The Reserve Bank of India (RBI) on Friday announced the withdrawal of the ₹2,000 denomination notes from circulation, advised people to exchange or deposit the notes by September 30.

India's Rs. 2000 note ban results in social media circus

Amid the kerfuffle surrounding the withdrawal of Rs 2,000 notes from circulation, Reserve Bank of India Governor Shaktikanta Das on Monday explained why such a decision was taken.&nbsp;Das asserted the currency continues to be a legal tender, adding that decision was part of the central bank's currency management exercise.&nbsp;&nbsp;

"Let me clarify and re-emphasise that it is a part of the currency management operations of the Reserve Bank..for a long time, the Reserve Bank has been following a clean note policy," said Das.&nbsp;

"From time to time, RBI withdraws notes of a particular series and issues fresh notes...we are withdrawing the Rs 2000 notes from circulation but they continue as legal tender."

The RBI governor added that&nbsp;the September deadline had been granted so that the "process will be taken seriously".

Das emphasised&nbsp;that Rs 2,000 notes were primarily issued in circulation to quickly replenish the value of money which was being taken out from the system.

The RBI governor was referring to the 'demonetisation' process initiated in 2016 by the central bank where old Rs 1,000 and Rs 500 notes were taken out of the system.&nbsp;

<a href="https://www.wionews.com/videos/state-bank-of-india-no-identity-proof-needed-to-exchange-2000-note-594920">WATCH |&nbsp;State Bank of India: No identity proof needed to exchange 2000-note</a>

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/state-bank-of-india-no-identity-proof-needed-to-exchange-2000-note-594920/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>
</div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

&nbsp;

<h2>How to exchange&nbsp;the currency?</h2>

Apart from banks exchanging the notes, the facility for the same up to Rs 20,000 limit&nbsp;will also be provided at the 19 Regional Offices (ROs) of the RBI, starting May 23, said a press release issued by India's central bank.

“The exchange facility for Rs 2,000 banknotes up to Rs 20,000 at a time would be available from May 23,” the RBI said in a statement, advising the banks to stop issuing Rs 2,000 denomination banknotes with immediate effect.

<a href="https://www.wionews.com/india-news/indias-central-bank-rbi-stops-circulation-of-rs-2000-currency-594168">ALSO READ |&nbsp;India’s central bank RBI withdraws Rs 2,000 currency note from circulation</a>

The 2,000 banknotes had been dwindling in circulation for the past few years. According to the finance ministry's report tabled in Parliament in December 2022,&nbsp;the notes of Rs 2000 denomination in terms of value to the total notes in circulation dipped from 22.6 per cent (March 31, 2020) to 13.8 per cent at the end of March 31, 2022.

(With inputs from agencies)

WATCH WION LIVE HERE:&nbsp;

<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="350" loading="”lazy”" src="https://www.wionews.com/live-tv/embed?autoplay=1&amp;mute=1" width="100%"></iframe>

Amid the kerfuffle surrounding the withdrawal of Rs 2,000 notes from circulation, Reserve Bank of India Governor Shaktikanta Das on Monday explained why such a decision was taken.

Amid the kerfuffle surrounding the withdrawal of Rs 2,000 notes from circulation, Reserve Bank of India Governor Shaktikanta Das on Monday explained why such a decision was taken. Das asserted the currency continues to be a legal tender, adding that decision was part of the central bank's currency management exercise. "Let me clarify and re-emphasise that it is a part of the currency management operations of the Reserve Bank..for a long time, the Reserve Bank has been following a clean note policy," said Das. "From time to time, RBI withdraws notes of a particular series and issues fresh notes...we are withdrawing the Rs 2000 notes from circulation but they continue as legal tender." The RBI governor added that the September deadline had been granted so that the "process will be taken seriously". Das emphasised that Rs 2,000 notes were primarily issued in circulation to quickly replenish the value of money which was being taken out from the system. The RBI governor was referring to the 'demonetisation' process initiated in 2016 by the central bank where old Rs 1,000 and Rs 500 notes were taken out of the system. WATCH | State Bank of India: No identity proof needed to exchange 2000-note × How to exchange the currency? Apart from banks exchanging the notes, the facility for the same up to Rs 20,000 limit will also be provided at the 19 Regional Offices (ROs) of the RBI, starting May 23, said a press release issued by India's central bank. “The exchange facility for Rs 2,000 banknotes up to Rs 20,000 at a time would be available from May 23,” the RBI said in a statement, advising the banks to stop issuing Rs 2,000 denomination banknotes with immediate effect. ALSO READ | India’s central bank RBI withdraws Rs 2,000 currency note from circulation The 2,000 banknotes had been dwindling in circulation for the past few years. According to the finance ministry's report tabled in Parliament in December 2022, the notes of Rs 2000 denomination in terms of value to the total notes in circulation dipped from 22.6 per cent (March 31, 2020) to 13.8 per cent at the end of March 31, 2022. (With inputs from agencies) WATCH WION LIVE HERE:

'Clean note policy': RBI governor explains decision to withdraw Rs 2,000 notes

India's Central Bank, Reserve Bank of India (RBI),decided to keep the interest rates unchanged contrary to market expectations for a 0.25% hike. The RBI left its key lending rate on hold at 6.5%.

India's Central Bank pauses on rate hikes; RBI on standby mode | India News | WION

RBI keeps repo rate unchanged: On Thursday, India's central bank, the Reserve Bank of India (RBI) finally applied the brakes on increasing the repo rate by keeping it unchanged at 6.

RBI keeps repo rate unchanged: On Thursday, India's central bank, the Reserve Bank of India (RBI) finally applied the brakes on increasing the repo rate by keeping it unchanged at 6.5 per cent. The pause came after the central bank had announced six hikes since May last year to a cumulative 250 basis points. Presiding over the RBI Monetary Policy Committee (MPC) meeting, RBI Governor Shaktikanta Das said although the repo rate was unchanged, it could be altered should the situation warrant so. “While we have kept the policy rate unchanged, this decision was taken based on our assessment of the macroeconomic and financial conditions with reference to information available up to today,” Das told the reporters after the meeting. “Overall inflation is above the target and the current policy rate still remains accommodative. It is now necessary to evaluate the action of past rate hikes." WATCH | Is the Indian Rupee challenging the Dollar's dominance in global trade? × India's central bank is wary of the rising uncertainty in international markets and inflation pressures. It has projected the inflation to stand at 5.1 per cent and 5.4 per cent in Q1, Q2 respectively. Notably, worried due to the global indicators and increasing inflation, the MPC last year in an unscheduled meeting in May raised rates for the first time by 40 basis points. The trend continued in June, August and September when the committee increased repo rates by a combined 150 points. The last two hikes came in December 2022 and February 2023 with MPC hiking the rates by 35 basis points and 25 basis points respectively. ALSO READ | RBI hikes repo rate by 25 bps in Monetary Policy 2023: What is repo rate, reverse repo rate & monetary policy? What is repo rate? When commercial banks loan by selling their securities to the central bank, the RBI charges them an interest rate. This interest rate is called the repo rate in the monetary policy. Lower interest rates make it easier for individuals and businesses to borrow money to invest in new economic activities. India Inc cheers RBI, terms decision ‘prudent’ move Meanwhile, Indian industry cheered RBI’s stance of keeping the key interest rate unchanged, terming it a "prudent" move in the wake of headwinds emanating from global banking stress. The industry honchos said the move will improve business sentiments by containing the rise in borrowing costs. Industry bodies cautioned that any further hike in the benchmark repo rate at this juncture would have affected India's economic growth even as domestic demand impulses remain healthy. "The industry body agrees with the central bank's observation that the lagged impact of the past rate hikes should be allowed to percolate into the system, and not stifle demand by further rate hikes," said CII president Sanjiv Bajaj. The market sentiment was also buoyed by the RBI announcement and the Sensex closed up by 143 points at 59,832, while the Nifty settled at 17,599 at the end of the day's trade. (With inputs from agencies) WATCH WION LIVE HERE:

RBI applies brakes on repo rate hike, keeps it unchanged at 6.5%

The Reserve Bank of India (RBI) hiked its key interest rate, the repo rate, by 25 basis points on Wednesday and lowered its growth and inflation projections.

The repo rate is the interest banks pay to borrow from the central bank, and an increase in that rate makes banks raise their lending charges.

The latest is the sixth consecutive rate hike, taking the RBI's key rate to 6.50 per cent.

In all, the RBI has raised the benchmark rate by 2.5 per cent since May last year in its fight against inflation, which stayed above the higher end of the central bank's target of 2-6 per cent&nbsp;in 10 of the 12 months last year.

The central bank had to send a mandatory report to the government explaining why it could not meet its inflation target for most months last year.

What does the RBI rate hike mean?

Indian banks are certain to pass on the latest hike to customers almost immediately, as seen in recent months.

