The US Federal Reserve has raised interest rates by 25 basis points on Wednesday, September 16, 2026, for the first time since July 2023, following its unanimous 12-0 vote. The new Fed Chair Kevin Warsh raised the interest rate from 3.75 per cent to 4 per cent, and the impact is likely to be felt beyond the US, from rupee and bond yields to the Indian stock market and FPIs. This comes despite US President Donald Trump urging that the rates are too high, and specifically supporting Warsh to deliver a much-needed rate cut. According to the Fed's Summary of Economic Projections, 16 out of 18 officials project at least one more quarter-point rate hike by the end of 2026.<h2>Why did the Fed hike rates?</h2>On the surface, the explanation provided was inflation. US consumer inflation rose 0.4 per cent in August and 3.4 per cent over the last 12 months, well above the 2 per cent target. The Fed believes that the rate hike should bring inflation back towards its projected goal. The higher interest rates are expected to slow down demand by increasing borrowing costs. It is also likely to raise rate of mortgages, car loans and student loans.Also Read: <a href="https://www.wionews.com/india-news/congress-denies-mps-backed-upi-fee-finance-panel-report-1789653170824">Congress denies MPs backed UPI fee, calls it a 'news plantation economy'</a><h2>Will inflation drop?</h2>Even though the Fed cited inflation as the issue it is not related to a demand problem, but a supply shock. The Iran war has pushed oil prices well above $100 per barrel. Further, the AI build out itself has created massive asset bubbles. A few corporations are circulating capital among themselves, calling it revenue. It is hardly surprising AI CEOs are calling for a slowdown. Some officials described it as a serious concern, an inflation risk, alongside the energy shock. Officials framed the rate hike as trying to keep near-term price shocks from becoming a persistent inflation problem, not as a claim that hiking will bring gas prices down.Officials are also expecting to stop the elevated energy costs from bleeding into broader inflation expectations and wage-price spirals. Core CPI, which excludes food and energy prices, stood at 0.3 per cent for August and 2.4 per cent annually, which is elevated, meaning that inflation has already spilt over into other parts of the economy.&nbsp;<h2>What does it mean for the Indian rupee, dollar and FPI?&nbsp;</h2>The dollar has strengthened following the rate hike. It eased by 0.2 per cent after rising 0.7 per cent in the prior session. Other assets from developing economies are already feeling the heat. The rupee is flirting with the psychological 96-per-dollar level; it fell to an intraday low of 96.10 before staging a recovery to close flat at 95.89. Foreign Portfolio investment is also likely to drop as global investors find dollar-dominated assets more attractive. Overseas investors are aggressively hedging, as stop-loss orders are kicking in, which can keep pressure on the rupee even without fresh bad news. It is not just driven by the strength of the dollar; a double whammy with crude prices continuing above the psychological $100 mark. Sensex was volatile, with significant intraday swings and closing nearly flat, down marginally by 21.86 points.&nbsp;The dollar is seeming strong in the short term, but persistently high borrowing costs will push US debt even higher. The long-term prospect of $40 trillion in debt does not look good for Uncle Sam. The interest is already more than $1.2 trillion higher than the US defence budget. This financial burden of servicing it is unlike anything ever seen in history.Also Read: <a href="https://www.wionews.com/world/pakistan-mecca-defence-pact-houthi-drone-incident-saudi-arabia-1789648511839">Pakistan vows to honour Mecca defence pact after drone incident near holy city</a><h2>Rate hike looming for India</h2>The Fed's move was mirrored in the European Central Bank, which also raised interest rates by 25 basis points. Bank of Japan is also likely to follow with a rate hike to a 31-year high this Friday, September 18. With all major banks following the new regime, it is also imperative that the Reserve Bank of India revise its policy of holding rates. India has also seen CPI at 4.8 per cent for August, well above the target of 4 per cent, generalised for the third straight month. In fact, the minutes of the last MPC meeting point in that direction. The RBI has already announced Open Market Operations (OMO) sales to soak up the extra liquidity ahead of the festive season to align the Weighted Average Call Rate (WACR) with the policy repo rate.

The US Fed has raised rates to 4%, putting pressure on the rupee, FPIs and Indian stocks as crude prices and inflation remain elevated.

The US Federal Reserve has raised interest rates by 25 basis points on Wednesday, September 16, 2026, for the first time since July 2023, following its unanimous 12-0 vote. The new Fed Chair Kevin Warsh raised the interest rate from 3.75 per cent to 4 per cent, and the impact is likely to be felt beyond the US, from rupee and bond yields to the Indian stock market and FPIs. This comes despite US President Donald Trump urging that the rates are too high, and specifically supporting Warsh to deliver a much-needed rate cut. According to the Fed's Summary of Economic Projections, 16 out of 18 officials project at least one more quarter-point rate hike by the end of 2026. Why did the Fed hike rates? On the surface, the explanation provided was inflation. US consumer inflation rose 0.4 per cent in August and 3.4 per cent over the last 12 months, well above the 2 per cent target. The Fed believes that the rate hike should bring inflation back towards its projected goal. The higher interest rates are expected to slow down demand by increasing borrowing costs. It is also likely to raise rate of mortgages, car loans and student loans. Also Read: Congress denies MPs backed UPI fee, calls it a 'news plantation economy' Will inflation drop? Even though the Fed cited inflation as the issue it is not related to a demand problem, but a supply shock. The Iran war has pushed oil prices well above $100 per barrel. Further, the AI build out itself has created massive asset bubbles. A few corporations are circulating capital among themselves, calling it revenue. It is hardly surprising AI CEOs are calling for a slowdown. Some officials described it as a serious concern, an inflation risk, alongside the energy shock. Officials framed the rate hike as trying to keep near-term price shocks from becoming a persistent inflation problem, not as a claim that hiking will bring gas prices down. Officials are also expecting to stop the elevated energy costs from bleeding into broader inflation expectations and wage-price spirals. Core CPI, which excludes food and energy prices, stood at 0.3 per cent for August and 2.4 per cent annually, which is elevated, meaning that inflation has already spilt over into other parts of the economy. What does it mean for the Indian rupee, dollar and FPI? The dollar has strengthened following the rate hike. It eased by 0.2 per cent after rising 0.7 per cent in the prior session. Other assets from developing economies are already feeling the heat. The rupee is flirting with the psychological 96-per-dollar level; it fell to an intraday low of 96.10 before staging a recovery to close flat at 95.89. Foreign Portfolio investment is also likely to drop as global investors find dollar-dominated assets more attractive. Overseas investors are aggressively hedging, as stop-loss orders are kicking in, which can keep pressure on the rupee even without fresh bad news. It is not just driven by the strength of the dollar; a double whammy with crude prices continuing above the psychological $100 mark. Sensex was volatile, with significant intraday swings and closing nearly flat, down marginally by 21.86 points. The dollar is seeming strong in the short term, but persistently high borrowing costs will push US debt even higher. The long-term prospect of $40 trillion in debt does not look good for Uncle Sam. The interest is already more than $1.2 trillion higher than the US defence budget. This financial burden of servicing it is unlike anything ever seen in history. Also Read: Pakistan vows to honour Mecca defence pact after drone incident near holy city Rate hike looming for India The Fed's move was mirrored in the European Central Bank, which also raised interest rates by 25 basis points. Bank of Japan is also likely to follow with a rate hike to a 31-year high this Friday, September 18. With all major banks following the new regime, it is also imperative that the Reserve Bank of India revise its policy of holding rates. India has also seen CPI at 4.8 per cent for August, well above the target of 4 per cent, generalised for the third straight month. In fact, the minutes of the last MPC meeting point in that direction. The RBI has already announced Open Market Operations (OMO) sales to soak up the extra liquidity ahead of the festive season to align the Weighted Average Call Rate (WACR) with the policy repo rate.

The US Fed has raised rates to 4%, putting pressure on the rupee, FPIs and Indian stocks as crude prices and inflation remain elevated.

Fed hikes rates to 4%: Why India’s rupee, FPI and stock market face pressure

Forex inflows under the special USD-INR swap facility of the Reserve Bank of India have totalled USD 72.85 billion as of August 21, with FCNR(B) deposits making up the largest share under the scheme, according to the central bank data released on Saturday. The RBI confirmed that authorised dealer banks reported USD 65.397 billion in inflows via Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits under the scheme through August 21. Overseas foreign currency borrowings (OFCBs) contributed USD 4.86 billion, while external commercial borrowings (ECBs) added USD 2.591 billion. The apex bank launched the special USD-INR forex swap facility on June 8 to boost foreign currency inflows through FCNR(B) deposits, ECBs and OFCBs. The facility was designed with the aim of providing support for foreign currency inflows through these channels and strengthening the availability of foreign exchange in the domestic financial system. The RBI confirmed that the window for FCNR(B) deposits under the scheme remains open until August 31, while the facility for ECBs and OFCBs will remain available until December 31.<h3>FCNR(B) deposits as source of foreign currency mobilisation</h3>The latest data indicates that FCNR(B) deposits have surfaced as a powerful source of foreign currency mobilisation under the facility. It accounts for approximately 90 per cent of the total inflows, and the combined inflows from OFCBs and ECBs stood at around USD 7.45 billion. The robust fundraising comes as the FCNR(B) deposit deadline approaches at the end of August, underscoring the strong uptake by banks and overseas depositors of the RBI's special forex facility. The central bank had previously said the FCNR(B) window would shut on August 31, while the ECB and OFCB components would run for a longer stretch. The latest figures offer an update on how much authorised dealer banks have utilised the facility as of August 21. The USD 72.85 billion raised across the three components marks a sizeable mobilisation of foreign currency through the RBI-backed scheme, with FCNR(B) deposits continuing to drive the bulk of it.

The apex bank launched the special USD-INR forex swap facility on June 8 to boost foreign currency inflows through FCNR(B) deposits, ECBs and OFCBs to support foreign currency inflows through these channels and strengthen the availability of foreign exchange in the domestic financial system.

Forex inflows under the special USD-INR swap facility of the Reserve Bank of India have totalled USD 72.85 billion as of August 21, with FCNR(B) deposits making up the largest share under the scheme, according to the central bank data released on Saturday. The RBI confirmed that authorised dealer banks reported USD 65.397 billion in inflows via Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits under the scheme through August 21. Overseas foreign currency borrowings (OFCBs) contributed USD 4.86 billion, while external commercial borrowings (ECBs) added USD 2.591 billion. The apex bank launched the special USD-INR forex swap facility on June 8 to boost foreign currency inflows through FCNR(B) deposits, ECBs and OFCBs. The facility was designed with the aim of providing support for foreign currency inflows through these channels and strengthening the availability of foreign exchange in the domestic financial system. The RBI confirmed that the window for FCNR(B) deposits under the scheme remains open until August 31, while the facility for ECBs and OFCBs will remain available until December 31. FCNR(B) deposits as source of foreign currency mobilisation The latest data indicates that FCNR(B) deposits have surfaced as a powerful source of foreign currency mobilisation under the facility. It accounts for approximately 90 per cent of the total inflows, and the combined inflows from OFCBs and ECBs stood at around USD 7.45 billion. The robust fundraising comes as the FCNR(B) deposit deadline approaches at the end of August, underscoring the strong uptake by banks and overseas depositors of the RBI's special forex facility. The central bank had previously said the FCNR(B) window would shut on August 31, while the ECB and OFCB components would run for a longer stretch. The latest figures offer an update on how much authorised dealer banks have utilised the facility as of August 21. The USD 72.85 billion raised across the three components marks a sizeable mobilisation of foreign currency through the RBI-backed scheme, with FCNR(B) deposits continuing to drive the bulk of it.

The apex bank launched the special USD-INR forex swap facility on June 8 to boost foreign currency inflows through FCNR(B) deposits, ECBs and OFCBs to support foreign currency inflows through these channels and strengthen the availability of foreign exchange in the domestic financial system.

RBI's forex swap facility reach $72.85 billion as FCNR(B) deposits tops USD 65 Billion

The Reserve Bank of India's Monetary Policy Committee (MPC) on Wednesday (Aug 5) kept the benchmark repo rate unchanged at 5.25 per cent, while retaining its neutral policy stance, signalling caution amid rising inflationary pressures.Announcing the MPC's decision, RBI Governor Sanjay Malhotra said the committee had unanimously decided to leave the policy rate unchanged. The central bank flagged that headline inflation has moved above its target and is expected to remain elevated in the near term, with food and fuel prices emerging as the key drivers of price pressures.<h2>Key highlights</h2><ul><li>Repo rate unchanged at 5.25%</li><li>Policy stance retained as “neutral”</li><li>Headline inflation has risen above the RBI's target</li><li>Food and fuel prices are adding to inflationary pressures</li><li>Headline inflation expected to remain elevated in the near term</li></ul><h2>Inflation remains above target</h2>The central bank flagged rising inflation as a key concern, noting that headline inflation has moved above the RBI's target. Governor Malhotra said food and fuel prices continue to add pressure to inflation, with headline inflation expected to remain elevated in the near term.The RBI projected consumer price inflation at 5 per cent for the current financial year, while core inflation is expected to average 4.3 per cent.<h2>Growth outlook revised upward</h2>Despite inflation concerns, the RBI marginally raised its growth forecast for the current fiscal year. The central bank now expects real GDP growth at 6.7 per cent, an increase of 10 basis points from its previous estimate, reflecting resilience in domestic economic activity.<h2>Global risks remain</h2>The RBI cautioned that external uncertainties continue to pose risks to India's growth trajectory.&nbsp;It identified the ongoing conflict in West Asia, volatility in international financial markets and weather-related disruptions as key factors that could weigh on economic activity in the months ahead.By maintaining both the repo rate and its neutral stance, the central bank indicated it remains focused on balancing inflation control with sustaining economic growth as global and domestic uncertainties persist.

