the CRR normalization and reassuring that the hike in fact opens up space for further liquidity operations — all have been designed keeping in mind the smooth absorption of the government`s large borrowing programme."

"In the midst of this, the status quo in policy rates and dovish policy stance correctly takes into cognizance the current growth-inflation dynamics, and has been in line with our expectations."

Rajeev Radhakrishnan, CIO-Fixed Income, SBI Mutual Fund, Mumbai

"Maintaining status quo on rates and stance was the expected outcome of the policy review. But, lack of specific market intervention measures to ensure smooth absorption of the enhanced market borrowings remains the key disappointment from the fixed-income market perspective."

"Providing retail investors a direct avenue to invest in government securities is a welcome announcement from a longer-term perspective."

"While the promise of additional liquidity infusion post the unwinding of the CRR cut in two phases by Q1 FY22 holds the promise of OMO interventions, the immediate market action is a fair reflection of market absorption capacity."

"In the absence of direct and more specific up-front market intervention through OMO/Twist, near-term concerns remain of a gradual uptick in bond yields and continued uncertainty on the demand side as the borrowing program commences for FY22."

Shashank Mendiratta, Economist, IBM, New Delhi

"The RBI provided an upbeat assessment on the economy, highlighting that the outlook has improved significantly. We concur with this assessment as high frequency indicators also point to a gradual normalisation of activity. The central bank also emphasised on the importance of higher fiscal spending, particularly capex to support recovery. While the RBI was sanguine on the near-term food-price outlook, the assessment on core inflation was cautious amid rise in input prices."

"The normalisation of economic activity, amid a strong fiscal push, have reduced the need for rate-cuts. The RBI is likely to remain on a prolonged pause through 2021. Having said that, the central bank will continue to remain in an accommodative stance to nurture the recovery."

Sakshi Gupta, Senior Economist, HDFC Bank, Gurugram

"With significant government borrowings in the first-half, rising inflation risks, and lower liquidity surplus, bond yields are likely to remain under pressure, going ahead. We expect bond yields to trade between 5.95% and 6.10% in the first half of fiscal 2022."

"On inflation estimates, the RBI did sound some caution in terms of inflation risks in the year ahead and revised up its H1 inflation estimate to 5%-5.2%. We expect inflation to average at 5.3% in H1. Over the medium term, one must keep in mind that an expansionary fiscal policy is structurally inflationary and should be watched out for."

Radhika Rao, Economist, DBS Bank, Singapore

"The RBI`s assessment was nuanced, with FY22 growth estimate set at a firm 10.5% y/y while looking beyond the near-term cool off in inflation and flagging risks that core inflation might prove sticky owing to demand impulses from a revival in economic activity and higher commodity prices. The budget`s investment and social sector orientation were seen as improving the quality of the fiscal math and as a positive for potential growth."

"Bond markets were met with some support, firstly an extension of the HTM enhancement to March 2023 and widening the investor pool by allowing retail investors direct access to gilts through the RBI, but an explicit OMO/OT announcement was absent, leading to a bearish reaction in bond prices. Cost of financing (risk-free rates) is, nonetheless, likely to settle at a slightly higher level as activity normalises."

"On liquidity, the RBI clarified that the overall stance was still accommodative whilst liquidity is likely to be withdrawn in a calibrated pace to prevent a dilution in the policy transmission. CRR normalisation remains on track, with a staggered restoration."

Anagha Deodhar, Chief Economist, ICICI Securities, Mumbai

"We expect inflation to come down in the coming months. The MPC expects real GDP to grow 10.5% in FY22 and inflation to print at 5%-5.2% in the second half of fiscal 2022."

"On the regulatory front, the most important announcements are two-phased normalisation of CRR, extending HTM limit for SLR holdings, deferment of capital conservation buffer and allowing retail investment in gilts. Overall, the MPC`s decision bodes well for growth and financial stability."

Garima Kapoor, Economist - Institutional Equities, Elara Capital, Mumbai

"Dispelling worries of possible hardening of market rates owing to the expected high supply of government bonds in FY22, the RBI today extended its accommodative stance to liquidity and hinted that it would stand pat to support the government`s borrowing program."