That will make loans costlier and lead to higher equated monthly instalments (EMIs).

All consumer loans have become costlier over the past year.

Indian households continue to be under pressure from mounting interest and rising EMIs even as they struggle to manage their monthly budgets from rising prices of almost everything.

The series of relatively large RBI rate hikes have sparked concerns that the battle against inflation could also risk curbing economic growth.

That view has forced several top institutions, including the RBI, to downgrade their India GDP growth forecasts for 2023-24.

But RBI Governor Shaktikanta Das said the Indian economy remains resilient and is seen as a bright spot in a gloomy world.

He also warned inflation is sticky and likely to remain above the central bank's target of 4 per cent&nbsp;this year, and as such, caution is needed.

Still, slowing growth concerns have driven expectations that the RBI's hands will be forced to pause rate hikes at some point soon.

<a href="https://www.wionews.com/india-news/explained-does-writing-on-indian-rupee-make-it-invalid-heres-a-fact-check-551817">Explained: Does writing on Indian rupee make it invalid? Here's a fact check</a>

A Reuters poll taken before Wednesday's decision showed post the latest hike, India's central bank will pause on interest rates.

But the central bank's tone suggests otherwise, with the RBI Governor opening the door for more hikes.

Like other major central banks, the RBI is waiting for stubbornly high inflation to ease further before it moves away from an aggressive approach.

What is not helping is the reason for the global inflation surge over the past year - the disruptions to global supply chains because of the Russia-Ukraine war.

That war on the edge of Europe shows no signs of abating, and instead, the standoff now seems to be escalating further.

That will keep global central banks on their toes.

(With inputs from agencies)

WATCH WION LIVE HERE:&nbsp;

<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="350" loading="”lazy”" src="https://www.wionews.com/live-tv/embed?autoplay=1&amp;mute=1" width="100%"></iframe>

The Reserve Bank of India (RBI) hiked its key interest rate, the repo rate, by 25 basis points on Wednesday and lowered its growth and inflation projections. The repo rate is the interest banks pay to borrow from the central bank, and an increase in that rate makes banks raise their lending charges.

The Reserve Bank of India (RBI) hiked its key interest rate, the repo rate, by 25 basis points on Wednesday and lowered its growth and inflation projections. The repo rate is the interest banks pay to borrow from the central bank, and an increase in that rate makes banks raise their lending charges. The latest is the sixth consecutive rate hike, taking the RBI's key rate to 6.50 per cent. In all, the RBI has raised the benchmark rate by 2.5 per cent since May last year in its fight against inflation, which stayed above the higher end of the central bank's target of 2-6 per cent in 10 of the 12 months last year. The central bank had to send a mandatory report to the government explaining why it could not meet its inflation target for most months last year. What does the RBI rate hike mean? Indian banks are certain to pass on the latest hike to customers almost immediately, as seen in recent months. That will make loans costlier and lead to higher equated monthly instalments (EMIs). All consumer loans have become costlier over the past year. Indian households continue to be under pressure from mounting interest and rising EMIs even as they struggle to manage their monthly budgets from rising prices of almost everything. The series of relatively large RBI rate hikes have sparked concerns that the battle against inflation could also risk curbing economic growth. That view has forced several top institutions, including the RBI, to downgrade their India GDP growth forecasts for 2023-24. But RBI Governor Shaktikanta Das said the Indian economy remains resilient and is seen as a bright spot in a gloomy world. He also warned inflation is sticky and likely to remain above the central bank's target of 4 per cent this year, and as such, caution is needed. Still, slowing growth concerns have driven expectations that the RBI's hands will be forced to pause rate hikes at some point soon. Explained: Does writing on Indian rupee make it invalid? Here's a fact check A Reuters poll taken before Wednesday's decision showed post the latest hike, India's central bank will pause on interest rates. But the central bank's tone suggests otherwise, with the RBI Governor opening the door for more hikes. Like other major central banks, the RBI is waiting for stubbornly high inflation to ease further before it moves away from an aggressive approach. What is not helping is the reason for the global inflation surge over the past year - the disruptions to global supply chains because of the Russia-Ukraine war. That war on the edge of Europe shows no signs of abating, and instead, the standoff now seems to be escalating further. That will keep global central banks on their toes. (With inputs from agencies) WATCH WION LIVE HERE:

Loans, EMIs to get costlier after RBI hikes rates for the sixth time in a row

Often we come across notes of the Indian rupee- Rs 10, 20, 100, 500 and 2,000 with hand-written messages, doodles or some kind of a symbol. Many of us would remember the ''Sonam Gupta bewafa hai'' on a Rs 10 note which became a viral meme in the country.

Often we come across notes of the Indian rupee- Rs 10, 20, 100, 500 and 2,000 with hand-written messages, doodles or some kind of a symbol. Many of us would remember the ''Sonam Gupta bewafa hai'' on a Rs 10 note which became a viral meme in the country. Recently an image started circulating that writing anything on rupee notes makes them invalid and they will no longer be legal tender. However, this claim was fake and the central government of India issued a clarification last Sunday (January 8). ALSO READ | India: Supreme Court upholds government’s demonetisation decision with a 4-1 majority What was the fake claim? Taking to Twitter, the government's Press Information Bureau's (PIB) Fact Check wing shared an image of the fake claim which said, "As per new guidelines of the Reserve Bank of India (RBI), writing anything on new notes makes the note invalid and it will no more be a legal tender," the claim read. Government's clarification The PIB Fact Check tweeted last Sunday that the claim is fake. "NO, Bank notes with scribbling are not invalid & continue to be legal tender," PIB Fact Check said. However, it pointed out that as per the Clean Note Policy, people are requested not to write on the currency notes as it defaces them & reduces their life. Does writing anything on the bank note make it invalid❓#PIBFactCheck ✔️ NO, Bank notes with scribbling are not invalid & continue to be legal tender ✔️Under the Clean Note Policy, people are requested not to write on the currency notes as it defaces them & reduces their life pic.twitter.com/V8Lwk9TN8C — PIB Fact Check (@PIBFactCheck) January 8, 2023 × What is the Clean Note Policy? The Clean Note Policy was announced in 1999 by India's central bank- the Reserve Bank of India (RBI). In a statement, the RBI says that the objective of the Clean Note Policy is to give the citizens good quality currency notes and coins while the soiled notes are withdrawn out of circulation. Ever since the policy was announced, several steps were taken for augmenting the supply of currency notes and coins. According to the RBI, people have been urged not to write on the currency notes and banks are instructed to provide unrestricted facilities for the exchange of soiled and mutilated notes. "As per the Reserve Bank instructions, currency chest branches of the banks must offer, even to non-customers, good quality notes and coins in exchange for soiled and mutilated notes," the central bank's statement adds. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Explained: Does writing on Indian rupee make it invalid? Here's a fact check

India's central bank RBI will launch the country's first pilot for a retail e-rupee on December 1st (Tuesday).&nbsp;The e-rupee will be the Reserve Bank of India's version of the central bank digital currency (CBDC) and will cover select locations and would be available to a closed user group to start with. The group as per the bank will include merchants and some participating customers.&nbsp;"It would be distributed through intermediaries such as banks."

The pilot will be launched in two phases. The first phase will have four banks participating across four cities, these banks are State Bank of India, ICICI Bank, Yes Bank and IDC First Bank.

Watch |&nbsp;India to introduce its digital currency 'E-Rupee' soon

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/india-to-introduce-its-digital-currency-e-rupee-soon-523593/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

In the second phase, four more banks, namely: Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will also join across more cities.&nbsp;At a later stage, the scope of the pilot may be expanded gradually to include more banks, users and locations as needed,&nbsp;said the RBI.

Reuters reports that users will be able to transact using the e-rupee via their mobiles or devices, using the digital wallets of participating banks.&nbsp;

Also read |&nbsp;<a href="https://www.wionews.com/india-news/india-rbi-to-pilot-launch-e-rupee-for-specific-cases-releases-concept-note-523437">India: RBI to pilot launch e-rupee for specific cases, releases concept note</a>

"It would be issued in the same denominations that paper currency and coins are currently issued," said RBI in a statement. However, unlike normal bank deposits, this would not earn users any interest and could not be converted into other forms of money.

"The pilot will test the robustness of the entire process of digital rupee creation, distribution and retail usage in real-time," said the bank.

Also read |&nbsp;<a href="https://www.wionews.com/what-is-rbis-digital-currency-difference-between-cryptocurrency-and-cbdc-530527">What is e-rupee and what is the difference between cryptocurrency and CBDC?</a>

Based on the pilot test results, the central bank will then test other applications and features of the e-currency.

Previously, on November 1, the Indian central bank also launched a pilot of the wholesale e-rupee. In it, nine participating banks have for a month been transacting in government securities using the e-rupee.