The RBI has kept the repo rate unchanged at 5.25% and retained its neutral policy stance, citing rising inflation driven by food and fuel prices. The central bank warned that headline inflation has moved above its target and is likely to remain elevated in the near term.

The Reserve Bank of India's Monetary Policy Committee (MPC) on Wednesday (Aug 5) kept the benchmark repo rate unchanged at 5.25 per cent, while retaining its neutral policy stance, signalling caution amid rising inflationary pressures. Announcing the MPC's decision, RBI Governor Sanjay Malhotra said the committee had unanimously decided to leave the policy rate unchanged. The central bank flagged that headline inflation has moved above its target and is expected to remain elevated in the near term, with food and fuel prices emerging as the key drivers of price pressures. Key highlights Repo rate unchanged at 5.25% Policy stance retained as “neutral” Headline inflation has risen above the RBI's target Food and fuel prices are adding to inflationary pressures Headline inflation expected to remain elevated in the near term Inflation remains above target The central bank flagged rising inflation as a key concern, noting that headline inflation has moved above the RBI's target. Governor Malhotra said food and fuel prices continue to add pressure to inflation, with headline inflation expected to remain elevated in the near term. The RBI projected consumer price inflation at 5 per cent for the current financial year, while core inflation is expected to average 4.3 per cent. Growth outlook revised upward Despite inflation concerns, the RBI marginally raised its growth forecast for the current fiscal year. The central bank now expects real GDP growth at 6.7 per cent, an increase of 10 basis points from its previous estimate, reflecting resilience in domestic economic activity. Global risks remain The RBI cautioned that external uncertainties continue to pose risks to India's growth trajectory. It identified the ongoing conflict in West Asia, volatility in international financial markets and weather-related disruptions as key factors that could weigh on economic activity in the months ahead. By maintaining both the repo rate and its neutral stance, the central bank indicated it remains focused on balancing inflation control with sustaining economic growth as global and domestic uncertainties persist.

The RBI has kept the repo rate unchanged at 5.25% and retained its neutral policy stance, citing rising inflation driven by food and fuel prices. The central bank warned that headline inflation has moved above its target and is likely to remain elevated in the near term.

RBI holds repo rate at 5.25%, retains neutral stance amid inflation risks

India has approved the Reserve Bank of India's proposal to begin large-scale field trials of polymer banknotes in ₹10 and ₹20 denominations. The RBI will print 2 billion polymer notes for testing to evaluate their durability, cost-effectiveness, and performance in circulation. Officials clarified that there is no plan to replace existing paper currency, with both polymer and paper notes expected to circulate together if the pilot succeeds. Polymer banknotes, already used in over 60 countries including Australia, the UK, and Canada, last significantly longer than conventional paper notes and offer improved resistance to wear, moisture, and dirt. The move revives a proposal first announced in 2012 and aims to improve the lifespan of Indian currency while reducing long-term currency management costs.

India Approves Polymer ₹10 & ₹20 Banknote Trials | RBI to Test 2 Billion Plastic Currency Notes

The Reserve Bank of India has issued a fresh reminder on Thursday: if a 2,000 rupee note is still sitting in your drawer, it hasn't turned into paper. It remains legal tender, but it's now a relic of a currency experiment that's almost over.


RBI's quiet currency cleanup nears the end 

Gold is no longer just an heirloom in India; it's fast turning into working capital. On the other hand, Beijing is stockpiling it like never before. Two very different stories for one asset class.<h3>Gold loans surge, India's silent credit shift</h3>Let's start with India. Reserve Bank of India data shows loans against gold jewellery crossed 4 lakh crore rupees, or over $42 billion, by January this year. That is a 128 per cent year-on-year jump.&nbsp;Zoom out further, and new gold loan sourcing surged 91 per cent year-on-year in last year's December quarter alone, with active accounts crossing 90 million. Non-banking financial companies, or NBFCs, are the engine.&nbsp;Their gold loan books nearly doubled, up 96.5 per cent year-on-year, dwarfing the industry's 54.5 per cent growth.That shows NBFCs are riding India's gold-backed loan boom.<h3>South India leads, North is catching up fast</h3>Geography tells the real story. Tamil Nadu leads with 5.96 lakh crore rupees in outstanding gold loans, followed by Andhra Pradesh at 3.08 lakh crore rupees, then Karnataka, Telangana and Kerala.&nbsp;The five southern states are cornering nearly three-fourths of the entire market. But the map is shifting: Uttar Pradesh, Madhya Pradesh and Rajasthan are now emerging as high-growth frontiers. That is a clear sign gold-backed credit is going pan-India.<h3>From crisis cash to growth capital: Gold</h3><h3>Why now?</h3>Elevated gold prices mean smaller amounts of jewellery unlock bigger loans. In addition, RBI's crackdown on unsecured lending has pushed borrowers toward safer, collateral-backed products.&nbsp;And crucially, this isn't panic borrowing, but productive borrowing for funding small businesses, education and agriculture inputs. The old "gold loan for a crisis" script is being rewritten into "gold loan for growth."&nbsp;Also read: <a href="https://www.wionews.com/trending/man-from-year-3700-warns-of-apocalyptic-war-with-robots-1783492147310">Man claims he travelled to year 3700. Robots had killed 30% of humans. Here is what else he says he saw</a><h3>Two nations, one metal, opposite strategies</h3>Now over to China. It is a mirror image, at the sovereign scale. The People's Bank of China, or the PBOC, just booked its 20th straight month of gold buying, adding 480,000 troy ounces, or 14.93 tonnes, in June. That's China's largest single-month purchase since 2023. It is also the longest streak since 2015, taking reserves to roughly 2,346 tonnes.<h3>Beijing bets big as gold prices crash</h3>Tellingly, Beijing bought aggressively even as gold prices fell nearly 12 per cent in June. The latest decline marks the yellow metal's sharpest monthly drop since 2008. That trend shows a classic dip-buying by a reserve manager thinking in decades, not quarters.&nbsp;Bottom line: Indian households are unlocking dead capital for livelihoods, while China is hoarding it to dedollarise reserves. Same metal, two entirely different bets on the future.

Reserve Bank of India data shows loans against gold jewellery crossed 4 lakh crore rupees, or over $42 billion, by January this year. That is a 128 per cent year-on-year jump.

Gold is no longer just an heirloom in India; it's fast turning into working capital. On the other hand, Beijing is stockpiling it like never before. Two very different stories for one asset class. Gold loans surge, India's silent credit shift Let's start with India. Reserve Bank of India data shows loans against gold jewellery crossed 4 lakh crore rupees, or over $42 billion, by January this year. That is a 128 per cent year-on-year jump. Zoom out further, and new gold loan sourcing surged 91 per cent year-on-year in last year's December quarter alone, with active accounts crossing 90 million. Non-banking financial companies, or NBFCs, are the engine. Their gold loan books nearly doubled, up 96.5 per cent year-on-year, dwarfing the industry's 54.5 per cent growth. That shows NBFCs are riding India's gold-backed loan boom. South India leads, North is catching up fast Geography tells the real story. Tamil Nadu leads with 5.96 lakh crore rupees in outstanding gold loans, followed by Andhra Pradesh at 3.08 lakh crore rupees, then Karnataka, Telangana and Kerala. The five southern states are cornering nearly three-fourths of the entire market. But the map is shifting: Uttar Pradesh, Madhya Pradesh and Rajasthan are now emerging as high-growth frontiers. That is a clear sign gold-backed credit is going pan-India. From crisis cash to growth capital: Gold Why now? Elevated gold prices mean smaller amounts of jewellery unlock bigger loans. In addition, RBI's crackdown on unsecured lending has pushed borrowers toward safer, collateral-backed products. And crucially, this isn't panic borrowing, but productive borrowing for funding small businesses, education and agriculture inputs. The old "gold loan for a crisis" script is being rewritten into "gold loan for growth." Also read: Man claims he travelled to year 3700. Robots had killed 30% of humans. Here is what else he says he saw Two nations, one metal, opposite strategies Now over to China. It is a mirror image, at the sovereign scale. The People's Bank of China, or the PBOC, just booked its 20th straight month of gold buying, adding 480,000 troy ounces, or 14.93 tonnes, in June. That's China's largest single-month purchase since 2023. It is also the longest streak since 2015, taking reserves to roughly 2,346 tonnes. Beijing bets big as gold prices crash Tellingly, Beijing bought aggressively even as gold prices fell nearly 12 per cent in June. The latest decline marks the yellow metal's sharpest monthly drop since 2008. That trend shows a classic dip-buying by a reserve manager thinking in decades, not quarters. Bottom line: Indian households are unlocking dead capital for livelihoods, while China is hoarding it to dedollarise reserves. Same metal, two entirely different bets on the future.

Reserve Bank of India data shows loans against gold jewellery crossed 4 lakh crore rupees, or over $42 billion, by January this year. That is a 128 per cent year-on-year jump.

Are Indians finally monetising their gold?

The Reserve Bank of India has kept the repo rate unchanged at 5.25% while lowering its GDP growth forecast to 6.6%. The central bank cited global uncertainties, inflation concerns, and evolving economic conditions behind its cautious outlook. The decision comes as policymakers balance growth support with inflation control amid shifting domestic and international market trends.


RBI Holds Repo Rate at 5.25%, cuts GDP View to 6.6% 

SBI Research has urged the Reserve Bank of India (RBI) to take a stronger intervention to support the rupee, stating that the recent weakening of the currency appears disproportionate to India's economic fundamentals. In its latest report, SBI Research observed that the rupee's fall against the US dollar has been notably rapid despite the Indian economy continuing to display robust macroeconomic strength. "The speed of rupee depreciation has been reckless, and the rupee took only 152 days to depreciate by Rs 5 per dollar (from Rs 90 to Rs 95)," the report said, underscoring that the rupee touched 96.83 against the US dollar on May 20. The report suggested that the current level of depreciation exceeds what would normally be justified by India's underlying economic conditions. "The present Rupee depreciation is indeed higher when seen against India's macroeconomic fundamentals and clearly when compared with other currencies against the dollar strength," SBI Research said. It further noted that the country's foreign exchange reserves remain strong enough to help curb excessive volatility in the currency market. According to the report, India's reserves are adequately positioned to counter a one-sided decline in the rupee.&nbsp;Also read: <a href="https://www.wionews.com/india-news/india-slashes-export-duties-on-petrol-diesel-and-atf-new-rates-effective-june-1-1780203850179">India slashes export duties on petrol, diesel and ATF; new rates effective June 1</a><h3>RBI past intervention</h3>Although foreign exchange reserves have fallen by around USD 47 billion since February 27, 2026, they still stand at approximately USD 680 billion, providing the RBI with ample capacity to step in when necessary. SBI Research added that a stronger and more sustained intervention by the central bank could help steady the rupee during periods of global market uncertainty. It pointed out that past episodes of decisive RBI intervention have often been followed by a recovery in the currency's value. The research team also discovered that the weakness of the rupee seems driven not only by global dollar strength but also by risk aversion connected to the ongoing conflict in West Asia and large foreign portfolio outflows from Indian equities. It further noted that India has experienced net foreign institutional investor (FII) equity outflows of USD 22.7 billion since the West Asia conflict started. It also argued that the rupee is currently undervalued and has fallen beyond levels implied by broader trade-weighted measures. "The current Rupee value is not in synchronization with India's domestic macro fundamentals," the report said.

SBI Research team discovered that the weakness of the rupee seems driven not only by global dollar strength but also by risk aversion connected to the ongoing conflict in West Asia and large foreign portfolio outflows from Indian equities.