"While there was no surprise with respect to the rate decision, we believe the decision to allow a retail investor to have direct access to participate in G-sec market is revolutionary and path-breaking."

"The RBI will have to walk a tight rope in FY22 in balancing growth-inflation dynamics amid a huge supply of government bonds."

Kunal Kundu, India Economist, Societe Generale, Bengaluru

"Given that the monetary policy framework is up for review in March, it made no sense to cut the policy rate in this meeting. For January, we expect the inflation to drop marginally to 4.4% yoy from 4.6%. More importantly though, with inflation heading decisively towards the RBI`s median target of 4%, we are quite comfortable with our call of the next rate-cut during Q2 of 2020."

"Importantly, the RBI talked about supporting growth. We would likely see the RBI coming to the aid of the government, even in the fiscal space either by opting for debt monetization or sharing a portion of their excess reserve so that the fund can be used specifically for infrastructure development."

"This is all the more so given that we see a good possibility that the budgeted public capex for FY22 will fall short of the target unless the RBI gets into the act."

Prithviraj Srinivas, Chief Economist, Axis Capital, Mumbai

"The RBI kept policy rate on hold as expected and reiterated its accommodative stance. The operative word in today`s (Friday) policy was the governor`s reiteration of a previous statement that `orderly evolution of bond markets was a public good`. The bank`s inflation projection at 5% in the coming quarters reflects non-food price pressures currently seen in the economy which should keep the central bank watchful, even as economic recovery speeds up and liquidity remains bountiful on capital inflows as well as a large public borrowing programme."

India`s central bank kept rates steady at record low levels as expected on Friday and said it would maintain support for the economy`s recovery from the pandemic by ensuring ample liquidity for markets to absorb a massive government borrowing programme.