(With inputs from agencies)

WATCH WION LIVE HERE

<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="350" loading="”lazy”" src="https://www.wionews.com/live-tv/embed?autoplay=1&amp;mute=1" width="100%"></iframe>

You can now write for wionews.com and be a part of the community. Share your stories and opinions with us <a href="https://www.wionews.com/content-contribution-registration-form">here</a>.

India's central bank RBI will launch the country's first pilot for a retail e-rupee on December 1st (Tuesday). The e-rupee will be the Reserve Bank of India's version of the central bank digital currency (CBDC) and will cover select locations and would be available to a closed user group to start with.

India's central bank RBI will launch the country's first pilot for a retail e-rupee on December 1st (Tuesday). The e-rupee will be the Reserve Bank of India's version of the central bank digital currency (CBDC) and will cover select locations and would be available to a closed user group to start with. The group as per the bank will include merchants and some participating customers. "It would be distributed through intermediaries such as banks." The pilot will be launched in two phases. The first phase will have four banks participating across four cities, these banks are State Bank of India, ICICI Bank, Yes Bank and IDC First Bank. Watch | India to introduce its digital currency 'E-Rupee' soon In the second phase, four more banks, namely: Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will also join across more cities. At a later stage, the scope of the pilot may be expanded gradually to include more banks, users and locations as needed, said the RBI. Reuters reports that users will be able to transact using the e-rupee via their mobiles or devices, using the digital wallets of participating banks. Also read | India: RBI to pilot launch e-rupee for specific cases, releases concept note "It would be issued in the same denominations that paper currency and coins are currently issued," said RBI in a statement. However, unlike normal bank deposits, this would not earn users any interest and could not be converted into other forms of money. "The pilot will test the robustness of the entire process of digital rupee creation, distribution and retail usage in real-time," said the bank. Also read | What is e-rupee and what is the difference between cryptocurrency and CBDC? Based on the pilot test results, the central bank will then test other applications and features of the e-currency. Previously, on November 1, the Indian central bank also launched a pilot of the wholesale e-rupee. In it, nine participating banks have for a month been transacting in government securities using the e-rupee. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

RBI to launch India's first pilot for retail digital currency, e-rupee, on December 1

The Reserve Bank of India announced on Friday that it will be raising its benchmark repo rate by 50 basis points to 5.90 per cent in order to combat the growing inflation. This was the fourth time that the rates were increased since May mirroring the steps taken by major banks all around the world.&nbsp;&nbsp;

In August, the retail inflation rate of India jumped to 7 per cent from 6.7 per cent in July. &nbsp;The Indian Rupee has also taken quite a hit as it breached the 81-mark against the United States dollar.&nbsp;

Also read |&nbsp;<a href="https://www.wionews.com/world/death-toll-remains-uncertain-as-hurricane-ian-causes-devastation-in-florida-521070" hreflang="en">At least 12 dead as Hurricane Ian causes massive devastation in Florida</a>

“The global economy is in the eye of the storm, but India has withstood shocks over the last two years,” the RBI governor said. Inflation is hovering around 7 percent and is expected to remain around 6 per cent in the second half of the year. “Inflation rates remain elevated food items,” RBI Governor Shaktikanta Das said.&nbsp;

"The GDP grew by 13.5 per cent year-on-year in the first quarter," he added according to Reuters.&nbsp;

In the past week, several international banks have also increased their rates in order to stabilise the situation caused by the Ukraine-Russia conflict. The US Federal Reserve hiked its rates to a 14-year high while the Bank of England also increased its rates amid massive economic distress in the United Kingdom.&nbsp;

Also read |&nbsp;<a href="https://www.wionews.com/world/putin-recognises-independence-of-two-ukraine-regions-521040">Putin recognises independence of Ukraine's Zaporizhzhia and Kherson regions</a>

The Gross Domestic Product (GDP) went up by 13.5 per cent in the second quarter of 2022 for India but it was still under the RBI projection of 16.2 per cent. &nbsp;

With the supply chain getting severely affected by the ongoing crisis, it remains doubtful if the GDP will be able to grow according to the RBI projection of 7.2 per cent for the entire year.&nbsp;

(With inputs from agencies)

<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="350" loading="”lazy”" src="https://www.wionews.com/live-tv/embed?autoplay=1&amp;mute=1" width="100%"></iframe>

The Reserve Bank of India announced on Friday that it will be raising its benchmark repo rate by 50 basis points to 5.90 per cent in order to combat the growing inflation.

The Reserve Bank of India announced on Friday that it will be raising its benchmark repo rate by 50 basis points to 5.90 per cent in order to combat the growing inflation. This was the fourth time that the rates were increased since May mirroring the steps taken by major banks all around the world. In August, the retail inflation rate of India jumped to 7 per cent from 6.7 per cent in July. The Indian Rupee has also taken quite a hit as it breached the 81-mark against the United States dollar. Also read | At least 12 dead as Hurricane Ian causes massive devastation in Florida “The global economy is in the eye of the storm, but India has withstood shocks over the last two years,” the RBI governor said. Inflation is hovering around 7 percent and is expected to remain around 6 per cent in the second half of the year. “Inflation rates remain elevated food items,” RBI Governor Shaktikanta Das said. "The GDP grew by 13.5 per cent year-on-year in the first quarter," he added according to Reuters. In the past week, several international banks have also increased their rates in order to stabilise the situation caused by the Ukraine-Russia conflict. The US Federal Reserve hiked its rates to a 14-year high while the Bank of England also increased its rates amid massive economic distress in the United Kingdom. Also read | Putin recognises independence of Ukraine's Zaporizhzhia and Kherson regions The Gross Domestic Product (GDP) went up by 13.5 per cent in the second quarter of 2022 for India but it was still under the RBI projection of 16.2 per cent. With the supply chain getting severely affected by the ongoing crisis, it remains doubtful if the GDP will be able to grow according to the RBI projection of 7.2 per cent for the entire year. (With inputs from agencies)

RBI hikes benchmark repo rate by 50 basis points to a three-year high of 5.9 per cent

The Reserve Bank of India (RBI) on Saturday (July 16) said that the country's economy remained resilient in the face of global headwinds. India's top bank also predicted that India is anticipated to continue on the path to becoming the world's fastest-growing economy as inflation declines from its recent peak. Reuters reports that RBI in a bulletin said that recent improvements in the southwest monsoon and fresh planting have increased confidence that rural demand will soon catch up to urban spending and consolidate a recovery. "Knock-on effects of geopolitical spill overs are visible in several sectors, tapering the pace of recovery."

Watch |&nbsp;Recession fears and Indian-based firms | Shashank Srivastava Exclusive

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/recession-fears-and-indian-based-firms-shashank-srivastava-exclusive-497551/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

"In spite of this overwhelming shock, there are sparks in the wind that ignite the innate strength of the economy and set it on course to becoming the fastest growing economy in the world, though besieged it might be by fears of recession."

RBI did not give a time frame,&nbsp;however, according to it, the worst of the recent inflation spike will be over if the commodity price slowdown seen in recent weeks persists together with the reduction of supply chain pressures.

Also read |&nbsp;<a href="https://www.wionews.com/india-news/vice-president-election-2022-ruling-bjp-allies-pick-bengal-governor-jagdeep-dhankhar-498133" hreflang="en">Vice President election 2022: Ruling BJP, allies pick Bengal Governor Jagdeep Dhankhar</a>

"There is some evidence now that supply-chain pressures are peaking globally and in India," the bank said, adding that "a major source of upward inflation pressures may be ebbing."

"External debt remains modest as a proportion to GDP and has actually declined between March 2021 and March 2022," RBI said.

Also read |&nbsp;<a href="https://www.wionews.com/india/government-of-india-to-make-silicon-valley-tech-giants-pay-for-content-to-news-publishers-498052" hreflang="en">Government of India to make Silicon Valley tech giants pay for content to news publishers</a>

Reuters reports that according to figures released this week, India's annual consumer inflation remained agonisingly high above the 7 per cent mark, more than the central bank's tolerance range for the sixth consecutive month.

(With inputs from agencies)

Watch WION LIVE HERE:

<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="350" src="https://www.wionews.com/live-tv/embed?autoplay=1&amp;mute=1" width="100%"></iframe>

You can now write for wionews.com and be a part of the community. Share your stories and opinions with us <a href="https://www.wionews.com/content-contribution-registration-form">here</a>.

The Reserve Bank of India (RBI) on Saturday (July 16) said that the country's economy remained resilient in the face of global headwinds. India's top bank also predicted that India is anticipated to continue on the path to becoming the world's fastest-growing economy as inflation declines from its recent peak.

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

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

Instead of Mahatma Gandhi, the Reserve Bank of India (RBI) is reportedly considering using the watermark figures of Rabindranath Tagore and APJ Abdul Kalam on a new series of banknotes of some denominations.

The finance ministry wants to explore possibilities of including watermarks of multiple figures on currency notes, according to media reports.