SBI Research has urged the Reserve Bank of India (RBI) to take a stronger intervention to support the rupee, stating that the recent weakening of the currency appears disproportionate to India's economic fundamentals. In its latest report, SBI Research observed that the rupee's fall against the US dollar has been notably rapid despite the Indian economy continuing to display robust macroeconomic strength. "The speed of rupee depreciation has been reckless, and the rupee took only 152 days to depreciate by Rs 5 per dollar (from Rs 90 to Rs 95)," the report said, underscoring that the rupee touched 96.83 against the US dollar on May 20. The report suggested that the current level of depreciation exceeds what would normally be justified by India's underlying economic conditions. "The present Rupee depreciation is indeed higher when seen against India's macroeconomic fundamentals and clearly when compared with other currencies against the dollar strength," SBI Research said. It further noted that the country's foreign exchange reserves remain strong enough to help curb excessive volatility in the currency market. According to the report, India's reserves are adequately positioned to counter a one-sided decline in the rupee. Also read: India slashes export duties on petrol, diesel and ATF; new rates effective June 1 RBI past intervention Although foreign exchange reserves have fallen by around USD 47 billion since February 27, 2026, they still stand at approximately USD 680 billion, providing the RBI with ample capacity to step in when necessary. SBI Research added that a stronger and more sustained intervention by the central bank could help steady the rupee during periods of global market uncertainty. It pointed out that past episodes of decisive RBI intervention have often been followed by a recovery in the currency's value. The research team also discovered that the weakness of the rupee seems driven not only by global dollar strength but also by risk aversion connected to the ongoing conflict in West Asia and large foreign portfolio outflows from Indian equities. It further noted that India has experienced net foreign institutional investor (FII) equity outflows of USD 22.7 billion since the West Asia conflict started. It also argued that the rupee is currently undervalued and has fallen beyond levels implied by broader trade-weighted measures. "The current Rupee value is not in synchronization with India's domestic macro fundamentals," the report said.

SBI Research team discovered that the weakness of the rupee seems driven not only by global dollar strength but also by risk aversion connected to the ongoing conflict in West Asia and large foreign portfolio outflows from Indian equities.

Rupee's fall is ‘reckless’, RBI must step in more aggressively: SBI Research

The Reserve Bank of India has warned that a prolonged conflict in West Asia could disrupt India’s growth and inflation trajectory, even as it maintained that ‘the outlook for the Indian economy in 2026-27 remains positive, supported by strong macroeconomic fundamentals’. The RBI nevertheless retained its FY27 real GDP growth forecast at 6.9 per cent, assuming the impact of the West Asia conflict remains contained in the near term. Inflation for FY27 has been projected at 4.6 per cent, although the central bank said risks remain “tilted to the upside”.<h2>Energy Prices and Supply Chains in Focus</h2>The central bank flagged elevated crude oil and commodity prices as a key concern, warning that any escalation in the conflict could intensify inflationary pressures globally and domestically. “With continued geopolitical tensions, inflation faces upside risks. The surging energy prices and disruptions in key shipping routes could intensify supply-side pressures,” the RBI said.&nbsp;ALSO READ: <a href="https://www.wionews.com/science/are-couples-always-happier-new-study-finds-single-people-are-happier-than-those-in-unhappy-relationships-1780050331914">Are couples always happier? New study finds bad relationships may be emotionally worse than being single</a>&nbsp;The report noted that global growth could weaken to 3.1 per cent in 2026 amid the ongoing West Asia conflict. World trade volume growth, projected at 2.8 per cent in 2026, also remains vulnerable to geopolitical shifts and inflation linked to energy prices. According to the RBI, evolving growth-inflation dynamics may force central banks worldwide to carefully balance inflation control against protecting economic growth.<h2>India’s Growth Outlook Remains Positive</h2>Despite external headwinds, the RBI said India remains the world’s fastest-growing major economy, expanding by 7.6 per cent in 2025-26 compared with 7.1 per cent a year earlier. The central bank attributed this resilience to “strong domestic consumption, sustained investment, proactive policy initiatives and sound macroeconomic fundamentals”.&nbsp;ALSO READ: <a href="https://www.wionews.com/world/314-million-tax-hit-delhi-ban-hc-denies-relief-to-absolut-vodka-maker-calls-firm-ineligible-for-liquor-licence-1780039115201">‘$314 million tax hit, Delhi ban’: HC denies relief to Absolut Vodka maker, calls firm ‘ineligible’ for liquor licence</a>&nbsp;“The healthy balance sheets of the corporate and banking sectors along with the government’s continued thrust on capital expenditure bode well for India’s strong growth trajectory,” the RBI said. It also pointed to trade agreements with key partners as a potential source of further economic momentum.<h2>Banking System and Inflation Risks</h2>The RBI said India’s banking system remains resilient due to improved asset quality, stable credit growth and adequate capital buffers. However, lingering geopolitical tensions could still affect corporate earnings and loan portfolios.The report also warned that domestic bond yields could rise if global monetary easing slows in response to persistent oil price shocks. Still, the RBI expressed confidence that adequate foodgrain stocks, stable agricultural prospects and sufficient reservoir levels would help keep inflation broadly under control.

Despite external headwinds, the RBI said India remains the world’s fastest-growing major economy, expanding by 7.6 per cent in 2025-26 compared with 7.1 per cent a year earlier.

The Reserve Bank of India has warned that a prolonged conflict in West Asia could disrupt India’s growth and inflation trajectory, even as it maintained that ‘the outlook for the Indian economy in 2026-27 remains positive, supported by strong macroeconomic fundamentals’. The RBI nevertheless retained its FY27 real GDP growth forecast at 6.9 per cent, assuming the impact of the West Asia conflict remains contained in the near term. Inflation for FY27 has been projected at 4.6 per cent, although the central bank said risks remain “tilted to the upside”. Energy Prices and Supply Chains in Focus The central bank flagged elevated crude oil and commodity prices as a key concern, warning that any escalation in the conflict could intensify inflationary pressures globally and domestically. “With continued geopolitical tensions, inflation faces upside risks. The surging energy prices and disruptions in key shipping routes could intensify supply-side pressures,” the RBI said. ALSO READ: Are couples always happier? New study finds bad relationships may be emotionally worse than being single The report noted that global growth could weaken to 3.1 per cent in 2026 amid the ongoing West Asia conflict. World trade volume growth, projected at 2.8 per cent in 2026, also remains vulnerable to geopolitical shifts and inflation linked to energy prices. According to the RBI, evolving growth-inflation dynamics may force central banks worldwide to carefully balance inflation control against protecting economic growth. India’s Growth Outlook Remains Positive Despite external headwinds, the RBI said India remains the world’s fastest-growing major economy, expanding by 7.6 per cent in 2025-26 compared with 7.1 per cent a year earlier. The central bank attributed this resilience to “strong domestic consumption, sustained investment, proactive policy initiatives and sound macroeconomic fundamentals”. ALSO READ: ‘$314 million tax hit, Delhi ban’: HC denies relief to Absolut Vodka maker, calls firm ‘ineligible’ for liquor licence “The healthy balance sheets of the corporate and banking sectors along with the government’s continued thrust on capital expenditure bode well for India’s strong growth trajectory,” the RBI said. It also pointed to trade agreements with key partners as a potential source of further economic momentum. Banking System and Inflation Risks The RBI said India’s banking system remains resilient due to improved asset quality, stable credit growth and adequate capital buffers. However, lingering geopolitical tensions could still affect corporate earnings and loan portfolios. The report also warned that domestic bond yields could rise if global monetary easing slows in response to persistent oil price shocks. Still, the RBI expressed confidence that adequate foodgrain stocks, stable agricultural prospects and sufficient reservoir levels would help keep inflation broadly under control.

Despite external headwinds, the RBI said India remains the world’s fastest-growing major economy, expanding by 7.6 per cent in 2025-26 compared with 7.1 per cent a year earlier.

RBI says West Asia conflict poses short-term risks to India’s growth and inflation, FY27 GDP growth projected at 6.9%

The Reserve Bank of India on Monday (May 25) formed an expert committee to inspect the opportunities and risks arising from quantum technology in the financial sector. RBI's move came in order to design a roadmap to make India's financial ecosystem secure against future quantum-related cyber threats. The committee has been made under the initiative "Quantum Secure and Adaptive Financial Ecosystem (Q-SAFE)." RBI said, "Quantum Technology represents a paradigm shift compared with traditional systems as it leverages the principles of quantum mechanics, such as superposition and entanglement. This enables quantum systems to address complex financial problems such as portfolio optimisation, risk assessment, macroeconomic modelling, etc. However, quantum technologies can also introduce significant risks, particularly the potential to undermine certain existing cryptographic standards".&nbsp;Also read: <a href="https://www.wionews.com/trending/can-ai-replace-pilots-experimental-test-sparks-debate-over-future-of-pilots-1779694688081">Can AI replace pilots? Experimental test sparks debate over future of pilots</a><h3>Who will chair the committee?</h3>The Reserve Bank of India said the newly constituted panel will assess the potential benefits and risks linked to the adoption of quantum technologies in the banking and financial sectors. The committee will be chaired by Anil Prabhakar, a professor in the Department of Electrical Engineering at the Indian Institute of Technology Madras, who will act as the convener. The panel also includes representatives from the Department of Science and Technology, State Bank of India, National Payments Corporation of India, Ministry of Electronics and Information Technology, Data Security Council of India, along with specialists from the quantum technology industry. According to the RBI, the committee will review the existing cryptographic infrastructure used in the financial sector through a Cryptography Bill of Materials (CBOM) and identify systems that could face risks from future quantum computing threats. It will also study how prepared the financial industry is to transition toward quantum-safe cryptography, including the readiness and maturity of available vendor tools and cybersecurity solutions. The central bank noted that the panel may also invite domain experts, industry representatives and other stakeholders for consultations during its deliberations. The RBI stated that the committee is likely to submit its report within six months from the date of its first meeting.&nbsp;

Along with Anil Prabhakar, the panel will also include representatives from the Department of Science and Technology, State Bank of India, NPCI, Ministry of Electronics and Information Technology, Data Security Council of India, and a specialist from the quantum technology industry.

The Reserve Bank of India on Monday (May 25) formed an expert committee to inspect the opportunities and risks arising from quantum technology in the financial sector. RBI's move came in order to design a roadmap to make India's financial ecosystem secure against future quantum-related cyber threats. The committee has been made under the initiative "Quantum Secure and Adaptive Financial Ecosystem (Q-SAFE)." RBI said, "Quantum Technology represents a paradigm shift compared with traditional systems as it leverages the principles of quantum mechanics, such as superposition and entanglement. This enables quantum systems to address complex financial problems such as portfolio optimisation, risk assessment, macroeconomic modelling, etc. However, quantum technologies can also introduce significant risks, particularly the potential to undermine certain existing cryptographic standards". Also read: Can AI replace pilots? Experimental test sparks debate over future of pilots Who will chair the committee? The Reserve Bank of India said the newly constituted panel will assess the potential benefits and risks linked to the adoption of quantum technologies in the banking and financial sectors. The committee will be chaired by Anil Prabhakar, a professor in the Department of Electrical Engineering at the Indian Institute of Technology Madras, who will act as the convener. The panel also includes representatives from the Department of Science and Technology, State Bank of India, National Payments Corporation of India, Ministry of Electronics and Information Technology, Data Security Council of India, along with specialists from the quantum technology industry. According to the RBI, the committee will review the existing cryptographic infrastructure used in the financial sector through a Cryptography Bill of Materials (CBOM) and identify systems that could face risks from future quantum computing threats. It will also study how prepared the financial industry is to transition toward quantum-safe cryptography, including the readiness and maturity of available vendor tools and cybersecurity solutions. The central bank noted that the panel may also invite domain experts, industry representatives and other stakeholders for consultations during its deliberations. The RBI stated that the committee is likely to submit its report within six months from the date of its first meeting.

Along with Anil Prabhakar, the panel will also include representatives from the Department of Science and Technology, State Bank of India, NPCI, Ministry of Electronics and Information Technology, Data Security Council of India, and a specialist from the quantum technology industry.

Quantum threat alert? RBI sets up expert panel to secure financial system, unveils Q-SAFE plan

The Reserve Bank of India (RBI) on Friday approved a record surplus transfer of 2.87 trillion rupees ($29.99 billion) to the federal government for the 2025-26 financial year, providing crucial fiscal support at a time when rising energy costs and subsidy burdens are straining New Delhi’s finances. The payout surpassed last year’s record transfer of 2.69 trillion rupees, but fell short of market expectations.&nbsp;&nbsp;Economists surveyed by Reuters had projected a dividend between 2.9 trillion and 3.2 trillion rupees, with many investors hoping for a larger transfer to cushion the impact of elevated crude oil prices linked to the Iran conflict. Shortly after the announcement, India’s benchmark 10-year bond yield rose three basis points to 7.1 per cent reflecting concerns that the government may still face pressure on its fiscal deficit.&nbsp;ALSO READ:<h2>Oil shock and subsidy burden weigh on finances</h2>India, the world’s third-largest importer and consumer of crude oil, has been grappling with the economic fallout from the Middle East conflict. New Delhi typically sources nearly half of its crude imports through the Strait of Hormuz, which has faced severe disruption since the outbreak of the Iran war earlier this year. The government has already reduced federal fuel taxes to shield consumers from rising prices, while fertiliser subsidy costs are also expected to increase amid higher global urea prices.&nbsp;&nbsp;“The RBI surplus transfer is marginally lower than expected, thereby limiting the levers for the government in terms of managing the fiscal slippage risks,” Upasna Bhardwaj, chief economist at Kotak Mahindra Bank, told Reuters. The government had budgeted for 3.16 trillion rupees in combined dividends from the RBI and state-owned financial institutions.&nbsp;ALSO READ:<h2>Strong RBI earnings boost payout</h2>The central bank said its board approved the surplus transfer after considering “current macroeconomic factors”, financial performance and the “maintenance of appropriate risk buffers”. The RBI’s balance sheet expanded 20.61 per cent to 91.97 trillion rupees as of March 31, 2026. Gross income rose 26.42 per cent, while expenditure increased 27.60 per cent. The RBI lowered its contingency risk buffer to 6.5 per cent of the balance sheet from 7.5 per cent a year earlier, while transferring 1.09 trillion rupees into the reserve buffer.&nbsp;The central bank earns income primarily from foreign securities holdings, including US Treasuries, and through foreign exchange operations. A weakening rupee during the year also contributed to stronger earnings from dollar sales in the open market. The RBI dividend will partially offset higher fertiliser subsidies,” Teresa John of Nirmal Bang Institutional Equities told AFP. “However, the risk of marginal fiscal slippage still remains.”