India`s central bank kept rates steady at record low levels as expected on Friday and said it would maintain support for the economy`s recovery from the pandemic by ensuring ample liquidity for markets to absorb a massive government borrowing programme. "Going forward, the Indian economy is poised to move in only one direction and that is upwards. It is our strong conviction, backed by forecasts, that in 2021/22, we would undo the damage that COVID-19 has inflicted on the economy," Reserve Bank of India Governor Shaktikanta Das said after announcing the rate decision. The repo rate or RBI`s key lending rate was held at 4% while the reverse repo rate or its borrowing rate was left unchanged at 3.35%. The repo rate has been cut by a total 115 basis points since March 2020 to cushion the shock from the coronavirus pandemic, following a 135 bps reduction since beginning of 2019. Das said the six members of the monetary policy committee (MPC) were unanimous in their decision to keep rates on hold. Expert views: Rupa Rege-Nitsure, Group Chief Economist, L&T Financial Holdings, Mumbai "While the MPC didn`t take any rate action, its assurance on retaining the accommodative stance and a few other measures to ease credit are positive from a growth perspective. However, gilt market players were expecting more specific calendar on open market operations and hence were disappointed." "A decision to normalise the cash reserve ratio also reflects the MPC`s intent that excess liquidity will be absorbed gradually. The RBI`s support to direct credit measures rather is certainly praiseworthy." Madhavi Arora, Lead Economist, Emkay Global Financial Services LTD., Mumbai "Overall, we believe the RBI reiterated the dovish stance on rates and we see policy rates on status quo in FY22. The liquidity stance is unlikely to diverge from the accommodative policy stance in the near term. Meanwhile, we think the RBI will continue to ensure that money market skewness is being tackled, pressure on the longer end of the curve is managed well, and maintain its preference for curve flattening. Actions such as Operation Twist/OMOs will continue to smoothen the distribution of liquidity across the yield curve. We also watch out for introduction of tools like MSS bonds and/or Standing Deposit Facility etc. ahead." Aurodeep Nandi, India Economist, Nomura. Mumbai "The RBI clearly communicated that it doesn`t intend to yank away the liquidity carpet in a way that topples the vases of growth recovery and fiscal financing resting on it." "Be it the extension of HTM dispensation or the unprecedented step of allowing retail investors to invest in government securities, or allaying market fears on the CRR normalization and reassuring that the hike in fact opens up space for further liquidity operations — all have been designed keeping in mind the smooth absorption of the government`s large borrowing programme." "In the midst of this, the status quo in policy rates and dovish policy stance correctly takes into cognizance the current growth-inflation dynamics, and has been in line with our expectations." Rajeev Radhakrishnan, CIO-Fixed Income, SBI Mutual Fund, Mumbai "Maintaining status quo on rates and stance was the expected outcome of the policy review. But, lack of specific market intervention measures to ensure smooth absorption of the enhanced market borrowings remains the key disappointment from the fixed-income market perspective." "Providing retail investors a direct avenue to invest in government securities is a welcome announcement from a longer-term perspective." "While the promise of additional liquidity infusion post the unwinding of the CRR cut in two phases by Q1 FY22 holds the promise of OMO interventions, the immediate market action is a fair reflection of market absorption capacity." "In the absence of direct and more specific up-front market intervention through OMO/Twist, near-term concerns remain of a gradual uptick in bond yields and continued uncertainty on the demand side as the borrowing program commences for FY22." Shashank Mendiratta, Economist, IBM, New Delhi "The RBI provided an upbeat assessment on the economy, highlighting that the outlook has improved significantly. We concur with this assessment as high frequency indicators also point to a gradual normalisation of activity. The central bank also emphasised on the importance of higher fiscal spending, particularly capex to support recovery. While the RBI was sanguine on the near-term food-price outlook, the assessment on core inflation was cautious amid rise in input prices." "The normalisation of economic activity, amid a strong fiscal push, have reduced the need for rate-cuts. The RBI is likely to remain on a prolonged pause through 2021. Having said that, the central bank will continue to remain in an accommodative stance to nurture the recovery." Sakshi Gupta, Senior Economist, HDFC Bank, Gurugram "With significant government borrowings in the first-half, rising inflation risks, and lower liquidity surplus, bond yields are likely to remain under pressure, going ahead. We expect bond yields to trade between 5.95% and 6.10% in the first half of fiscal 2022." "On inflation estimates, the RBI did sound some caution in terms of inflation risks in the year ahead and revised up its H1 inflation estimate to 5%-5.2%. We expect inflation to average at 5.3% in H1. Over the medium term, one must keep in mind that an expansionary fiscal policy is structurally inflationary and should be watched out for." Radhika Rao, Economist, DBS Bank, Singapore "The RBI`s assessment was nuanced, with FY22 growth estimate set at a firm 10.5% y/y while looking beyond the near-term cool off in inflation and flagging risks that core inflation might prove sticky owing to demand impulses from a revival in economic activity and higher commodity prices. The budget`s investment and social sector orientation were seen as improving the quality of the fiscal math and as a positive for potential growth." "Bond markets were met with some support, firstly an extension of the HTM enhancement to March 2023 and widening the investor pool by allowing retail investors direct access to gilts through the RBI, but an explicit OMO/OT announcement was absent, leading to a bearish reaction in bond prices. Cost of financing (risk-free rates) is, nonetheless, likely to settle at a slightly higher level as activity normalises." "On liquidity, the RBI clarified that the overall stance was still accommodative whilst liquidity is likely to be withdrawn in a calibrated pace to prevent a dilution in the policy transmission. CRR normalisation remains on track, with a staggered restoration." Anagha Deodhar, Chief Economist, ICICI Securities, Mumbai "We expect inflation to come down in the coming months. The MPC expects real GDP to grow 10.5% in FY22 and inflation to print at 5%-5.2% in the second half of fiscal 2022." "On the regulatory front, the most important announcements are two-phased normalisation of CRR, extending HTM limit for SLR holdings, deferment of capital conservation buffer and allowing retail investment in gilts. Overall, the MPC`s decision bodes well for growth and financial stability." Garima Kapoor, Economist - Institutional Equities, Elara Capital, Mumbai "Dispelling worries of possible hardening of market rates owing to the expected high supply of government bonds in FY22, the RBI today extended its accommodative stance to liquidity and hinted that it would stand pat to support the government`s borrowing program." "While there was no surprise with respect to the rate decision, we believe the decision to allow a retail investor to have direct access to participate in G-sec market is revolutionary and path-breaking." "The RBI will have to walk a tight rope in FY22 in balancing growth-inflation dynamics amid a huge supply of government bonds." Kunal Kundu, India Economist, Societe Generale, Bengaluru "Given that the monetary policy framework is up for review in March, it made no sense to cut the policy rate in this meeting. For January, we expect the inflation to drop marginally to 4.4% yoy from 4.6%. More importantly though, with inflation heading decisively towards the RBI`s median target of 4%, we are quite comfortable with our call of the next rate-cut during Q2 of 2020." "Importantly, the RBI talked about supporting growth. We would likely see the RBI coming to the aid of the government, even in the fiscal space either by opting for debt monetization or sharing a portion of their excess reserve so that the fund can be used specifically for infrastructure development." "This is all the more so given that we see a good possibility that the budgeted public capex for FY22 will fall short of the target unless the RBI gets into the act." Prithviraj Srinivas, Chief Economist, Axis Capital, Mumbai "The RBI kept policy rate on hold as expected and reiterated its accommodative stance. The operative word in today`s (Friday) policy was the governor`s reiteration of a previous statement that `orderly evolution of bond markets was a public good`. The bank`s inflation projection at 5% in the coming quarters reflects non-food price pressures currently seen in the economy which should keep the central bank watchful, even as economic recovery speeds up and liquidity remains bountiful on capital inflows as well as a large public borrowing programme."