Different denomination of dollars in the United States have separate portraits of George Washington, Benjamin Franklin, Thomas Jefferson, Andrew Jackson, Alexander Hamilton, and Abraham Lincoln.

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/gravitas-plus-uniform-civil-code-is-india-ready-485356/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

Two separate sets of samples of Gandhi, Tagore and Kalam watermarks have been sent to IIT-Delhi Emeritus Professor Dilip T Shahani by the Security Printing and Minting Corporation of India (SPMCIL), which is under the Finance Ministry.

Sahani, who specialises in Electromagnetic Instrumentation, has been told to choose from the two sets and present them for final consideration by the government.

Also see |&nbsp;<a href="https://www.wionews.com/photos/pm-modis-major-achievements-as-his-government-completes-eight-years-at-centre-483403" hreflang="en">PM Modi's major achievements as his government completes eight years at Centre</a>

In 2020, one of nine RBI internal committees had recommended in its report that Tagore and Kalam, who were one of Bengal’s greatest icons and India’s 11th President respectively, should be used as watermark figures.

As a result, Mysore-based Bharatiya Reserve Bank Note Mudran Pvt Ltd and the SPMCIL’s Security Paper Mill at Hoshangabad were instructed by RBI to design their own sets of the watermark samples in 2021.

Prithwish Dasgupta had filed a Public Interest Litigation (PIL) in the Calcutta high court asking why currency notes in the country cannot have photographs of Netaji Subhas Chandra Bose or any other important personality.

"Though Mahatma Gandhi and Jawaharlal Nehru have garnered much of the credit for the successful culmination of the Indian freedom struggle, the contribution of Netaji is no less," Dasgupta said in his PIL.

(With inputs from agencies)

Watch WION's live TV here:

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false"><iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="350" src="https://www.wionews.com/live-tv/embed?autoplay=1&amp;mute=1">&amp;times;</iframe></div>

&nbsp;
</div>

Instead of Mahatma Gandhi, the Reserve Bank of India (RBI) is reportedly considering using the watermark figures of Rabindranath Tagore and APJ Abdul Kalam on a new series of banknotes of some denominations.

Instead of Mahatma Gandhi, the Reserve Bank of India (RBI) is reportedly considering using the watermark figures of Rabindranath Tagore and APJ Abdul Kalam on a new series of banknotes of some denominations. The finance ministry wants to explore possibilities of including watermarks of multiple figures on currency notes, according to media reports. Different denomination of dollars in the United States have separate portraits of George Washington, Benjamin Franklin, Thomas Jefferson, Andrew Jackson, Alexander Hamilton, and Abraham Lincoln. Two separate sets of samples of Gandhi, Tagore and Kalam watermarks have been sent to IIT-Delhi Emeritus Professor Dilip T Shahani by the Security Printing and Minting Corporation of India (SPMCIL), which is under the Finance Ministry. Sahani, who specialises in Electromagnetic Instrumentation, has been told to choose from the two sets and present them for final consideration by the government. Also see | PM Modi's major achievements as his government completes eight years at Centre In 2020, one of nine RBI internal committees had recommended in its report that Tagore and Kalam, who were one of Bengal’s greatest icons and India’s 11th President respectively, should be used as watermark figures. As a result, Mysore-based Bharatiya Reserve Bank Note Mudran Pvt Ltd and the SPMCIL’s Security Paper Mill at Hoshangabad were instructed by RBI to design their own sets of the watermark samples in 2021. Prithwish Dasgupta had filed a Public Interest Litigation (PIL) in the Calcutta high court asking why currency notes in the country cannot have photographs of Netaji Subhas Chandra Bose or any other important personality. "Though Mahatma Gandhi and Jawaharlal Nehru have garnered much of the credit for the successful culmination of the Indian freedom struggle, the contribution of Netaji is no less," Dasgupta said in his PIL. (With inputs from agencies) Watch WION's live TV here:

RBI can use watermark figures of Rabindranath Tagore and APJ Abdul Kalam on currency instead of Mahatma Gandhi

The Reserve Bank of India has rejected a proposal by big business&nbsp;houses asking to mull on granting them banking license.

India's central bank has modified the rules of ownership and the corporate structure of private banks in India.

Under the new rules significant shareholders in a non-state bank, known as bank promoters, must only reduce their stake to 26 per cent&nbsp;stake after 15 years, the central bank said, rather than to the current limit of 15 per cent&nbsp;within that timeframe.

The new norms allow those who have already diluted stakes to hike their shareholding.

Also read |&nbsp;<a href="https://www.wionews.com/india-news/indian-crypto-investors-may-get-exit-time-if-govt-bans-trade-but-with-a-rider-report-431869" hreflang="en">Indian crypto investors may get exit time if govt bans trade: Report</a>

The Internal Working Group had made 33 recommendations, out of which the RBI has accepted 21.

"The remaining recommendations are under examination," the RBI said.

The central bank said payments banks must operate for at least five years before applying to become small finance banks (SFB), longer than the group's recommendation of three years of operations as sufficient to graduate into an SFB.

According to the RBI, ''This stipulation (concerning the dilution of promoters' stakes) should be uniform for all types of promoters and would not mean that promoters, who have already diluted their holdings to below 26 per cent, will not be permitted to raise it to 26&nbsp;per cent&nbsp;of the paid-up voting equity share capital of the bank.''&nbsp;

Also read |&nbsp;<a href="https://www.wionews.com/india-news/fifteen-more-countries-recognise-indias-covid-19-vaccination-certificate-mea-432225" hreflang="en">Fifteen more countries recognise India's COVID-19 vaccination certificate</a>

Non-promoter shareholdings will continue to be capped at 10 per cent&nbsp;for individuals and non-financial institutions but will be allowed up to 15&nbsp;per cent&nbsp;of the equity share capital of a bank in the case of all categories of financial institutions, supranational institutions, public sector bodies or government, the RBI said.

A year ago an RBI working group recommended that&nbsp;banking regulations be amended to allow large industrial groups to act as&nbsp;bank&nbsp;promoters and own big stakes in a lender.

Such a move could transform the country's&nbsp;banking landscape but is something the central&nbsp;bank&nbsp;has strongly resisted in the past.

(With inputs from agencies)

The Reserve Bank of India has rejected a proposal by big business houses asking to mull on granting them banking license. India's central bank has modified the rules of ownership and the corporate structure of private banks in India.

The Reserve Bank of India has rejected a proposal by big business houses asking to mull on granting them banking license. India's central bank has modified the rules of ownership and the corporate structure of private banks in India. Under the new rules significant shareholders in a non-state bank, known as bank promoters, must only reduce their stake to 26 per cent stake after 15 years, the central bank said, rather than to the current limit of 15 per cent within that timeframe. The new norms allow those who have already diluted stakes to hike their shareholding. Also read | Indian crypto investors may get exit time if govt bans trade: Report The Internal Working Group had made 33 recommendations, out of which the RBI has accepted 21. "The remaining recommendations are under examination," the RBI said. The central bank said payments banks must operate for at least five years before applying to become small finance banks (SFB), longer than the group's recommendation of three years of operations as sufficient to graduate into an SFB. According to the RBI, ''This stipulation (concerning the dilution of promoters' stakes) should be uniform for all types of promoters and would not mean that promoters, who have already diluted their holdings to below 26 per cent, will not be permitted to raise it to 26 per cent of the paid-up voting equity share capital of the bank.'' Also read | Fifteen more countries recognise India's COVID-19 vaccination certificate Non-promoter shareholdings will continue to be capped at 10 per cent for individuals and non-financial institutions but will be allowed up to 15 per cent of the equity share capital of a bank in the case of all categories of financial institutions, supranational institutions, public sector bodies or government, the RBI said. A year ago an RBI working group recommended that banking regulations be amended to allow large industrial groups to act as bank promoters and own big stakes in a lender. Such a move could transform the country's banking landscape but is something the central bank has strongly resisted in the past. (With inputs from agencies)

Reserve Bank of India rejects proposal on corporate ownership of banks

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

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

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

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

India's central bank has banned global payments giant&nbsp;Mastercard&nbsp;from adding new customers starting next week, in an escalation of a long-standing dispute on local data storage rules.

The Reserve Bank of India (RBI) found&nbsp;Mastercard&nbsp;to be in violation of its April 2018 circular that directed all payments data be stored exclusively in India, allowing the regulator "unfettered supervisory access" to transaction details.