Economists surveyed by Reuters had projected a dividend between 2.9 trillion and 3.2 trillion rupees, with many investors hoping for a larger transfer to cushion the impact of elevated crude oil prices linked to the Iran conflict.

The Reserve Bank of India (RBI) on Friday approved a record surplus transfer of 2.87 trillion rupees ($29.99 billion) to the federal government for the 2025-26 financial year, providing crucial fiscal support at a time when rising energy costs and subsidy burdens are straining New Delhi’s finances. The payout surpassed last year’s record transfer of 2.69 trillion rupees, but fell short of market expectations. Economists surveyed by Reuters had projected a dividend between 2.9 trillion and 3.2 trillion rupees, with many investors hoping for a larger transfer to cushion the impact of elevated crude oil prices linked to the Iran conflict. Shortly after the announcement, India’s benchmark 10-year bond yield rose three basis points to 7.1 per cent reflecting concerns that the government may still face pressure on its fiscal deficit. ALSO READ: Oil shock and subsidy burden weigh on finances India, the world’s third-largest importer and consumer of crude oil, has been grappling with the economic fallout from the Middle East conflict. New Delhi typically sources nearly half of its crude imports through the Strait of Hormuz, which has faced severe disruption since the outbreak of the Iran war earlier this year. The government has already reduced federal fuel taxes to shield consumers from rising prices, while fertiliser subsidy costs are also expected to increase amid higher global urea prices. “The RBI surplus transfer is marginally lower than expected, thereby limiting the levers for the government in terms of managing the fiscal slippage risks,” Upasna Bhardwaj, chief economist at Kotak Mahindra Bank, told Reuters. The government had budgeted for 3.16 trillion rupees in combined dividends from the RBI and state-owned financial institutions. ALSO READ: Strong RBI earnings boost payout The central bank said its board approved the surplus transfer after considering “current macroeconomic factors”, financial performance and the “maintenance of appropriate risk buffers”. The RBI’s balance sheet expanded 20.61 per cent to 91.97 trillion rupees as of March 31, 2026. Gross income rose 26.42 per cent, while expenditure increased 27.60 per cent. The RBI lowered its contingency risk buffer to 6.5 per cent of the balance sheet from 7.5 per cent a year earlier, while transferring 1.09 trillion rupees into the reserve buffer. The central bank earns income primarily from foreign securities holdings, including US Treasuries, and through foreign exchange operations. A weakening rupee during the year also contributed to stronger earnings from dollar sales in the open market. The RBI dividend will partially offset higher fertiliser subsidies,” Teresa John of Nirmal Bang Institutional Equities told AFP. “However, the risk of marginal fiscal slippage still remains.”

Economists surveyed by Reuters had projected a dividend between 2.9 trillion and 3.2 trillion rupees, with many investors hoping for a larger transfer to cushion the impact of elevated crude oil prices linked to the Iran conflict.

RBI approves record Rs. 2.87 trillion dividend to government amid rising fiscal pressure

The Reserve Bank of India on Wednesday (May 20) said lenders are prohibited from completely blocking or disabling mobile phones due to non-payment of loans taken to buy the device. Under its draft amendment guidelines, the regulator of the banking sector stated that banks are permitted to take certain steps to restrict certain functionalities of mobile phones if the loan dues are not paid. However, completely disabling or blocking the phone is prohibited. The regulator noted that the rules are applicable only to loans specifically used for mobile phone purchases and not to any other form of borrowing. A 2024 study by Home Credit Finance indicated that buying a phone on loan has become a trend, with more than 1.16 billion mobile connections in India, as per the telecom regulator. Currently, Phones have become essential tools for people in terms of communication, work, and education across the country.&nbsp;Also read: <a href="https://www.wionews.com/business-economy/gold-loans-jump-over-50-yoy-emerge-as-india-s-fastest-growing-retail-credit-segment-crif-1779282417852">Gold loans jump over 50% YoY, emerge as India’s fastest-growing retail credit segment: CRIF</a><h3>RBI barred from accessing personal data</h3>Earlier in 2024, the Reserve Bank of India had directed lenders to stop locking the phones of borrowers who defaulted on repayments. The practice involved installing an application at the time of loan disbursal that could remotely lock the device in case of non-payment. According to sources, the updated guidelines will require lenders to secure prior consent from borrowers before enabling any phone-locking mechanism. They will also be barred from accessing personal data stored on the device. Data from CRIF High Mark showed that loans below Rs 1 lakh carry a higher risk of default. Non-banking lenders account for nearly 85 per cent of consumer durable financing in India, while personal loans now make up almost one-third of the banking system’s total non-food credit, with loans for electronic devices witnessing rapid growth.

Under its draft amendment guidelines, the regulator of the banking sector stated that banks are permitted to take certain steps to restrict certain functionalities of mobile phones if the loan dues are not paid. 

The Reserve Bank of India on Wednesday (May 20) said lenders are prohibited from completely blocking or disabling mobile phones due to non-payment of loans taken to buy the device. Under its draft amendment guidelines, the regulator of the banking sector stated that banks are permitted to take certain steps to restrict certain functionalities of mobile phones if the loan dues are not paid. However, completely disabling or blocking the phone is prohibited. The regulator noted that the rules are applicable only to loans specifically used for mobile phone purchases and not to any other form of borrowing. A 2024 study by Home Credit Finance indicated that buying a phone on loan has become a trend, with more than 1.16 billion mobile connections in India, as per the telecom regulator. Currently, Phones have become essential tools for people in terms of communication, work, and education across the country. Also read: Gold loans jump over 50% YoY, emerge as India’s fastest-growing retail credit segment: CRIF RBI barred from accessing personal data Earlier in 2024, the Reserve Bank of India had directed lenders to stop locking the phones of borrowers who defaulted on repayments. The practice involved installing an application at the time of loan disbursal that could remotely lock the device in case of non-payment. According to sources, the updated guidelines will require lenders to secure prior consent from borrowers before enabling any phone-locking mechanism. They will also be barred from accessing personal data stored on the device. Data from CRIF High Mark showed that loans below Rs 1 lakh carry a higher risk of default. Non-banking lenders account for nearly 85 per cent of consumer durable financing in India, while personal loans now make up almost one-third of the banking system’s total non-food credit, with loans for electronic devices witnessing rapid growth.

Under its draft amendment guidelines, the regulator of the banking sector stated that banks are permitted to take certain steps to restrict certain functionalities of mobile phones if the loan dues are not paid.&nbsp;

Banks cannot completely block, disable phones for unpaid loans, clarifies RBI

The Reserve Bank of India (RBI) has revoked the Certificate of Registration (CoR) of 150 Non-Banking Financial Companies (NBFCs), with the largest share of cancellations involving firms based in Delhi and West Bengal, according to a central bank statement released on Thursday. A review of the RBI’s list found that nearly 67 affected NBFCs were registered in Delhi, while around 75 were based in West Bengal, mainly concentrated in Kolkata and surrounding areas. "The Reserve Bank of India, in exercise of powers conferred on it under Section 45-IA (6) of the Reserve Bank of India Act, 1934, has cancelled the Certificate of Registration of the following companies," the RBI said in its press release.<h3>Cancellations of NBFCs from different states</h3>The cancellations cover several small and medium-sized finance and investment firms involved in activities such as lending, leasing, investments, and other related financial services. Companies from Telangana, Karnataka, Madhya Pradesh, Bihar, and Haryana were also among those impacted. The RBI further said, "As such, the above companies shall not transact the business of a Non-Banking Financial Institution, as defined in clause (a) of Section 45-I of the RBI Act, 1934." NBFCs are financial institutions that offer loans, investment products, and other banking-like services but operate without a banking licence. They are governed by the RBI under the RBI Act. With the cancellation of their registration, these entities are no longer permitted to function as NBFCs or carry out financial activities regulated by the central bank.&nbsp;Also read: <a href="https://www.wionews.com/world/nvidia-h200-china-ai-chip-sale-blocked-1778749708827">Why China blocked Nvidia H200 AI chip sales despite US approval and Trump’s push</a>

NBFCs are financial institutions that are governed by the RBI under the RBI Act. These institutions offer loans, investment products, and other banking-like services but operate without a banking licence. 

The Reserve Bank of India (RBI) has revoked the Certificate of Registration (CoR) of 150 Non-Banking Financial Companies (NBFCs), with the largest share of cancellations involving firms based in Delhi and West Bengal, according to a central bank statement released on Thursday. A review of the RBI’s list found that nearly 67 affected NBFCs were registered in Delhi, while around 75 were based in West Bengal, mainly concentrated in Kolkata and surrounding areas. "The Reserve Bank of India, in exercise of powers conferred on it under Section 45-IA (6) of the Reserve Bank of India Act, 1934, has cancelled the Certificate of Registration of the following companies," the RBI said in its press release. Cancellations of NBFCs from different states The cancellations cover several small and medium-sized finance and investment firms involved in activities such as lending, leasing, investments, and other related financial services. Companies from Telangana, Karnataka, Madhya Pradesh, Bihar, and Haryana were also among those impacted. The RBI further said, "As such, the above companies shall not transact the business of a Non-Banking Financial Institution, as defined in clause (a) of Section 45-I of the RBI Act, 1934." NBFCs are financial institutions that offer loans, investment products, and other banking-like services but operate without a banking licence. They are governed by the RBI under the RBI Act. With the cancellation of their registration, these entities are no longer permitted to function as NBFCs or carry out financial activities regulated by the central bank. Also read: Why China blocked Nvidia H200 AI chip sales despite US approval and Trump’s push

NBFCs are financial institutions that are governed by the RBI under the RBI Act. These institutions offer loans, investment products, and other banking-like services but operate without a banking licence.&nbsp;

RBI revokes registration of 150 NBFCs across country, Delhi and Bengal hit hardest

The Reserve Bank of India’s Monetary Policy Committee (MPC) announced to keep the repo rate unchanged at 5.25 per cent on Wednesday. This marked a second consecutive pause amid rising global tensions in West Asia. The decision taken by the RBI shows a cautious approach because inflation risks have increased amid the global uncertainties, and the apex bank has maintained that domestic growth momentum remains strong and resilient.&nbsp;In another key move, RBI Governor Sanjay Malhotra announced the suspension of due diligence requirements for MSMEs on select trade platforms, aiming to improve ease of doing business.&nbsp;Notably, the repo rate decision came just hours after US President Donald Trump announced a “bilateral ceasefire” with Iran, which sparked a rally in global markets. Indian benchmark indices also opened higher following the development.&nbsp;The Monetary Policy Committee, led by the RBI Governor, convenes every two months to assess key economic indicators and decide on policy direction. The central bank had earlier kept the rate unchanged in its August, October, and February 2026 reviews.<h3>Key highlights of RBI MPC Meeting:</h3><ul><li>Repo rate unchanged at 5.25%; policy stance remains neutral.</li><li>Second consecutive pause after February, following a 25 basis points cut in December 2025.</li><li>Inflation risks rising, with projections revised upward, particularly for FY26 and near-term quarters.</li><li>FY27 CPI inflation forecast at 4.6%, within RBI’s target band.</li><li>Inflation to peak mid-year, projected at 4 per cent in Q1 FY27, rising to 4.4 per cent in Q2, peaking at 5.2 per cent in Q3, and easing to 4.7 per cent in Q4.</li><li>GDP growth outlook improved, FY26 estimate raised to 7.6 per cent from 7.4 per cent earlier.</li><li>FY27 growth projected at 6.9%, with risks tilted downward due to high energy prices and global uncertainties.</li><li>Domestic demand remains strong, driven by services, manufacturing resilience, and healthy balance sheets.</li><li>Private consumption and urban demand are expected to sustain economic momentum.</li><li>Global risks persist, especially due to geopolitical tensions like the US-Iran conflict, affecting supply chains.</li><li>Supply disruptions may fuel inflationary pressures, impacting demand conditions.</li><li>Government support measures on exports and supply chains to cushion external shocks.</li><li>India’s macro fundamentals remain strong, with the RBI emphasising vigilance and a data-driven policy approach.</li></ul>Also read: <a href="https://www.wionews.com/photos/iran-s-10-point-plan-explained-compensation-sanctions-hormuz-and-more-here-s-what-tehran-wants-after-2-week-ceasefire-deal-1775620008012/1775620008013">Iran’s 10-point plan EXPLAINED: Compensation, sanctions, Hormuz and more, here's what Tehran wants after 2-week ceasefire deal</a>

Notably, the repo rate decision came just hours after US President Donald Trump announced a “bilateral ceasefire” with Iran, which sparked a rally in global markets. Indian benchmark indices also opened higher following the development.