RBI holds interest rates steady at record lows as economic outlook improves

The central bank had slashed the repo rate by 115 basis points since late March 2020 to support growth

India's central bank to keep repo rate unchanged at 4%

The Madurai bench of the Madras High Court has ordered notice to the Central, State Governments, Google, RBI among other institutions regarding the spate in cases of Online money lending at high interest rates via mobile apps. Bench of Justices MM Sundaresh and S Anandi had remarked that foreign money circulating without RBI permission, the methods of recovering the loans represented a sorry state of affairs.&nbsp;

The Public Interest Litigation(PIL) filed by lawyer S.Muthu Kumar highlighted the manner in which people were falling prey to online lending/loan apps, that charge a very high interest rate, that too without any approvals from the Reserve Bank of India (RBI). It added that the apps were being uploaded and downloaded from the Google Play Store without background verification regarding their RBI approvals.

Representing the petitioner, advocate A.Kannan pointed out that advertisements of such apps appeared while using smartphones and instigated users to avail instant loans. When the debtor fails to repay the loan within the prescribed time the tele-callers of the money lending company and their henchmen will start their continuous verbal and physical abuse, which drives the debtor to end their life.&nbsp;

“The recovery teams of such instant money lenders are insulting the debtor by circulating their picture in WhatsApp groups showing them as a “defaulter" which is nothing but infringing the rights of privacy and dignity as enshrined in the Constitution of India” read the PIL, mentioning instances of individuals having been forced to take the extreme step.&nbsp;

The PIL appealed to the Court to pass an order restraining Google from hosting online money lending apps which seek exorbitant interest rates, without prior permission from the RBI. It also sought the intervention of the Government authorities to ban instant loan apps available in the Google play store and other websites. It was also pointed out that a special team must be forced to investigate the shell companies providing digital money lending, where Indian nationals are Directors and Chinese companies are promoting them.&nbsp;

The case is expected to be taken up for hearing on February 3rd.

The Madurai bench of the Madras High Court has ordered notice to the Central, State Governments, Google, RBI among other institutions regarding the spate in cases of Online money lending at high interest rates via mobile apps.

The Madurai bench of the Madras High Court has ordered notice to the Central, State Governments, Google, RBI among other institutions regarding the spate in cases of Online money lending at high interest rates via mobile apps. Bench of Justices MM Sundaresh and S Anandi had remarked that foreign money circulating without RBI permission, the methods of recovering the loans represented a sorry state of affairs. The Public Interest Litigation(PIL) filed by lawyer S.Muthu Kumar highlighted the manner in which people were falling prey to online lending/loan apps, that charge a very high interest rate, that too without any approvals from the Reserve Bank of India (RBI). It added that the apps were being uploaded and downloaded from the Google Play Store without background verification regarding their RBI approvals. Representing the petitioner, advocate A.Kannan pointed out that advertisements of such apps appeared while using smartphones and instigated users to avail instant loans. When the debtor fails to repay the loan within the prescribed time the tele-callers of the money lending company and their henchmen will start their continuous verbal and physical abuse, which drives the debtor to end their life. “The recovery teams of such instant money lenders are insulting the debtor by circulating their picture in WhatsApp groups showing them as a “defaulter" which is nothing but infringing the rights of privacy and dignity as enshrined in the Constitution of India” read the PIL, mentioning instances of individuals having been forced to take the extreme step. The PIL appealed to the Court to pass an order restraining Google from hosting online money lending apps which seek exorbitant interest rates, without prior permission from the RBI. It also sought the intervention of the Government authorities to ban instant loan apps available in the Google play store and other websites. It was also pointed out that a special team must be forced to investigate the shell companies providing digital money lending, where Indian nationals are Directors and Chinese companies are promoting them. The case is expected to be taken up for hearing on February 3rd.