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet">
<a href="https://twitter.com/hashtag/Gravitas?src=hash&amp;ref_src=twsrc%5Etfw">#Gravitas</a> | <a href="https://twitter.com/hashtag/RBI?src=hash&amp;ref_src=twsrc%5Etfw">#RBI</a> has banned <a href="https://twitter.com/hashtag/Mastercard?src=hash&amp;ref_src=twsrc%5Etfw">#Mastercard</a> for violating data-storage laws. When does the ban kick in? Which banks does it impact? Will it impact existing customers too? Will domestic card companies benefit from this decision? <a href="https://twitter.com/palkisu?ref_src=twsrc%5Etfw">@palkisu</a> answers all your questions <a href="https://t.co/Ttrm187wC4">pic.twitter.com/Ttrm187wC4</a>
— WION (@WIONews) <a href="https://twitter.com/WIONews/status/1415733046192472068?ref_src=twsrc%5Etfw">July 15, 2021</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

Global payments service providers like&nbsp;Mastercard, Visa and American Express have lobbied against data localisation, citing increased costs.

"Notwithstanding (the) lapse of considerable time and adequate opportunities being given, the entity (Mastercard) has been found to be non-compliant with the directions of Storage Payment System Data," the RBI said in a notification.

Mastercard&nbsp;will be indefinitely blocked from issuing debit, credit or prepaid cards to customers in India from July 22.

The move comes less than three months after India's central bank barred American Express and Diners Club International, owned by Discover Financial Services, from issuing new cards due to similar violations.

But unlike American Express, which is a relatively small player in India, companies such as&nbsp;Mastercard&nbsp;and Visa have partnered with many Indian banks that offer cards using the US&nbsp;firms' payments network.

In 2019,&nbsp;Mastercard&nbsp;said it was "bullish on India", announcing $1 billion in investment over the next five years, in addition to its earlier investment of $1 billion from 2014-2019.

The RBI's decision will not impact existing customers of&nbsp;Mastercard, and the company should advise all card issuing banks in India to comply with the order, the RBI added.

The RBI directive in 2018 sparked an aggressive lobbying effort from US&nbsp;companies, which said the rules would increase their infrastructure costs and hit their global fraud detection platforms, but the central bank did not relent.

Global payments card companies have faced increasing competition from India's United Payments Interface (UPI) transactions that offer card-less and cashless payment options using phone numbers and QR codes.

A record 2.8 billion UPI transactions worth some 5.5 trillion rupees ($73.8 billion) took place in June.

(With inputs from agencies)

India's central bank has banned global payments giant Mastercard from adding new customers starting next week, in an escalation of a long-standing dispute on local data storage rules.

India's central bank has banned global payments giant Mastercard from adding new customers starting next week, in an escalation of a long-standing dispute on local data storage rules. The Reserve Bank of India (RBI) found Mastercard to be in violation of its April 2018 circular that directed all payments data be stored exclusively in India, allowing the regulator "unfettered supervisory access" to transaction details. #Gravitas | #RBI has banned #Mastercard for violating data-storage laws. When does the ban kick in? Which banks does it impact? Will it impact existing customers too? Will domestic card companies benefit from this decision? @palkisu answers all your questions pic.twitter.com/Ttrm187wC4 — WION (@WIONews) July 15, 2021 × Global payments service providers like Mastercard, Visa and American Express have lobbied against data localisation, citing increased costs. "Notwithstanding (the) lapse of considerable time and adequate opportunities being given, the entity (Mastercard) has been found to be non-compliant with the directions of Storage Payment System Data," the RBI said in a notification. Mastercard will be indefinitely blocked from issuing debit, credit or prepaid cards to customers in India from July 22. The move comes less than three months after India's central bank barred American Express and Diners Club International, owned by Discover Financial Services, from issuing new cards due to similar violations. But unlike American Express, which is a relatively small player in India, companies such as Mastercard and Visa have partnered with many Indian banks that offer cards using the US firms' payments network. In 2019, Mastercard said it was "bullish on India", announcing $1 billion in investment over the next five years, in addition to its earlier investment of $1 billion from 2014-2019. The RBI's decision will not impact existing customers of Mastercard, and the company should advise all card issuing banks in India to comply with the order, the RBI added. The RBI directive in 2018 sparked an aggressive lobbying effort from US companies, which said the rules would increase their infrastructure costs and hit their global fraud detection platforms, but the central bank did not relent. Global payments card companies have faced increasing competition from India's United Payments Interface (UPI) transactions that offer card-less and cashless payment options using phone numbers and QR codes. A record 2.8 billion UPI transactions worth some 5.5 trillion rupees ($73.8 billion) took place in June. (With inputs from agencies)

Why did India ban Mastercard from issuing new cards?

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

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

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

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

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

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

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

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

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

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

The Reserve Bank of India (RBI) left key interest rates unchanged on Friday but signalled more easing ahead to support an economy that it sees contracting 9.5 per cent in the current fiscal.

The six-member Monetary Policy Committee, with three newly inducted external members, voted unanimously to retain the benchmark repurchase or repo rate at 4 per cent while keeping its policy stance accommodative, implying it could ease again.

Also read |&nbsp;<a href="https://www.wionews.com/business-economy/in-a-first-world-trade-organization-to-be-led-by-a-woman-333619">In a first, World Trade Organization to be led by a woman</a>

The central bank had slashed the repo rate by 115 basis points since late March before hitting a pause button in August.

To bring down borrowing cost, RBI announced a number of unconventional steps, including doubling of the size of open-market bond purchases to Rs 20,000 crore, offer to buy state debt, and easing a corporate cash crunch through a Rs 1 lakh crore of targeted long-term funds available on tap.

Besides supporting economic activity, the measures are aimed at ensuring the government's record borrowing programme goes through smoothly.

RBI Governor Shaktikanta Das said the economic growth, which slumped to a negative 23.9 per cent in the April-June quarter, will turn positive only in the final January-March quarter.

"By all indications, the deep contractions of Q1 2020-21 (April-June) are behind us; silver linings are visible in the flattening of the active caseload curve across the country," he said.

Barring the risk of a second wave of infections, the economy appeared poised to begin a recovery, he said, noting food grain production was set for record highs and factories and cities were coming back to life.

With macro indicators pointing to a recovery, "GDP growth may break out of contraction and turn positive by Q4 (January-March)," he said.

"For the year 2020-21 as a whole, therefore, real GDP is expected to decline by 9.5 per cent, with risks tilted to the downside," he said, adding that if the current momentum of upturn gains ground, a faster and stronger rebound is eminently feasible.

After the sharp contraction in Q1 of FY21, the MPC expects growth to come in at (-)9.8 per cent in Q2, (-)5.6 per cent in Q3 and 0.5 per cent in Q4.

"Against all odds, we shall strive and revive," he said.

In a video live stream, he said RBI will "continue with the accommodative stance of monetary policy as long as necessary at least during the current financial year and into the next year to revive growth on a durable basis and mitigate the impact of COVID-19, while ensuring that inflation remains within the target going forward".

RBI saw inflation easing close to the targeted range of 4 per cent, plus or minus 2 pr cent, in the fourth-quarter ending March.

The governor noted that the recent pick-up in inflation is due to supply disruption and higher markups during the lockdown. Going forward, as supply chains are restored, inflation could ease to 4.5-5.4 per cent in the second half of FY21.

RBI's optimism on the inflation front is based on easing of supply-side disruption, weak demand conditions and bumper Kharif harvest as it expects the retail inflation to decline to 4.3 per cent in the first quarter of FY22.

In a bid to provide easy liquidity conditions, RBI announced Open Market Operations (OMO) worth Rs 20,000 crore, which will be used for buying Government of India securities.

OMO will also be extended to state development loans. This will ease the state's borrowing programmes amid lower collection of GST.

RBI also announced on tap TLTRO (Targeted Long Term Repo Operations) with tenors of up to three years for a total amount of up to Rs 1 lakh crore at a floating rate linked to the policy repo rate. The scheme will be available up to March 31, 2021.

Liquidity availed by banks under the scheme has to be deployed in corporate bonds, commercial papers, and non-convertible debentures issued by entities in specific sectors.

In order to facilitate higher credit flow to the retail and SME segments, RBI has decided to increase the definition of 'Regulatory Retail' threshold from Rs 5 crore to Rs 7.5 crore in respect of all fresh as well as incremental exposures.

This may incentivise banks to lend to this sector more as the new definition has increased the target segment.

RBI also rationalised risk weightage on home loans. All new housing loan risk will be linked only to the loan to value ratio.

The lower the ratio, the lower the risks and borrowers will get the interest rate benefits from institutions.

For exporters hit by the pandemic, RBI discontinued the system-based automatic caution-listing to allow them to realise export proceeds.

In order to facilitate swift and seamless payments in real-time for domestic businesses and institutions, RBI decided to make available the RTGS (Real Time Gross Settlement) system round-the-clock on all days from December.

In December last year, RBI had made available the National Electronic Fund Transfer (NEFT) system on a 24x7x365 basis.&nbsp;

The Reserve Bank of India (RBI) left key interest rates unchanged on Friday but signalled more easing ahead to support an economy that it sees contracting 9.5 per cent in the current fiscal.