The Reserve Bank of India’s Monetary Policy Committee (MPC) announced to keep the repo rate unchanged at 5.25 per cent on Wednesday. This marked a second consecutive pause amid rising global tensions in West Asia. The decision taken by the RBI shows a cautious approach because inflation risks have increased amid the global uncertainties, and the apex bank has maintained that domestic growth momentum remains strong and resilient. In another key move, RBI Governor Sanjay Malhotra announced the suspension of due diligence requirements for MSMEs on select trade platforms, aiming to improve ease of doing business. Notably, the repo rate decision came just hours after US President Donald Trump announced a “bilateral ceasefire” with Iran, which sparked a rally in global markets. Indian benchmark indices also opened higher following the development. The Monetary Policy Committee, led by the RBI Governor, convenes every two months to assess key economic indicators and decide on policy direction. The central bank had earlier kept the rate unchanged in its August, October, and February 2026 reviews. Key highlights of RBI MPC Meeting: Repo rate unchanged at 5.25%; policy stance remains neutral. Second consecutive pause after February, following a 25 basis points cut in December 2025. Inflation risks rising, with projections revised upward, particularly for FY26 and near-term quarters. FY27 CPI inflation forecast at 4.6%, within RBI’s target band. Inflation to peak mid-year, projected at 4 per cent in Q1 FY27, rising to 4.4 per cent in Q2, peaking at 5.2 per cent in Q3, and easing to 4.7 per cent in Q4. GDP growth outlook improved, FY26 estimate raised to 7.6 per cent from 7.4 per cent earlier. FY27 growth projected at 6.9%, with risks tilted downward due to high energy prices and global uncertainties. Domestic demand remains strong, driven by services, manufacturing resilience, and healthy balance sheets. Private consumption and urban demand are expected to sustain economic momentum. Global risks persist, especially due to geopolitical tensions like the US-Iran conflict, affecting supply chains. Supply disruptions may fuel inflationary pressures, impacting demand conditions. Government support measures on exports and supply chains to cushion external shocks. India’s macro fundamentals remain strong, with the RBI emphasising vigilance and a data-driven policy approach. Also read: Iran’s 10-point plan EXPLAINED: Compensation, sanctions, Hormuz and more, here's what Tehran wants after 2-week ceasefire deal

Notably, the repo rate decision came just hours after US President Donald Trump announced a “bilateral ceasefire” with Iran, which sparked a rally in global markets. Indian benchmark indices also opened higher following the development.

RBI holds repo rate steady at 5.25%, sees GDP growth at 6.9%; warns of US-Iran war impact

The Reserve Bank of India (RBI) is expected to keep policy rates unchanged in its upcoming Monetary Policy Committee (MPC) meeting scheduled to be held from April 6 to 8. The development comes amid an increase in global uncertainty triggered by the ongoing West Asia war, according to a report by SBI Research. "As the situation is still evolving, we expect RBI to maintain the status quo in the upcoming policy," the report said. It also highlighted that this will be the first policy meeting since the tensions begin the Gulf region. The report added that the war has turned the entire world into chaos due to disruptions in global energy markets, which has emerged as a major concern. It noted that the de facto blockage of the Strait of Hormuz has severely disrupted the global oil market in its history since 1973.<h3>India is not immune to economic uncertainty</h3>A recent report also warned that India is not immune to the uncertainty of global economic developments. "Rupee is already hovering above 93 per dollar and crude oil is adamant above $100/bbl, resulting in a jump in imported inflation," it said, adding that it could worsen further by a possible Super El Niño, impacting inflation dynamics. Domestically, SBI Research highlighted mounting inflationary pressures, noting that imported inflation has already reached 5.4 per cent and could rise further. It also projected that CPI inflation may stay above 4.5 per cent over the next three quarters. Amid this uncertain environment, the Reserve Bank of India is expected to adopt a cautious tone in its communication, especially as this will be its first policy response since the onset of the war. The report further pointed to external challenges, including strain on the rupee and capital outflows. It noted that FY26 recorded the highest foreign institutional investor (FII) outflows since 1991 at $16.6 billion, while the balance of payments is likely to remain in deficit in FY27. SBI also suggested that, more than policy rates, the central bank may focus on liquidity and market functioning. Further, recent regulatory developments to stabilise the rupee may pose challenges for lenders. "Some of the norms may pose operational challenges for Banks," the report observed, particularly in relation to curbs on speculative positions in currency markets.&nbsp;Also read: <a href="https://www.wionews.com/world/india-confirms-it-is-importing-iranian-crude-and-lpg-1775302997381">India confirms it is importing Iranian crude and LPG</a> &nbsp;

The SBI report indicated that the war has turned the entire world into chaos due to disruptions in global energy markets, which has emerged as a major concern. It also warned that India is not immune to the uncertainty of global economic developments.

The Reserve Bank of India (RBI) is expected to keep policy rates unchanged in its upcoming Monetary Policy Committee (MPC) meeting scheduled to be held from April 6 to 8. The development comes amid an increase in global uncertainty triggered by the ongoing West Asia war, according to a report by SBI Research. "As the situation is still evolving, we expect RBI to maintain the status quo in the upcoming policy," the report said. It also highlighted that this will be the first policy meeting since the tensions begin the Gulf region. The report added that the war has turned the entire world into chaos due to disruptions in global energy markets, which has emerged as a major concern. It noted that the de facto blockage of the Strait of Hormuz has severely disrupted the global oil market in its history since 1973. India is not immune to economic uncertainty A recent report also warned that India is not immune to the uncertainty of global economic developments. "Rupee is already hovering above 93 per dollar and crude oil is adamant above $100/bbl, resulting in a jump in imported inflation," it said, adding that it could worsen further by a possible Super El Niño, impacting inflation dynamics. Domestically, SBI Research highlighted mounting inflationary pressures, noting that imported inflation has already reached 5.4 per cent and could rise further. It also projected that CPI inflation may stay above 4.5 per cent over the next three quarters. Amid this uncertain environment, the Reserve Bank of India is expected to adopt a cautious tone in its communication, especially as this will be its first policy response since the onset of the war. The report further pointed to external challenges, including strain on the rupee and capital outflows. It noted that FY26 recorded the highest foreign institutional investor (FII) outflows since 1991 at $16.6 billion, while the balance of payments is likely to remain in deficit in FY27. SBI also suggested that, more than policy rates, the central bank may focus on liquidity and market functioning. Further, recent regulatory developments to stabilise the rupee may pose challenges for lenders. "Some of the norms may pose operational challenges for Banks," the report observed, particularly in relation to curbs on speculative positions in currency markets. Also read: India confirms it is importing Iranian crude and LPG

The SBI report indicated that the war has turned the entire world into chaos due to disruptions in global energy markets, which has emerged as a major concern. It also warned that India is not immune to the uncertainty of global economic developments.

RBI likely to keep policy rates unchanged in first policy since West Asia war: SBI

The rupee achieved its biggest gain in more than 12 years on April 2, a day after the Reserve Bank of India (RBI) rolled out additional measures to curb currency volatility. The Indian currency surged up to 1.8 per cent to &nbsp;93.53 against the dollar, marking the strongest rise since September 2013, when currency trading resumed after a two-day break. The RBI barred banks from offering rupee non-deliverable forwards to both resident and non-resident clients on April 1. It also directed that companies cannot rebook cancelled foreign exchange derivative contracts. “In the near term, this is likely to trigger unwinding of such positions, reducing artificial demand for dollars and providing support to the rupee, potentially leading to appreciation bias or at least enhanced stability,” said Amit Pabari, managing director at CR Forex Advisory. In over a ten years, FY26 was the worst year for the rupee due to the spike in Brent crude prices and persistent outflows from foreign investors, among others. The currency briefly crossed the key 95-dollar mark on March 30, even as the RBI stepped in to curb banks’ exposure to net open positions in the rupee.<h3>Trump’s warning to Iran</h3>Crude oil prices also jumped around 4 per cent after US President Donald Trump, while addressing the nation, indicated a possible escalation in the Iran war without indicating a timeline to end the war, which is in its second month. While stating that the US had achieved its objectives, Trump warned that the situation could intensify if Iran’s leadership does not agree to American terms in ongoing negotiations, with potential strikes targeting Iran’s energy and oil infrastructure. Following his remarks, Brent crude surged to $106 per barrel. He said the US “does not need the Strait of Hormuz” and asked allies to “grab Hormuz”, indicating the world to buy oil from the US. He added that the US could hit Iran “extremely hard” within weeks, and added that military objectives are about achieved and the war was nearing its end. However, he has not provided any timeline to exit from the Middle East.&nbsp;Also read: <a href="https://www.wionews.com/business-economy/india-has-enough-crude-oil-supply-for-2-months-says-govt-amid-west-asia-crisis-1775067317953">India has enough crude oil supply for 2 months, says govt amid West Asia crisis</a>

The RBI barred banks from offering rupee non-deliverable forwards to both resident and non-resident clients on April 1. It also directed that companies cannot rebook cancelled foreign exchange derivative contracts.

The rupee achieved its biggest gain in more than 12 years on April 2, a day after the Reserve Bank of India (RBI) rolled out additional measures to curb currency volatility. The Indian currency surged up to 1.8 per cent to 93.53 against the dollar, marking the strongest rise since September 2013, when currency trading resumed after a two-day break. The RBI barred banks from offering rupee non-deliverable forwards to both resident and non-resident clients on April 1. It also directed that companies cannot rebook cancelled foreign exchange derivative contracts. “In the near term, this is likely to trigger unwinding of such positions, reducing artificial demand for dollars and providing support to the rupee, potentially leading to appreciation bias or at least enhanced stability,” said Amit Pabari, managing director at CR Forex Advisory. In over a ten years, FY26 was the worst year for the rupee due to the spike in Brent crude prices and persistent outflows from foreign investors, among others. The currency briefly crossed the key 95-dollar mark on March 30, even as the RBI stepped in to curb banks’ exposure to net open positions in the rupee. Trump’s warning to Iran Crude oil prices also jumped around 4 per cent after US President Donald Trump, while addressing the nation, indicated a possible escalation in the Iran war without indicating a timeline to end the war, which is in its second month. While stating that the US had achieved its objectives, Trump warned that the situation could intensify if Iran’s leadership does not agree to American terms in ongoing negotiations, with potential strikes targeting Iran’s energy and oil infrastructure. Following his remarks, Brent crude surged to $106 per barrel. He said the US “does not need the Strait of Hormuz” and asked allies to “grab Hormuz”, indicating the world to buy oil from the US. He added that the US could hit Iran “extremely hard” within weeks, and added that military objectives are about achieved and the war was nearing its end. However, he has not provided any timeline to exit from the Middle East. Also read: India has enough crude oil supply for 2 months, says govt amid West Asia crisis

The RBI barred banks from offering rupee non-deliverable forwards to both resident and non-resident clients on April 1. It also directed that companies cannot rebook cancelled foreign exchange derivative contracts.

Rupee jumps to 93.53 against dollar, logs biggest gain in 12 years amid West Asia war

As the RBI prepares for its December policy meeting, experts say macroeconomic conditions in India give the Central Bank room to ease policy. Consumer price inflation has plummeted sharply, with the October consumer price index hitting a decade's low near 0.25 percent.


All Eyes on Reserve Bank of India's Rate Decision

A report by Union Bank of India has predicted that the Reserve Bank of India's Monetary Policy Committee (MPC) will reduce the policy rates by 25 basis points (bps).&nbsp;The&nbsp;policy announcement is expected on Wednesday.&nbsp;The bank said that such a move will be taken because of the downward trend in inflation. This cut will be a booster cut by the country's apex bank.&nbsp;"Our baseline view is of a 25bps repo rate cut in this meeting. The view is premised on another round of sharp downward revision in inflation projection for FY26," it predicted.&nbsp;The expectation is built on the premise of another sharp downward revision in inflation projections for FY26, with estimates now closer to 2.5 per cent with a downward bias.&nbsp;The revision also factors in the nearly 60 bps impact of the Goods and Services Tax (GST) on inflation.&nbsp;The report said that the move will be aimed as a sentiment booster for the Indian stock markets. It is also called the US Federal Reserve policy decision, a risk management cut.&nbsp;The report also claimed that the RBI might cut at least another 25 bps by December of this year.&nbsp;The bank further said in its report that low inflation, the positive impact of GST reforms, and growth challenges from ongoing tariff wars will prove to be the policy guidance.&nbsp;The Monetary Policy Committee (MPC) of the Reserve Bank of India began its three-day monetary policy rate meeting. The announcement of the monetary policy outcome will be made on October 1.

The Reserve Bank of India's monetary policy meeting: The bank said that such a move will be taken because of the downward trend in inflation. This cut will be a booster cut by the country's apex bank.