PIL in Madras High Court seeks ban on Instant Money lending apps sans RBI permit 

Reserve Bank of India on Friday decided to keep benchmark interest rate unchanged at 4% but maintained an accommodative stance, implying more rate cuts in the future if the need arises to support the economy hit by the COVID-19 crisis.

The monetary policy committee also decided to retain an accommodative policy stance at least for the current financial year and into the next year to revive growth on a durable basis, Governor Shaktikanta Das said in an online briefing.

The key lending rate of the RBI or the repo rate was left unchanged at 4% while the reverse repo rate or the key borrowing rate stayed at 3.35%.

Governor Das also said that the real GDP growth for 2021 is projected at -7.5%.

The central bank has slashed the repo rate by 115 basis points (bps) since late March to cushion the shock from the coronavirus crisis and sweeping lockdowns to check its spread.

Economists and market participants are closely awaiting commentary from the RBI about liquidity conditions.&nbsp;

(With inputs from agencies)

Reserve Bank of India on Friday decided to keep benchmark interest rate unchanged at 4% but maintained an accommodative stance, implying more rate cuts in the future if the need arises to support the economy hit by the COVID-19 crisis.

Reserve Bank of India on Friday decided to keep benchmark interest rate unchanged at 4% but maintained an accommodative stance, implying more rate cuts in the future if the need arises to support the economy hit by the COVID-19 crisis. The monetary policy committee also decided to retain an accommodative policy stance at least for the current financial year and into the next year to revive growth on a durable basis, Governor Shaktikanta Das said in an online briefing. The key lending rate of the RBI or the repo rate was left unchanged at 4% while the reverse repo rate or the key borrowing rate stayed at 3.35%. Governor Das also said that the real GDP growth for 2021 is projected at -7.5%. The central bank has slashed the repo rate by 115 basis points (bps) since late March to cushion the shock from the coronavirus crisis and sweeping lockdowns to check its spread. Economists and market participants are closely awaiting commentary from the RBI about liquidity conditions. (With inputs from agencies)

RBI keeps repo rate unchanged at 4%, GDP forecast upgraded

Indian Sensex touches 45,000 mark for the first time, the Indian central bank RBI upgrades growth projections.

Indian Sensex create history by touching 45,000 mark for the first time

In an unprecedented move, the Reserve Bank has temporarily barred HDFC Bank from launching digital banking initiatives and issuing new credit cards after taking a serious view of service outages at the country's largest private sector lender over the last two years.

The Reserve Bank of India's order came on Wednesday, days after the last instance of service outage across its digital banking channels, including internet banking, mobile banking and other payments. The outage, which happened on November 21, had severely inconvenienced customers, the bank informed the exchanges on Thursday.

In December 2018, the bank's new mobile application crashed within hours of its launch in what was attributed to the inability of the servers to handle the heightened traffic. Exactly a year later, its online channels were down during the salary time. After the second incident, the RBI had said that it was looking into the glitches.

Usually, the RBI slaps monetary penalties on erring entities that comes under its regulatory framework. 
On Thursday, HDFC Bank said the latest incident on November 21 was a result of a power failure in its primary data center.

"The RBI has advised the bank to temporarily stop all launches of the digital business generating activities planned under its programme - Digital 2.0 (to be launched) and other proposed business generating IT applications, and sourcing of new credit card customers," the bank informed the stock exchanges in a filing.