The Reserve Bank of India (RBI) left key interest rates unchanged on Friday but signalled more easing ahead to support an economy that it sees contracting 9.5 per cent in the current fiscal. The six-member Monetary Policy Committee, with three newly inducted external members, voted unanimously to retain the benchmark repurchase or repo rate at 4 per cent while keeping its policy stance accommodative, implying it could ease again. Also read | In a first, World Trade Organization to be led by a woman The central bank had slashed the repo rate by 115 basis points since late March before hitting a pause button in August. To bring down borrowing cost, RBI announced a number of unconventional steps, including doubling of the size of open-market bond purchases to Rs 20,000 crore, offer to buy state debt, and easing a corporate cash crunch through a Rs 1 lakh crore of targeted long-term funds available on tap. Besides supporting economic activity, the measures are aimed at ensuring the government's record borrowing programme goes through smoothly. RBI Governor Shaktikanta Das said the economic growth, which slumped to a negative 23.9 per cent in the April-June quarter, will turn positive only in the final January-March quarter. "By all indications, the deep contractions of Q1 2020-21 (April-June) are behind us; silver linings are visible in the flattening of the active caseload curve across the country," he said. Barring the risk of a second wave of infections, the economy appeared poised to begin a recovery, he said, noting food grain production was set for record highs and factories and cities were coming back to life. With macro indicators pointing to a recovery, "GDP growth may break out of contraction and turn positive by Q4 (January-March)," he said. "For the year 2020-21 as a whole, therefore, real GDP is expected to decline by 9.5 per cent, with risks tilted to the downside," he said, adding that if the current momentum of upturn gains ground, a faster and stronger rebound is eminently feasible. After the sharp contraction in Q1 of FY21, the MPC expects growth to come in at (-)9.8 per cent in Q2, (-)5.6 per cent in Q3 and 0.5 per cent in Q4. "Against all odds, we shall strive and revive," he said. In a video live stream, he said RBI will "continue with the accommodative stance of monetary policy as long as necessary at least during the current financial year and into the next year to revive growth on a durable basis and mitigate the impact of COVID-19, while ensuring that inflation remains within the target going forward". RBI saw inflation easing close to the targeted range of 4 per cent, plus or minus 2 pr cent, in the fourth-quarter ending March. The governor noted that the recent pick-up in inflation is due to supply disruption and higher markups during the lockdown. Going forward, as supply chains are restored, inflation could ease to 4.5-5.4 per cent in the second half of FY21. RBI's optimism on the inflation front is based on easing of supply-side disruption, weak demand conditions and bumper Kharif harvest as it expects the retail inflation to decline to 4.3 per cent in the first quarter of FY22. In a bid to provide easy liquidity conditions, RBI announced Open Market Operations (OMO) worth Rs 20,000 crore, which will be used for buying Government of India securities. OMO will also be extended to state development loans. This will ease the state's borrowing programmes amid lower collection of GST. RBI also announced on tap TLTRO (Targeted Long Term Repo Operations) with tenors of up to three years for a total amount of up to Rs 1 lakh crore at a floating rate linked to the policy repo rate. The scheme will be available up to March 31, 2021. Liquidity availed by banks under the scheme has to be deployed in corporate bonds, commercial papers, and non-convertible debentures issued by entities in specific sectors. In order to facilitate higher credit flow to the retail and SME segments, RBI has decided to increase the definition of 'Regulatory Retail' threshold from Rs 5 crore to Rs 7.5 crore in respect of all fresh as well as incremental exposures. This may incentivise banks to lend to this sector more as the new definition has increased the target segment. RBI also rationalised risk weightage on home loans. All new housing loan risk will be linked only to the loan to value ratio. The lower the ratio, the lower the risks and borrowers will get the interest rate benefits from institutions. For exporters hit by the pandemic, RBI discontinued the system-based automatic caution-listing to allow them to realise export proceeds. In order to facilitate swift and seamless payments in real-time for domestic businesses and institutions, RBI decided to make available the RTGS (Real Time Gross Settlement) system round-the-clock on all days from December. In December last year, RBI had made available the National Electronic Fund Transfer (NEFT) system on a 24x7x365 basis.

RBI holds interest rates, sees economy contracting 9.5% in FY21 

A committee set up by the Reserve Bank of India (RBI) to make recommendations on restructuring loans for the Indian banking sector has submitted its report and it has been broadly accepted, the RBI said.

The committee has recommended five financial ratios such as total outstanding liabilities, total debt and debt service coverage ratio for 26 sectors which could be factored in by lenders while finalizing resolution plans for borrowers.

Apart from these, banks can also consider other financial parameters. Lenders have been directed to consider the pre-COVID-19 financial performance of the company for considering the resolution plan.

Also read:&nbsp;<a href="http://13.235.153.162/world/sebi-seeks-details-of-chinese-investments-in-india-292972" hreflang="en">Sebi seeks details of Chinese investments in India</a>

"It is good that the pre-COVID parameters are being considered as it will allow genuine companies to get a chance at restructuring which can be effective," said Siddharth Purohit, an analyst at SMC Instituional Equities.

These sectors include aviation, hospitality and real estate, which are some of the most stressed sectors in the economy due to the impact of the pandemic.

The RBI said it had broadly accepted the recommendations of the expert committee.

Now all eyes are on banks to see how the resolution framework is implemented.

"The broad parameters suggested by the committee specify the boundary conditions for restructuring but the efficacy of resolution plans would depend on the appropriateness of the assumptions taken by lenders while taking a view on business recovery," said Jitin Makkar, analyst at credit rating agency ICRA.

The RBI had formed a committee under K.V. Kamath, the former head of the New Development Bank, set up by the BRICS to come up with guidelines for the resolution framework.

Lenders will need to make an additional 10% provisioning for the loan accounts that are being restructured.

The RBI has previously warned that bad loans in the Indian banking system could rise to 15% in a worst-case scenario. Gross Non-performing assets in March were at 8.5% of total loans.

A committee set up by the Reserve Bank of India (RBI) to make recommendations on restructuring loans for the Indian banking sector has submitted its report and it has been broadly accepted, the RBI said.

A committee set up by the Reserve Bank of India (RBI) to make recommendations on restructuring loans for the Indian banking sector has submitted its report and it has been broadly accepted, the RBI said. The committee has recommended five financial ratios such as total outstanding liabilities, total debt and debt service coverage ratio for 26 sectors which could be factored in by lenders while finalizing resolution plans for borrowers. Apart from these, banks can also consider other financial parameters. Lenders have been directed to consider the pre-COVID-19 financial performance of the company for considering the resolution plan. Also read: Sebi seeks details of Chinese investments in India "It is good that the pre-COVID parameters are being considered as it will allow genuine companies to get a chance at restructuring which can be effective," said Siddharth Purohit, an analyst at SMC Instituional Equities. These sectors include aviation, hospitality and real estate, which are some of the most stressed sectors in the economy due to the impact of the pandemic. The RBI said it had broadly accepted the recommendations of the expert committee. Now all eyes are on banks to see how the resolution framework is implemented. "The broad parameters suggested by the committee specify the boundary conditions for restructuring but the efficacy of resolution plans would depend on the appropriateness of the assumptions taken by lenders while taking a view on business recovery," said Jitin Makkar, analyst at credit rating agency ICRA. The RBI had formed a committee under K.V. Kamath, the former head of the New Development Bank, set up by the BRICS to come up with guidelines for the resolution framework. Lenders will need to make an additional 10% provisioning for the loan accounts that are being restructured. The RBI has previously warned that bad loans in the Indian banking system could rise to 15% in a worst-case scenario. Gross Non-performing assets in March were at 8.5% of total loans.

RBI outlines guidelines on debt resolution for stressed sectors

India’s policymakers should focus on protecting the economy as businesses struggle amid the coronavirus pandemic instead of being overly focused on what ratings agencies think, former Reserve Bank of India governor Raghuram Rajan said on Thursday.

“It is also important to convince both domestic and international investors that after the crisis associated with the pandemic is over, we will return to fiscal responsibility over the medium term, and the government should do more to convince them of that,” Rajan told the Global Markets Forum.

<a href="https://www.wionews.com/india-news/with-spike-of-56282-cases-indias-covid-19-tally-reaches-1964537-318518">Also read|&nbsp;With spike of 56,282 cases, India's COVID-19 tally reaches 19,64,537</a>

India was placed under one of the strictest lockdowns in the world in late March for more than two months to stem the spread of the coronavirus, but cases have continued to rise steadily since the government eased restrictions in June, stymieing hopes of an economic recovery.

The government has announced several initiatives to help the poor and small, and medium-size businesses, but actual cash outgo from the government’s measures has been estimated at just about 1% of GDP.

Several attribute the fiscal prudence to fear of a downgrade after Moody’s cut India’s rating and outlook in early June followed closely by a change in outlook from Fitch.