A report by Union Bank of India has predicted that the Reserve Bank of India's Monetary Policy Committee (MPC) will reduce the policy rates by 25 basis points (bps). The policy announcement is expected on Wednesday. The bank said that such a move will be taken because of the downward trend in inflation. This cut will be a booster cut by the country's apex bank. "Our baseline view is of a 25bps repo rate cut in this meeting. The view is premised on another round of sharp downward revision in inflation projection for FY26," it predicted. The expectation is built on the premise of another sharp downward revision in inflation projections for FY26, with estimates now closer to 2.5 per cent with a downward bias. The revision also factors in the nearly 60 bps impact of the Goods and Services Tax (GST) on inflation. The report said that the move will be aimed as a sentiment booster for the Indian stock markets. It is also called the US Federal Reserve policy decision, a risk management cut. The report also claimed that the RBI might cut at least another 25 bps by December of this year. The bank further said in its report that low inflation, the positive impact of GST reforms, and growth challenges from ongoing tariff wars will prove to be the policy guidance. The Monetary Policy Committee (MPC) of the Reserve Bank of India began its three-day monetary policy rate meeting. The announcement of the monetary policy outcome will be made on October 1.

The Reserve Bank of India's monetary policy meeting: The bank said that such a move will be taken because of the downward trend in inflation. This cut will be a booster cut by the country's apex bank.

RBI likely to reduce policy rates after the Monetary Policy Meeting: Report

While writing cheques for a high-value payment, it is important for you to know certain things to avoid misuse. To prevent cheque-related frauds, the Reserve Bank of India (RBI) has placed systems – ‘Positive Pay’. It protects the issuer and the receiver. If you are issuing a cheque above ₹5 lakh, there are rules to follow.&nbsp;These rules vary slightly by bank, but they all follow the RBI’s guidelines. The idea is to add an extra layer of confirmation before the money leaves your account. You must share details about the cheque before the receiver presents it for clearing. Ignoring this can lead to the cheque being rejected in certain cases. Let’s understand how it works and what you should do!<h3>What is positive pay and how it work?</h3>The Positive Pay System (PPS) was introduced by the RBI in 2021. It aims to reduce cheque fraud. It asks the person writing the cheque (the issuer) to confirm its key details with the bank. This is done before the cheque is cleared. &nbsp;You must provide information such as the cheque number, issue date, amount and payee name to your bank before the clearance of the cheque. These details are usually sent through your bank’s mobile app, online banking, ATM, or by visiting a branch. Once submitted, these details are cross-checked when the cheque is presented for payment. If there is a mismatch between what you reported and what is on the cheque, the bank will flag it. This protects both the payer and the receiver. It also helps banks detect any unauthorised changes or tampering. This process is mandatory for cheques above Rs 5 lakh. Some banks may allow you to use PPS for lower amounts, but it is not required by the RBI.<h3>What cheque issuers should keep in mind</h3>If you are about to issue a high-value cheque, act carefully. First, make sure all details on the cheque are accurate. Write clearly. Avoid overwriting. Use permanent ink. Sign in the correct space. Then, submit the cheque details through your bank’s Positive Pay facility. Make sure the details match exactly. Even small errors can cause problems, as mismatches can lead to rejection. You must send the information as soon as you issue the cheque. Some banks ask for a time gap between submission and presentation. Check your bank’s rules. If you miss this step, the cheque may bounce even if your account has enough funds.<h3>What happens after submission?</h3>Once you send the cheque details to the bank, the system stores them. When the payee submits the cheque for clearing, the bank compares the information. If everything matches, the cheque goes through. If there is a mismatch, the bank flags it. It may ask the issuer to confirm or reject the payment.&nbsp;&nbsp;This step helps prevent fraud or errors. The clearing process takes a little longer in such cases, but it adds safety. Some banks also send alerts to the issuer when a cheque is presented. This gives you a chance to stop a transaction if it looks suspicious. It is worth checking your bank’s website or mobile app for how to use Positive Pay. They often have a separate option in their services menu. If you are unsure, you can also visit a branch or call customer support. The Positive Pay System adds security but also requires action from the issuer. Make sure to share the cheque details with your bank. Use clear writing. Double-check figures and names. It takes a few extra minutes but saves you from big trouble.&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.)

Before you sign big cheque, check ‘Positive Pay’ rule

While writing cheques for a high-value payment, it is important for you to know certain things to avoid misuse. To prevent cheque-related frauds, the Reserve Bank of India (RBI) has placed systems – ‘Positive Pay’. It protects the issuer and the receiver. If you are issuing a cheque above ₹5 lakh, there are rules to follow. These rules vary slightly by bank, but they all follow the RBI’s guidelines. The idea is to add an extra layer of confirmation before the money leaves your account. You must share details about the cheque before the receiver presents it for clearing. Ignoring this can lead to the cheque being rejected in certain cases. Let’s understand how it works and what you should do! What is positive pay and how it work? The Positive Pay System (PPS) was introduced by the RBI in 2021. It aims to reduce cheque fraud. It asks the person writing the cheque (the issuer) to confirm its key details with the bank. This is done before the cheque is cleared. You must provide information such as the cheque number, issue date, amount and payee name to your bank before the clearance of the cheque. These details are usually sent through your bank’s mobile app, online banking, ATM, or by visiting a branch. Once submitted, these details are cross-checked when the cheque is presented for payment. If there is a mismatch between what you reported and what is on the cheque, the bank will flag it. This protects both the payer and the receiver. It also helps banks detect any unauthorised changes or tampering. This process is mandatory for cheques above Rs 5 lakh. Some banks may allow you to use PPS for lower amounts, but it is not required by the RBI. What cheque issuers should keep in mind If you are about to issue a high-value cheque, act carefully. First, make sure all details on the cheque are accurate. Write clearly. Avoid overwriting. Use permanent ink. Sign in the correct space. Then, submit the cheque details through your bank’s Positive Pay facility. Make sure the details match exactly. Even small errors can cause problems, as mismatches can lead to rejection. You must send the information as soon as you issue the cheque. Some banks ask for a time gap between submission and presentation. Check your bank’s rules. If you miss this step, the cheque may bounce even if your account has enough funds. What happens after submission? Once you send the cheque details to the bank, the system stores them. When the payee submits the cheque for clearing, the bank compares the information. If everything matches, the cheque goes through. If there is a mismatch, the bank flags it. It may ask the issuer to confirm or reject the payment. This step helps prevent fraud or errors. The clearing process takes a little longer in such cases, but it adds safety. Some banks also send alerts to the issuer when a cheque is presented. This gives you a chance to stop a transaction if it looks suspicious. It is worth checking your bank’s website or mobile app for how to use Positive Pay. They often have a separate option in their services menu. If you are unsure, you can also visit a branch or call customer support. The Positive Pay System adds security but also requires action from the issuer. Make sure to share the cheque details with your bank. Use clear writing. Double-check figures and names. It takes a few extra minutes but saves you from big trouble. (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.)

The Positive Pay System (PPS) was introduced by the RBI in 2021. It aims to reduce cheque fraud

A high-stakes alert has been issued by the Ministry of Home Affairs after high-quality counterfeit ₹500 notes were found in circulation.<o:p></o:p>
The fake notes are so close to genuine ones that only a minor typo in &ldquo;Reserve Bank of India&rdquo; offers a clue. These details show how this typo could be the difference between legitimate and fraudulent currency, and what this means for your wallet.<o:p></o:p>
A security alert from the Ministry of Home Affairs has sent shockwaves across financial institutions. Based on intelligence inputs, the MHA has identified a fresh batch of high-quality counterfeit ₹500 notes that have entered the Indian market.<o:p></o:p>
<h2 class="MsoNormal">Security alert over ₹500 notes<o:p></o:p></h2>
Intelligence reports flag near-perfect fakes&mdash;with one critical flaw: the word &ldquo;reserve&rdquo; is misspelt as &ldquo;rsarve&rdquo; on the note. The alert, marked &ldquo;high importance,&rdquo; has been sent to bodies like the DRI, CBI, NIA, and SEBI.<o:p></o:p>
Agencies say detecting these notes is extremely tough, as they look and feel almost genuine. A sample image has been shared for identification, and the public has been urged to report any suspicious cash immediately.<o:p></o:p>
Officials admit the actual volume of fake notes is likely much higher than what's been reported.<o:p></o:p>
In parliament, the government said laws like the Bharatiya Nyaya Sanhita, 2023, Unlawful Activities (Prevention) Act, 1967 and bodies like FICN Coordination group (FCord), and the terror funding and fake currency (TFFC) cell are in place to combat currency fraud.<o:p></o:p>
But the sophistication of this fake batch has renewed calls for vigilance and public awareness.<o:p></o:p>
(With inputs from the agencies)<o:p></o:p>

Business & Economy: A high-stakes alert has been issued by the Ministry of Home Affairs after high-quality counterfeit ₹500 notes were found in circulation.

A high-stakes alert has been issued by the Ministry of Home Affairs after high-quality counterfeit ₹500 notes were found in circulation. The fake notes are so close to genuine ones that only a minor typo in “Reserve Bank of India” offers a clue. These details show how this typo could be the difference between legitimate and fraudulent currency, and what this means for your wallet. A security alert from the Ministry of Home Affairs has sent shockwaves across financial institutions. Based on intelligence inputs, the MHA has identified a fresh batch of high-quality counterfeit ₹500 notes that have entered the Indian market. Security alert over ₹500 notes Intelligence reports flag near-perfect fakes—with one critical flaw: the word “reserve” is misspelt as “rsarve” on the note. The alert, marked “high importance,” has been sent to bodies like the DRI, CBI, NIA, and SEBI. Agencies say detecting these notes is extremely tough, as they look and feel almost genuine. A sample image has been shared for identification, and the public has been urged to report any suspicious cash immediately. Officials admit the actual volume of fake notes is likely much higher than what's been reported. In parliament, the government said laws like the Bharatiya Nyaya Sanhita, 2023, Unlawful Activities (Prevention) Act, 1967 and bodies like FICN Coordination group (FCord), and the terror funding and fake currency (TFFC) cell are in place to combat currency fraud. But the sophistication of this fake batch has renewed calls for vigilance and public awareness. (With inputs from the agencies)

Counterfeit ₹500 alert script for approval

According to minutes of Reserve Bank of India's latest monetary policy meeting, policymakers sought to reduce borrowing costs to protect domestic demand from a potential slowdown caused by the hefty tariffs imposed by U President Donald Trump.&nbsp;
The RBI cut rates by 0.25 per cent and signalled a change in its policy stance to accommodative. That shift in the policy stance signals further rate cuts as the RBI is worried about growth.&nbsp;
The minutes outlined policymakers' focus on growth amid slowing inflation. That suggests more rate cuts in the coming months. Ratings agencies have already lowered India's growth outlook for this year.&nbsp;
<h2>Can RBI help sustain domestic consumption surge?&nbsp;</h2>
While the RBI's response is expected to keep India's status as the fastest-growing major economy intact, easing domestic demand is a cause for concern. The RBI minutes mirrored those concerns, with policymakers pledging to boost growth and demand.&nbsp;
While banks take time before passing on RBI rate cuts, the easing cycle will bring some Relief for Indians grappling with high interest rates on their loans.&nbsp;
The equated monthly instalments, or EMIs on home, car, and personal loans will eventually come down as banks start to cut lending rates.&nbsp;
But will this boost consumer demand? Or will growth take a significant hit from Trump's tariff rhetoric is to be seen.&nbsp;

Business Economy, While banks take time before passing on RBI rate cuts, the easing cycle will bring some Relief for Indians grappling with high interest rates.

According to minutes of Reserve Bank of India's latest monetary policy meeting, policymakers sought to reduce borrowing costs to protect domestic demand from a potential slowdown caused by the hefty tariffs imposed by U President Donald Trump. The RBI cut rates by 0.25 per cent and signalled a change in its policy stance to accommodative. That shift in the policy stance signals further rate cuts as the RBI is worried about growth. The minutes outlined policymakers' focus on growth amid slowing inflation. That suggests more rate cuts in the coming months. Ratings agencies have already lowered India's growth outlook for this year. Can RBI help sustain domestic consumption surge? While the RBI's response is expected to keep India's status as the fastest-growing major economy intact, easing domestic demand is a cause for concern. The RBI minutes mirrored those concerns, with policymakers pledging to boost growth and demand. While banks take time before passing on RBI rate cuts, the easing cycle will bring some Relief for Indians grappling with high interest rates on their loans. The equated monthly instalments, or EMIs on home, car, and personal loans will eventually come down as banks start to cut lending rates. But will this boost consumer demand? Or will growth take a significant hit from Trump's tariff rhetoric is to be seen.

RBI to cut borrowing costs further to protect domestic demand

The Indian rupee has staged a remarkable comeback after hitting an all-time low, thanks to RBI’s strategic intervention. Despite global economic risks and stock market chaos, the currency’s rebound has surprised analysts and investors alike.