The central bank has also asked HDFC Bank to ensure that its board "examines the lapses and fixes accountability". This is the first major challenge faced by its new chief executive Shashidhar Jagdishan, who took charge in late October.

The bank is the largest issuer of credit cards and had 1.49 crore customers as of September this year while on the debit cards front, it had 3.38 crore customers.

A HDFC Bank official said existing users will be able to continue using the services and added that security-related updates for mobile banking apps will be the only addition allowed till the RBI order is in force.

Details of the timeline for which the order will be in force or targets/ milestones asked to be achieved by the bank before it goes back to business as usual, were not immediately known. More details on the yet-to-be-launched Digital 2.0 programme were also not available.

After every instance of outage, HDFC Bank has seen many of the customers venting their ire on online mediums. About the November 21 outage as well, there were users complaining about instances like being stuck at merchant establishments as payments were not going through.

Given the spurt in alternative channel usage for undertaking banking and payment activities, HDFC Bank's peers also face similar difficulties. Its larger rival SBI had to face ire of customers earlier this week, with complaints of transaction failures. The SBI had faced technical glitches the previous month as well.

In the filing on Thursday, HDFC Bank said it has been its endeavour to provide seamless digital services and added that it has been "taking?conscious, concrete steps to remedy the recent outages on its digital banking channels".

The bank also said theses measures will not "materially impact its overall business".

Shares of the bank were trading nearly two per cent lower at Rs 1,382 on the BSE in afternoon trade.

In an unprecedented move, the Reserve Bank has temporarily barred HDFC Bank from launching digital banking initiatives and issuing new credit cards after taking a serious view of service outages at the country's largest private sector lender over the last two years.

In an unprecedented move, the Reserve Bank has temporarily barred HDFC Bank from launching digital banking initiatives and issuing new credit cards after taking a serious view of service outages at the country's largest private sector lender over the last two years. The Reserve Bank of India's order came on Wednesday, days after the last instance of service outage across its digital banking channels, including internet banking, mobile banking and other payments. The outage, which happened on November 21, had severely inconvenienced customers, the bank informed the exchanges on Thursday. In December 2018, the bank's new mobile application crashed within hours of its launch in what was attributed to the inability of the servers to handle the heightened traffic. Exactly a year later, its online channels were down during the salary time. After the second incident, the RBI had said that it was looking into the glitches. Usually, the RBI slaps monetary penalties on erring entities that comes under its regulatory framework. On Thursday, HDFC Bank said the latest incident on November 21 was a result of a power failure in its primary data center. "The RBI has advised the bank to temporarily stop all launches of the digital business generating activities planned under its programme - Digital 2.0 (to be launched) and other proposed business generating IT applications, and sourcing of new credit card customers," the bank informed the stock exchanges in a filing. The central bank has also asked HDFC Bank to ensure that its board "examines the lapses and fixes accountability". This is the first major challenge faced by its new chief executive Shashidhar Jagdishan, who took charge in late October. The bank is the largest issuer of credit cards and had 1.49 crore customers as of September this year while on the debit cards front, it had 3.38 crore customers. A HDFC Bank official said existing users will be able to continue using the services and added that security-related updates for mobile banking apps will be the only addition allowed till the RBI order is in force. Details of the timeline for which the order will be in force or targets/ milestones asked to be achieved by the bank before it goes back to business as usual, were not immediately known. More details on the yet-to-be-launched Digital 2.0 programme were also not available. After every instance of outage, HDFC Bank has seen many of the customers venting their ire on online mediums. About the November 21 outage as well, there were users complaining about instances like being stuck at merchant establishments as payments were not going through. Given the spurt in alternative channel usage for undertaking banking and payment activities, HDFC Bank's peers also face similar difficulties. Its larger rival SBI had to face ire of customers earlier this week, with complaints of transaction failures. The SBI had faced technical glitches the previous month as well. In the filing on Thursday, HDFC Bank said it has been its endeavour to provide seamless digital services and added that it has been "taking?conscious, concrete steps to remedy the recent outages on its digital banking channels". The bank also said theses measures will not "materially impact its overall business". Shares of the bank were trading nearly two per cent lower at Rs 1,382 on the BSE in afternoon trade.

RBI temporarily bars HDFC Bank from issuing new credit cards, launching digital initiatives

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