<a href="https://www.wionews.com/india-news/india-china-standoff-indian-security-officials-seek-four-to-six-dedicated-satellites-along-lac-to-keep-an-eye-on-china-report-318634">Also read|&nbsp;India-China standoff: Indian security officials seek four to six dedicated satellites along LAC to keep an eye on China: Report</a>

The central bank on its part too has reduced the key lending rate by 115 basis points on top of the 135 bps last year but decided to hold rates steady earlier in the day against market expectations as inflation pressures have risen.

“The RBI and government have certainly been cooperating, but it seems like it is elsewhere, the ball is in the government’s court to do more,” Rajan said.

He said the RBI needs to focus on whether credit is reaching the stressed areas of the economy and also if the viable firms were able to access credit and not the unviable ones.

“And I think that’s where it has to focus its attentions, because resources, as you well know, are limited in India today.”

To ease debt strains on companies and lenders, the RBI on Thursday said it would allow restructuring of corporate loans by banks, a move that was widely awaited by the industry.

Governor Shaktikanta Das said there was room to cut rates further but the central bank will ensure inflation stays within its target range. Most analysts expect it to reduce rates once inflation is brought under control.

Government officials too have suggested the possibility of any more fiscal stimulus being announced, would only come in the second half of the fiscal year, once a recovery has taken root and coronavirus cases have peaked.

“What India should focus on at this point is protecting its economic capabilities, so that when it has dealt with the virus it can go resume activity in a reasonable way. That should be the focus,” Rajan said.

“And if it does that, there is no reason why the rating agencies will not see that as an appropriate policy”.

India’s policymakers should focus on protecting the economy as businesses struggle amid the coronavirus pandemic instead of being overly focused on what ratings agencies think, former Reserve Bank of India governor Raghuram Rajan said on Thursday.

India’s policymakers should focus on protecting the economy as businesses struggle amid the coronavirus pandemic instead of being overly focused on what ratings agencies think, former Reserve Bank of India governor Raghuram Rajan said on Thursday. “It is also important to convince both domestic and international investors that after the crisis associated with the pandemic is over, we will return to fiscal responsibility over the medium term, and the government should do more to convince them of that,” Rajan told the Global Markets Forum. Also read| With spike of 56,282 cases, India's COVID-19 tally reaches 19,64,537 India was placed under one of the strictest lockdowns in the world in late March for more than two months to stem the spread of the coronavirus, but cases have continued to rise steadily since the government eased restrictions in June, stymieing hopes of an economic recovery. The government has announced several initiatives to help the poor and small, and medium-size businesses, but actual cash outgo from the government’s measures has been estimated at just about 1% of GDP. Several attribute the fiscal prudence to fear of a downgrade after Moody’s cut India’s rating and outlook in early June followed closely by a change in outlook from Fitch. Also read| India-China standoff: Indian security officials seek four to six dedicated satellites along LAC to keep an eye on China: Report The central bank on its part too has reduced the key lending rate by 115 basis points on top of the 135 bps last year but decided to hold rates steady earlier in the day against market expectations as inflation pressures have risen. “The RBI and government have certainly been cooperating, but it seems like it is elsewhere, the ball is in the government’s court to do more,” Rajan said. He said the RBI needs to focus on whether credit is reaching the stressed areas of the economy and also if the viable firms were able to access credit and not the unviable ones. “And I think that’s where it has to focus its attentions, because resources, as you well know, are limited in India today.” To ease debt strains on companies and lenders, the RBI on Thursday said it would allow restructuring of corporate loans by banks, a move that was widely awaited by the industry. Governor Shaktikanta Das said there was room to cut rates further but the central bank will ensure inflation stays within its target range. Most analysts expect it to reduce rates once inflation is brought under control. Government officials too have suggested the possibility of any more fiscal stimulus being announced, would only come in the second half of the fiscal year, once a recovery has taken root and coronavirus cases have peaked. “What India should focus on at this point is protecting its economic capabilities, so that when it has dealt with the virus it can go resume activity in a reasonable way. That should be the focus,” Rajan said. “And if it does that, there is no reason why the rating agencies will not see that as an appropriate policy”.

India should focus on protecting economy, says ex-RBI governor

The Reserve Bank of India(RBI) today announced that key rates will remain unchanged.

The RBI kept repo rate unchanged at 4 per cent.&nbsp;RBI governor Shaktikanta Das declared that reverse repo rate also remains unchanged at 3.3 per cent.

<a href="https://www.wionews.com/opinions-blogs/cooperative-banks-now-subject-to-regulation-by-reserve-bank-of-india-317300">Also Read:&nbsp;Cooperative banks now subject to regulation by Reserve Bank of India</a>

While making the announcement, RBI governor Shaktikanta Das said that global financial markets remain buoyant, although he added that exports have contracted for the fourth straight month in June.

India's central bank said that the country's forex reserves are up by $56.8 billion, however it added that GDP growth will remain negative in the first half of the current year.

"For the year 2020-21 as a whole, real GDP growth is also estimated to be negative," it said.

The RBI governor added that although economic activity had picked up however due to fresh surge of coronavirus and lockdowns, several high-frequency indicators had levelled off.

"With coronavirus infections rising under fragile micro-economic and financial conditions, we propose to take regulatory and developmental measures including enhancing liquidity support for financial markets, ease financial stress caused by the virus while strengthening credit discipline," Shaktikanta Das stated.

The Reserve Bank of India(RBI) today announced that key rates will remain unchanged. The RBI kept repo rate unchanged at 4 per cent. RBI governor Shaktikanta Das declared that reverse repo rate also remains unchanged at 3.

The Reserve Bank of India(RBI) today announced that key rates will remain unchanged. The RBI kept repo rate unchanged at 4 per cent. RBI governor Shaktikanta Das declared that reverse repo rate also remains unchanged at 3.3 per cent. Also Read: Cooperative banks now subject to regulation by Reserve Bank of India While making the announcement, RBI governor Shaktikanta Das said that global financial markets remain buoyant, although he added that exports have contracted for the fourth straight month in June. India's central bank said that the country's forex reserves are up by $56.8 billion, however it added that GDP growth will remain negative in the first half of the current year. "For the year 2020-21 as a whole, real GDP growth is also estimated to be negative," it said. The RBI governor added that although economic activity had picked up however due to fresh surge of coronavirus and lockdowns, several high-frequency indicators had levelled off. "With coronavirus infections rising under fragile micro-economic and financial conditions, we propose to take regulatory and developmental measures including enhancing liquidity support for financial markets, ease financial stress caused by the virus while strengthening credit discipline," Shaktikanta Das stated.

Reserve Bank of India keeps key rates unchanged; exports contract for fourth straight month

As an offshoot to the unravelling of Punjab and Maharashtra Cooperative Bank debacle in 2019, the President, in exercise of the powers conferred by Clause (1) of Article 123 of the Constitution of India, promulgated the Banking Regulation (Amendment) Ordinance, 2020 (hereinafter referred to as the “Ordinance”) on 26.06.2020.&nbsp;

The ordinance has primarily been promulgated for bringing cooperative banks under the supervisory powers of the Reserve Bank of India (hereinafter referred to as “RBI”), in order to protect the interest of depositors across the country and strengthen cooperative banks by improving governance and oversight. The said intention of the central government was first intimated to the public by the finance minister, Nirmala Sitharaman during the presentation of the annual budget of the current financial year.

The ordinance effectively amends the Banking Regulation Act, 1949 (hereinafter referred to as the “Principal Act”) by extending powers already available with the Reserve Bank of India, in respect of other banks, to co-operative Banks as well for better management, sound banking regulation, ensuring professionalism and enabling their access to capital.&nbsp;

The ordinance does not take away the powers of the state registrars of co-operative societies under state co-operative laws. Furthermore, the ordinance does not affect Primary Agricultural Credit Societies or co-operative societies, having a primary object and principal business of long-term finance for agricultural development, and which do not use the words “bank”, “banker” or “banking” and do not act as drawees of cheques. The ordinance also amends Section 45 of the Principal Act, to enable making of a scheme of reconstruction or amalgamation of a banking company for protecting the interest of the public, depositors and the banking system and for securing its proper management, even without making an order of moratorium, so as to avoid disruption of the financial system.

Prior to the ordinance, the duty to regulate the cooperative banks was shared by the RBI and the respective state registrar’s of the cooperative societies. The role of the registrar was to have a statutory oversight over the incorporation, management, audit and liquidation of the such banks, while the role of the RBI was restricted to overlooking the mere maintenance of cash reserves and capital adequacy.&nbsp;

It is pertinent to note herein that this is the general regulatory role that RBI usually plays with respect to banks, irrespective of the nature of functioning. Therefore, following the irregularities uncovered in relation to such cooperative banks and with the intention to protect the hard earned money of approximately 8.6 crore depositors panning across 1,540 urban and multi-state cooperative banks, amounting to a total of up to Rs.4.84 lakh crores, the aforementioned ordinance was promulgated by the President of India. The Banking Regulation (Amendment) Bill, 2020 was previously introduced in the House of People on 03.03.2020 but could not be taken for consideration by the House of People due to the coronavirus pandemic.