Rupee recovers amidst stock market chaos

Rupee stages its strongest comeback in nearly two years

In line with market expectations, the Reserve Bank of India's Monetary Policy Committee (MPC) cut the key repo rate by 0.25 per cent to 6.25 per cent. This is the first rate cut in nearly 5 years and signals a shift in the central bank's policy to aid economic growth. Before this move, the RBI had kept the repo rate steady at 6.5 per cent for 11 straight meetings. RBI also raised India's GDP growth projection to 6.7 per cent from the previous estimate of 6.6 per cent.
<h2>RBI maintains a neutral policy stance</h2>
RBI's newly elected governor, Sanjay Malhotra, expressed optimism in the country's growth outlook, citing moderating inflation as a key factor. RBI also revised its inflation forecast for the next fiscal year to 4.2 per cent. According to Malhotra, rural consumption continues to improve, but urban consumption remains subdued. He emphasised that government policy support remains crucial for sustaining economic momentum. He also hailed the recent tax cuts announced in the budget as a major boost to household consumption.
<h2>Markets react with caution</h2>
Indian markets saw a muted response despite the rate cut. Investors also reacted to the moderate growth outlook for the next fiscal year. Analysts cite concerns over global economic uncertainty and domestic consumption trends as major factors that continue to weigh on sentiment.&nbsp;
Adhil Shetty, CEO of Bankbazaar.com reacted to the rate cut and said, 'The repo rate cut after 2 years is hugely welcome, and we congratulate Governor Malhotra on beginning his term with a bang. With the tax rate cuts earlier this month, the salaried and the middle class have received a double boost to tackle inflation and boost household savings.&nbsp;
He further explained, 'If you have a 20-year home loan at a rate of 8.75 per cent and had paid 12 EMIs by March, with a rate cut of 25 bps kicking in from April, your interest savings will improve by ₹8417 per lakh. For example, on a loan of ₹50 lakh, you&rsquo;ll save ₹4.20 lakh at this rate, with 10 EMIs being shaved off the loan tenure, all other parameters remaining constant.'
BankBazaar recommends that, 'borrowers with good credit scores seek more aggressive payment options like refinancing to a rate lower by 50 bps or more. If they keep the EMI constant with a lower rate &mdash; let&rsquo;s say 8.25 per cent &mdash; they will secure per-lakh savings of ₹14,480 over the remaining tenor. These savings of nearly 15 per cent per lakh are substantial. Assuming the rate kicks in from April 1 after 12 EMIs of this loan have been paid, we get per-lakh interest savings of ₹3002 from the rest of the year. On a loan of ₹50 lakh, this implies savings of ₹1.50 lakh for the second year of the loan. Now, if we see these savings in the backdrop of additional savings from income tax slab hikes, a salaried individual can have substantial gains for FY25-25. For instance, A salaried person with a gross income of ₹25 lakh and a home loan of ₹50 lakh (20 years, 9%, 12 EMIs paid by March 2025) can hope to save a total of ₹1.37 lakh in FY2025-26 or ₹11,461 per month. This will be through a combination of interest savings on the home loan rate reduction of 25 BPS and the tax savings from higher tax slabs from April 1.'

Business & Economy, Before this move, the RBI had kept the repo rate steady at 6.5 per cent for 11 straight meetings. RBI also raised India's GDP growth projection.

In line with market expectations, the Reserve Bank of India's Monetary Policy Committee (MPC) cut the key repo rate by 0.25 per cent to 6.25 per cent. This is the first rate cut in nearly 5 years and signals a shift in the central bank's policy to aid economic growth. Before this move, the RBI had kept the repo rate steady at 6.5 per cent for 11 straight meetings. RBI also raised India's GDP growth projection to 6.7 per cent from the previous estimate of 6.6 per cent. RBI maintains a neutral policy stance RBI's newly elected governor, Sanjay Malhotra, expressed optimism in the country's growth outlook, citing moderating inflation as a key factor. RBI also revised its inflation forecast for the next fiscal year to 4.2 per cent. According to Malhotra, rural consumption continues to improve, but urban consumption remains subdued. He emphasised that government policy support remains crucial for sustaining economic momentum. He also hailed the recent tax cuts announced in the budget as a major boost to household consumption. Markets react with caution Indian markets saw a muted response despite the rate cut. Investors also reacted to the moderate growth outlook for the next fiscal year. Analysts cite concerns over global economic uncertainty and domestic consumption trends as major factors that continue to weigh on sentiment. Adhil Shetty, CEO of Bankbazaar.com reacted to the rate cut and said, 'The repo rate cut after 2 years is hugely welcome, and we congratulate Governor Malhotra on beginning his term with a bang. With the tax rate cuts earlier this month, the salaried and the middle class have received a double boost to tackle inflation and boost household savings. He further explained, 'If you have a 20-year home loan at a rate of 8.75 per cent and had paid 12 EMIs by March, with a rate cut of 25 bps kicking in from April, your interest savings will improve by ₹8417 per lakh. For example, on a loan of ₹50 lakh, you’ll save ₹4.20 lakh at this rate, with 10 EMIs being shaved off the loan tenure, all other parameters remaining constant.' BankBazaar recommends that, 'borrowers with good credit scores seek more aggressive payment options like refinancing to a rate lower by 50 bps or more. If they keep the EMI constant with a lower rate — let’s say 8.25 per cent — they will secure per-lakh savings of ₹14,480 over the remaining tenor. These savings of nearly 15 per cent per lakh are substantial. Assuming the rate kicks in from April 1 after 12 EMIs of this loan have been paid, we get per-lakh interest savings of ₹3002 from the rest of the year. On a loan of ₹50 lakh, this implies savings of ₹1.50 lakh for the second year of the loan. Now, if we see these savings in the backdrop of additional savings from income tax slab hikes, a salaried individual can have substantial gains for FY25-25. For instance, A salaried person with a gross income of ₹25 lakh and a home loan of ₹50 lakh (20 years, 9%, 12 EMIs paid by March 2025) can hope to save a total of ₹1.37 lakh in FY2025-26 or ₹11,461 per month. This will be through a combination of interest savings on the home loan rate reduction of 25 BPS and the tax savings from higher tax slabs from April 1.'

RBI cuts repo rate to 6.25%, first cut in 5 years

The Indian rupee is set to become more volatile as the Reserve Bank of India’s new governor loosens control over the partially convertible currency as a rampant US dollar exerts relentless downward pressure, a Reuters poll found.

Rupee set for volatile ride as RBI eases control

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Come February 1 and no Unified Payments Interface (UPI) payment app can use special characters for generating transaction IDs. If you are using any such UPI app which uses special characters in the transaction ID, then the transaction will be declined by the central system.<span class="EOP SCXW53113399 BCX0" data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}">&nbsp;
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The National Payments Corporation of India, a public sector company that operates retail payments and settlement systems in the country, has come out with a new set of guidelines for UPI <a href="https://www.wionews.com/tags/transactions">transactions</a>. The guidelines will come into effect February 1&nbsp;onwards.<span class="EOP SCXW53113399 BCX0" data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}">&nbsp;
<span class="EOP SCXW53113399 BCX0" data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}">Also Read: <a href="https://www.wionews.com/india-news/pm-modis-early-us-visit-in-the-works-tahawwur-ranas-to-be-extradited-to-india-soon-mea-8678389">PM Modi&rsquo;s early US visit in the works; Tahawwur Rana&rsquo;s to be extradited to India soon: MEA</a> According to an UPI circular dated January 9, 2025, &ldquo;Reference may be taken from our OC 193 dated 28th March 2024 wherein UPI ecosystem players were&nbsp;advised to use only alphanumeric characters for generating UPI transaction ID. This is to ensure compliance with UPI technical specifications. We have been working with the ecosystem to improve compliance, though the issue has been largely resolved, it is observed that a few of the participants continue to be non-compliant. Considering the criticality of compliance to the specifications, it has been decided not to allow any special characters in UPI transaction ID. Any&nbsp;transaction with&nbsp;ID containing special characters shall be declined by the central system. This shall be effective from Feb 1.&rdquo;<span class="EOP SCXW53113399 BCX0" data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}">&nbsp;
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<h2 class="Paragraph SCXW53113399 BCX0" lang="EN-US" paraid="566206348" paraeid="{2bfcda95-ae43-438a-a5f5-c2c12d4681d5}{143}">What are the special characters?<span class="EOP SCXW53113399 BCX0" data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}">&nbsp;</h2>
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Special characters are any characters that are not part of the standard 26-letter alphabet or numbers 0-9. They include punctuation marks, accent marks, and other symbols like #, @, $, or *.<span class="EOP SCXW53113399 BCX0" data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}">&nbsp;
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<h2 class="Paragraph SCXW53113399 BCX0" lang="EN-US" paraid="1650391996" paraeid="{7fbb50ff-41f8-4731-825f-33f0a3a1f87b}{50}">UPIs growing popularity and security concerns<span class="EOP SCXW53113399 BCX0" data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}">&nbsp;</h2>
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As per <a href="https://www.wionews.com/tags/reserve-bank-of-india">RBI</a>&rsquo;s payment system report, UPI has been the most significant contributor to the growth of digital payments in <a href="https://www.wionews.com/tags/india">India</a>. It is also evident from the fact that the share of the UPI in India has risen from 34% in 2019 to 83% in 2024, with a remarkable CAGR (cumulative average growth rate) of 74% per cent over the last five years.<span class="EOP SCXW53113399 BCX0" data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}">&nbsp;
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Although most banks and payment platforms have already implemented this change, those who have not updated their IDs, must do so before the deadline.<span class="EOP SCXW53113399 BCX0" data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}">&nbsp;
<span class="EOP SCXW53113399 BCX0" data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}">(With inputs from agencies)
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Business & Economy: Special characters are any characters that are not part of the 26-letter alphabet or numbers 0-9. They include punctuation marks, accent marks, & other symbols

Come February 1 and no Unified Payments Interface (UPI) payment app can use special characters for generating transaction IDs. If you are using any such UPI app which uses special characters in the transaction ID, then the transaction will be declined by the central system. The National Payments Corporation of India, a public sector company that operates retail payments and settlement systems in the country, has come out with a new set of guidelines for UPI transactions. The guidelines will come into effect February 1 onwards. Also Read: PM Modi’s early US visit in the works; Tahawwur Rana’s to be extradited to India soon: MEA According to an UPI circular dated January 9, 2025, “Reference may be taken from our OC 193 dated 28th March 2024 wherein UPI ecosystem players were advised to use only alphanumeric characters for generating UPI transaction ID. This is to ensure compliance with UPI technical specifications. We have been working with the ecosystem to improve compliance, though the issue has been largely resolved, it is observed that a few of the participants continue to be non-compliant. Considering the criticality of compliance to the specifications, it has been decided not to allow any special characters in UPI transaction ID. Any transaction with ID containing special characters shall be declined by the central system. This shall be effective from Feb 1.” What are the special characters? Special characters are any characters that are not part of the standard 26-letter alphabet or numbers 0-9. They include punctuation marks, accent marks, and other symbols like #, @, $, or *. UPIs growing popularity and security concerns As per RBI’s payment system report, UPI has been the most significant contributor to the growth of digital payments in India. It is also evident from the fact that the share of the UPI in India has risen from 34% in 2019 to 83% in 2024, with a remarkable CAGR (cumulative average growth rate) of 74% per cent over the last five years. Although most banks and payment platforms have already implemented this change, those who have not updated their IDs, must do so before the deadline. (With inputs from agencies)

UPI alert: IDs with these characters will be blocked from tomorrow—What you need to know

The Reserve Bank of India (RBI) received a threatening email in Russian language on Thursday (Dec 12), calling for ‘blowing up’ its headquarters in Mumbai. The email was sent to the official email ID of RBI Governor Sanjay Malhotra. Mumbai police later filed an FIR in the case against the sender and have launched an investigation.

A Mumbai police officer later said, “A threatening email was received on the official website of the Reserve Bank of India. The email was in Russian and warned to blow up the bank. A case has been registered against an unknown accused in Mata Ramabai Marg (MRA Marg) police station. An investigation into the matter is underway".

Also read:&nbsp;<a data-ved="2ahUKEwjur5_7iaSKAxXliK8BHUDhHLQQxfQBKAB6BAgHEAE" href="https://www.wionews.com/business-economy/sanjay-malhotra-replaces-shaktikanta-das-as-the-new-rbi-chief-782845" jsname="YKoRaf" ping="/url?sa=t&amp;source=web&amp;rct=j&amp;opi=89978449&amp;url=https://www.wionews.com/business-economy/sanjay-malhotra-replaces-shaktikanta-das-as-the-new-rbi-chief-782845&amp;ved=2ahUKEwjur5_7iaSKAxXliK8BHUDhHLQQxfQBKAB6BAgHEAE">New RBI governor faces inflation and growth balancing act</a>

According to media reports, investigators are checking whether the sender used a Virtual Private Network (VPN) to send the email, which was received just days after Malhotra took charge as the 26th governor of the RBI, replacing Shaktikanta Das.

Also read:&nbsp;<a data-ved="2ahUKEwjur5_7iaSKAxXliK8BHUDhHLQQxfQBKAB6BAgLEAE" href="https://www.wionews.com/business-economy/sanjay-malhotra-appointed-as-next-governor-of-indias-central-bank-rbi-782696" jsname="YKoRaf" ping="/url?sa=t&amp;source=web&amp;rct=j&amp;opi=89978449&amp;url=https://www.wionews.com/business-economy/sanjay-malhotra-appointed-as-next-governor-of-indias-central-bank-rbi-782696&amp;ved=2ahUKEwjur5_7iaSKAxXliK8BHUDhHLQQxfQBKAB6BAgLEAE">Revenue Secretary Sanjay Malhotra appointed governor of India`s central bank RBI</a>

This comes after the RBI’s Mumbai customer care centre last month received a similar threat call from a man claiming to be “the CEO” of Pak-based terror outfit Lashkar-e-Taiba. The matter was immediately brought to Mumbai police’s attention. Nothing suspicious was found following thorough checks and searches.

(With inputs from agencies)

The Reserve Bank of India (RBI) received a threatening email in Russian language on Thursday (Dec 12), calling for ‘blowing up’ its headquarters in Mumbai. The email was sent to the official email ID of RBI Governor Sanjay Malhotra.

The Reserve Bank of India (RBI) received a threatening email in Russian language on Thursday (Dec 12), calling for ‘blowing up’ its headquarters in Mumbai. The email was sent to the official email ID of RBI Governor Sanjay Malhotra. Mumbai police later filed an FIR in the case against the sender and have launched an investigation. A Mumbai police officer later said, “A threatening email was received on the official website of the Reserve Bank of India. The email was in Russian and warned to blow up the bank. A case has been registered against an unknown accused in Mata Ramabai Marg (MRA Marg) police station. An investigation into the matter is underway". Also read: New RBI governor faces inflation and growth balancing act According to media reports, investigators are checking whether the sender used a Virtual Private Network (VPN) to send the email, which was received just days after Malhotra took charge as the 26th governor of the RBI, replacing Shaktikanta Das. Also read: Revenue Secretary Sanjay Malhotra appointed governor of India`s central bank RBI This comes after the RBI’s Mumbai customer care centre last month received a similar threat call from a man claiming to be “the CEO” of Pak-based terror outfit Lashkar-e-Taiba. The matter was immediately brought to Mumbai police’s attention. Nothing suspicious was found following thorough checks and searches. (With inputs from agencies)

‘Will blow you up,’ RBI’s Mumbai headquarters receives bomb threat in Russian language

India's Revenue Secretary Sanjay Malhotra will be the next governor of the Reserve Bank of India (RBI), the central government said in a notification on Monday (Dec.

India's Revenue Secretary Sanjay Malhotra will be the next governor of the Reserve Bank of India (RBI), the central government said in a notification on Monday (Dec. 9). The notification said that Malhotra will be the RBI governor for three years starting from Wednesday (December 11). He would be replacing Shaktikanta Das, whose tenure comes to an end on Tuesday. Malhotra will be the 26th governor of the RBI. Who is Sanjay Malhotra? Sanjay Malhotra is an officer of the Indian Administrative Services (IAS). He is a 1990 Batch Rajasthan Cadre IAS Officer. Malhotra did his undergraduate studies in computer science engineering at the prestigious Indian Institute of Technology (IIT), Kanpur. Appointments Committee of the Cabinet has appointed Revenue Secretary Sanjay Malhotra as the next Governor of the Reserve Bank of India for a three-year term from 11.12.2024 pic.twitter.com/4UfunEGEuH — ANI (@ANI) December 9, 2024 × Following this, he pursued a master's degree in public policy from Princeton University in the United States (US). Malhotra, a 1990 batch IAS officer from the Rajasthan cadre, has been serving as the revenue secretary since December 2022. A report by Business Today said that as revenue secretary, Malhotra played an important role in formulating tax policies for both direct and indirect taxes. He had also served as the ex-officio secretary of the GST (Goods and Services Tax) Council, the body responsible for managing the GST framework in the country. The outgoing RBI Governor, Shaktikanta Das, was appointed in 2018, succeeding Urjit Patel. (With inputs from agencies)

Revenue Secretary Sanjay Malhotra appointed governor of India's central bank RBI

The Reserve Bank of India, in a fine balancing act between boosting growth and reigning in inflation, came up with several measures on Friday. This comes amid high inflation and a shocking slowdown in the economic growth of the country in the previous quarter.&nbsp;

The RBI kept its key repo rate unchanged for the eleventh consecutive time at 6.5 per cent. The central bank, though, cut the Cash Reserve Ratio, or the CRR, which is a percentage of money parked with the RBI that banks lend.&nbsp;

This was the first cut to CRR since April 2020 and was made to infuse more liquidity into the system through bank lending. The raised its inflation forecast for this year to 4.8 per cent from 4.5 per cent previously. At the same time, the central bank cut its growth projections 6.6 per cent from the earlier 7.2 per cent.&nbsp;

However, despite lowering the growth outlook, RBI governor Shaktikanta Das said the slowdown had already bottomed out in the September quarter. Das said the near-term inflation had turned adverse since October, citing high food price pressures. As such, the RBI maintained its neutral policy stance again.&nbsp;

Adhil Shetty, Co-Founder and CEO of Bankbazaar.com, calling RBI's decision a fine job of balancing inflation controls with economic growth, said, "The RBI cutting the CRR by 50 BPS for the first time since April 2020 signals the direction of monetary policy. And while key policy rates are unchanged for the 11th straight time, the stars are aligning for a potential rate cut in February. Shetty added, "We still need to look at the global trends as inflation remains volatile. The RBI has done a fine job of balancing inflation controls with economic growth."&nbsp;

In other measures, the RBI increased the deposit ceiling for non-resident Indians to support a record-weak rupee. Despite the Rupee's fall to repeated all-time lows, Das said the currency remains stable compared to the country's emerging market peers against a resurgent Dollar.&nbsp;

To further develop the interest rate derivatives market in India and improve the credibility of interest rate benchmarks, the reserve bank proposes to introduce a new benchmark - the Secured Overnight Rupee Rate (SORR). This is based on all secured money market transactions.&nbsp;

RBI governor Das also said central banks were put to test amid geopolitical tensions and financial market volatility over the last year. However, he said the health of the financial sector was at its best, with the financial parameters of banks and NBFCS pointing to strength and resilience.&nbsp;

Separately, the governor announced that the RBI will set up a committee of experts to suggest a framework for the responsible and ethical use of artificial intelligence.&nbsp;

The Reserve Bank of India, in a fine balancing act between boosting growth and reigning in inflation, came up with several measures on Friday. This comes amid high inflation and a shocking slowdown in the economic growth of the country in the previous quarter.

The Reserve Bank of India, in a fine balancing act between boosting growth and reigning in inflation, came up with several measures on Friday. This comes amid high inflation and a shocking slowdown in the economic growth of the country in the previous quarter. The RBI kept its key repo rate unchanged for the eleventh consecutive time at 6.5 per cent. The central bank, though, cut the Cash Reserve Ratio, or the CRR, which is a percentage of money parked with the RBI that banks lend. This was the first cut to CRR since April 2020 and was made to infuse more liquidity into the system through bank lending. The raised its inflation forecast for this year to 4.8 per cent from 4.5 per cent previously. At the same time, the central bank cut its growth projections 6.6 per cent from the earlier 7.2 per cent. However, despite lowering the growth outlook, RBI governor Shaktikanta Das said the slowdown had already bottomed out in the September quarter. Das said the near-term inflation had turned adverse since October, citing high food price pressures. As such, the RBI maintained its neutral policy stance again. Adhil Shetty, Co-Founder and CEO of Bankbazaar.com, calling RBI's decision a fine job of balancing inflation controls with economic growth, said, "The RBI cutting the CRR by 50 BPS for the first time since April 2020 signals the direction of monetary policy. And while key policy rates are unchanged for the 11th straight time, the stars are aligning for a potential rate cut in February. Shetty added, "We still need to look at the global trends as inflation remains volatile. The RBI has done a fine job of balancing inflation controls with economic growth." In other measures, the RBI increased the deposit ceiling for non-resident Indians to support a record-weak rupee. Despite the Rupee's fall to repeated all-time lows, Das said the currency remains stable compared to the country's emerging market peers against a resurgent Dollar. To further develop the interest rate derivatives market in India and improve the credibility of interest rate benchmarks, the reserve bank proposes to introduce a new benchmark - the Secured Overnight Rupee Rate (SORR). This is based on all secured money market transactions. RBI governor Das also said central banks were put to test amid geopolitical tensions and financial market volatility over the last year. However, he said the health of the financial sector was at its best, with the financial parameters of banks and NBFCS pointing to strength and resilience. Separately, the governor announced that the RBI will set up a committee of experts to suggest a framework for the responsible and ethical use of artificial intelligence.

RBI keeps key policy rate unchanged for the 11th consecutive time

Nirmala Sitharaman’s views on India's economic outlook differ from the RBI’s stance on interest rates, highlighting a divergence in policy approaches.

Nirmala Sitharaman's Views Contrast With RBI's Rate Path Outlook

India's growth outlook is supported by robust domestic engines and private investment showing some encouraging signs despite geopolitical tensions, the Reserve Bank of India's (RBI’s) October bulletin said as detailed in a report by the Press Trust of India.

The global economy remained resilient in the first half of 2024, with declining inflation supporting household spending. Stable growth momentum amid monetary policy easing is becoming the prevailing theme across most economies, according to an article on 'State of the Economy' published in the bulletin that was released on October 21.

The article further stated that as per its economic activity index (EAI), the gross domestic product (GDP) growth is projected at 6.8 per cent in the July-September 2024 quarter, lower than the RBI’s projection of 7 per cent for the same period.

Whereas, in the quarter ended June 2024, the real GDP growth slipped to a five-quarter low of 6.7 per cent due to slower growth in agriculture, government spending and services. "In spite of geopolitical tensions, India’s growth outlook is supported by robust domestic engines," it said, the PTI report detailed&nbsp;further.

It also noted that some high-frequency indicators have, however, shown a slackening of momentum in the second quarter of 2024-25, partly attributable to factors like unusually heavy rains in August and September.

"Looking ahead, private investment is showing some encouraging signs in terms of lead indicators while consumption spending is shaping up for a festival season revival," said the article authored by a team led by RBI deputy governor Michael Debabrata Patra.

After remaining below target for two consecutive months, inflation surged in September, as an adverse statistical base effect was compounded by a resurgence in food price momentum. The central bank said the views expressed in the Bulletin article are of the authors and do not represent the views of the Reserve Bank of India.

Focus on the private sector<o:p></o:p>

“The stage is set for the private sector to deploy capital and invest in growth, build capacities, create employment and improve efficiencies,” the article stated.

It further said that with the financial sector ready to intermediate resources for productive investment, buffered by healthy balance sheets, and the government’s continued thrust on capex, the investment outlook appears bright.<o:p></o:p>

“The ongoing strengthening of global trade could provide a fillip to external demand for India’s exports although escalation of geopolitical tensions remains a potential threat,” the article also stated.

India's growth outlook is supported by robust domestic engines and private investment showing some encouraging signs despite geopolitical tensions, the Reserve Bank of India's (RBI’s) October bulletin said as detailed in a report by the Press Trust of India.

India's growth outlook is supported by robust domestic engines and private investment showing some encouraging signs despite geopolitical tensions, the Reserve Bank of India's (RBI’s) October bulletin said as detailed in a report by the Press Trust of India. The global economy remained resilient in the first half of 2024, with declining inflation supporting household spending. Stable growth momentum amid monetary policy easing is becoming the prevailing theme across most economies, according to an article on 'State of the Economy' published in the bulletin that was released on October 21. The article further stated that as per its economic activity index (EAI), the gross domestic product (GDP) growth is projected at 6.8 per cent in the July-September 2024 quarter, lower than the RBI’s projection of 7 per cent for the same period. Whereas, in the quarter ended June 2024, the real GDP growth slipped to a five-quarter low of 6.7 per cent due to slower growth in agriculture, government spending and services. "In spite of geopolitical tensions, India’s growth outlook is supported by robust domestic engines," it said, the PTI report detailed further. It also noted that some high-frequency indicators have, however, shown a slackening of momentum in the second quarter of 2024-25, partly attributable to factors like unusually heavy rains in August and September. "Looking ahead, private investment is showing some encouraging signs in terms of lead indicators while consumption spending is shaping up for a festival season revival," said the article authored by a team led by RBI deputy governor Michael Debabrata Patra. After remaining below target for two consecutive months, inflation surged in September, as an adverse statistical base effect was compounded by a resurgence in food price momentum. The central bank said the views expressed in the Bulletin article are of the authors and do not represent the views of the Reserve Bank of India. Focus on the private sector “The stage is set for the private sector to deploy capital and invest in growth, build capacities, create employment and improve efficiencies,” the article stated. It further said that with the financial sector ready to intermediate resources for productive investment, buffered by healthy balance sheets, and the government’s continued thrust on capex, the investment outlook appears bright. “The ongoing strengthening of global trade could provide a fillip to external demand for India’s exports although escalation of geopolitical tensions remains a potential threat,” the article also stated.

Robust domestic engines supporting India's growth outlook: RBI Bulletin