Most cooperative banks, on account of the mismanagement prevalent therein, led to undercapitalisation and poor management and supervision thereby, leading to losses suffered by the innocent depositors.&nbsp;

In the past many years, the RBI has been seen to impose restrictions on lending and withdrawals on such banks, that are able to continue to operate with the explicit or implicit support from the government for years. However, subsequently they are wound up and their licence cancelled, thereby, increasing the sufferings of those innocent depositors, until the bank is finally liquidated.

With the promulgation of the ordinance by the President, the banks will now be audited according to the norms of the RBI instead of that of the state registrars. The central bank will also have the power to supersede the board of such banks by taking charge of certain banking actions for an interim period, but such can be done only when the bank in question is found to be in an exceptional circumstance; and with the consultation of the respective state government. The resultant effect of the ordinance is that the state registrars will continue to undertake the administrative functions, that they used to perform earlier, but simultaneously, the cooperative banks of the country have been made more answerable to the RBI.

The Principal Act provides that RBI may apply to the central government to place a banking company under a moratorium, during which, no legal action can be initiated or continued against the bank for a period of up to six months. Further, the bank cannot make any payment or discharge liabilities during this period. The ordinance, however, adds that during the period of moratorium, the bank cannot grant any loans or make investments in any credit instruments.

The Principal Act also stipulates that during the period of moratorium, RBI may prepare a scheme for reconstruction or amalgamation of the bank, if it is satisfied that such an order is needed to secure proper management of the bank, or in the interest of depositors, general public, or the banking system. However, the ordinance allows RBI to initiate such a scheme as mentioned above, without imposing a moratorium.

It is also pertinent to herein that the ordinance provides that a cooperative bank, with the prior approval of the RBI and such other conditions as mentioned therein, may issue equity shares, preference shares, or special shares on face value or at a premium to its members or to any other person residing within its area of operation, by way of public issue or private placements. Further, it may issue unsecured debentures or bonds or other like securities with maturity of not less than ten years to such persons.

In view of the aforesaid changes, the ordinance is, indeed, a positive move taken by the central government, with a view to help and end the misery of depositors by protecting their money deposited in such cooperative banks so that they do not have to face any inconveniences in the form of restrictions on daily withdrawals, as was seen in the Punjab and Maharashtra Cooperative Bank fiasco. Such a move would not only give the RBI more power to regulate cooperative banks but also safeguard the money of the depositors.

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

As an offshoot to the unravelling of Punjab and Maharashtra Cooperative Bank debacle in 2019, the President, in exercise of the powers conferred by Clause (1) of Article 123 of the Constitution of India, promulgated the Banking Regulation (Amendment) Ordinance, 2020 (hereinafter referred to as the “Ordinance”) on 26.

As an offshoot to the unravelling of Punjab and Maharashtra Cooperative Bank debacle in 2019, the President, in exercise of the powers conferred by Clause (1) of Article 123 of the Constitution of India, promulgated the Banking Regulation (Amendment) Ordinance, 2020 (hereinafter referred to as the “Ordinance”) on 26.06.2020. The ordinance has primarily been promulgated for bringing cooperative banks under the supervisory powers of the Reserve Bank of India (hereinafter referred to as “RBI”), in order to protect the interest of depositors across the country and strengthen cooperative banks by improving governance and oversight. The said intention of the central government was first intimated to the public by the finance minister, Nirmala Sitharaman during the presentation of the annual budget of the current financial year. The ordinance effectively amends the Banking Regulation Act, 1949 (hereinafter referred to as the “Principal Act”) by extending powers already available with the Reserve Bank of India, in respect of other banks, to co-operative Banks as well for better management, sound banking regulation, ensuring professionalism and enabling their access to capital. The ordinance does not take away the powers of the state registrars of co-operative societies under state co-operative laws. Furthermore, the ordinance does not affect Primary Agricultural Credit Societies or co-operative societies, having a primary object and principal business of long-term finance for agricultural development, and which do not use the words “bank”, “banker” or “banking” and do not act as drawees of cheques. The ordinance also amends Section 45 of the Principal Act, to enable making of a scheme of reconstruction or amalgamation of a banking company for protecting the interest of the public, depositors and the banking system and for securing its proper management, even without making an order of moratorium, so as to avoid disruption of the financial system. Prior to the ordinance, the duty to regulate the cooperative banks was shared by the RBI and the respective state registrar’s of the cooperative societies. The role of the registrar was to have a statutory oversight over the incorporation, management, audit and liquidation of the such banks, while the role of the RBI was restricted to overlooking the mere maintenance of cash reserves and capital adequacy. It is pertinent to note herein that this is the general regulatory role that RBI usually plays with respect to banks, irrespective of the nature of functioning. Therefore, following the irregularities uncovered in relation to such cooperative banks and with the intention to protect the hard earned money of approximately 8.6 crore depositors panning across 1,540 urban and multi-state cooperative banks, amounting to a total of up to Rs.4.84 lakh crores, the aforementioned ordinance was promulgated by the President of India. The Banking Regulation (Amendment) Bill, 2020 was previously introduced in the House of People on 03.03.2020 but could not be taken for consideration by the House of People due to the coronavirus pandemic. Most cooperative banks, on account of the mismanagement prevalent therein, led to undercapitalisation and poor management and supervision thereby, leading to losses suffered by the innocent depositors. In the past many years, the RBI has been seen to impose restrictions on lending and withdrawals on such banks, that are able to continue to operate with the explicit or implicit support from the government for years. However, subsequently they are wound up and their licence cancelled, thereby, increasing the sufferings of those innocent depositors, until the bank is finally liquidated. With the promulgation of the ordinance by the President, the banks will now be audited according to the norms of the RBI instead of that of the state registrars. The central bank will also have the power to supersede the board of such banks by taking charge of certain banking actions for an interim period, but such can be done only when the bank in question is found to be in an exceptional circumstance; and with the consultation of the respective state government. The resultant effect of the ordinance is that the state registrars will continue to undertake the administrative functions, that they used to perform earlier, but simultaneously, the cooperative banks of the country have been made more answerable to the RBI. The Principal Act provides that RBI may apply to the central government to place a banking company under a moratorium, during which, no legal action can be initiated or continued against the bank for a period of up to six months. Further, the bank cannot make any payment or discharge liabilities during this period. The ordinance, however, adds that during the period of moratorium, the bank cannot grant any loans or make investments in any credit instruments. The Principal Act also stipulates that during the period of moratorium, RBI may prepare a scheme for reconstruction or amalgamation of the bank, if it is satisfied that such an order is needed to secure proper management of the bank, or in the interest of depositors, general public, or the banking system. However, the ordinance allows RBI to initiate such a scheme as mentioned above, without imposing a moratorium. It is also pertinent to herein that the ordinance provides that a cooperative bank, with the prior approval of the RBI and such other conditions as mentioned therein, may issue equity shares, preference shares, or special shares on face value or at a premium to its members or to any other person residing within its area of operation, by way of public issue or private placements. Further, it may issue unsecured debentures or bonds or other like securities with maturity of not less than ten years to such persons. In view of the aforesaid changes, the ordinance is, indeed, a positive move taken by the central government, with a view to help and end the misery of depositors by protecting their money deposited in such cooperative banks so that they do not have to face any inconveniences in the form of restrictions on daily withdrawals, as was seen in the Punjab and Maharashtra Cooperative Bank fiasco. Such a move would not only give the RBI more power to regulate cooperative banks but also safeguard the money of the depositors. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

Cooperative banks now subject to regulation by Reserve Bank of India

In order to boost the Indian economy Reserve Bank of India (RBI) in a move has reduced the key interest rates. Watch report.

RBI makes loans cheaper: Key interest rates reduced by 0.4%

Indian Banks' Association (IBA) has submitted a list of recommendations to both the government and the Reserve Bank of India (RBI) to ease the financial burden faced by various sectors due to the outbreak of coronavirus pandemic.

Some of the key recommendations included blanket credit guarantee for MSME loans, one-time loan restructuring for sectors hit hard by COVID-19 and raising of moratorium and relief for the NBFC sector, sources said.

As per the RBI's norms, restructuring of loans is prohibited and resolution of default cases are dealt as per the Insolvency and Bankruptcy Code (IBC).

Based on the representation made by various industry associations, a detailed and comprehensive list of suggestions have been submitted to the government and the RBI for addressing problems faced by various sectors including MSME in general and banking sector in particular, sources said.

It is for the regulator and the government to take an informed decision on those suggestions depending on their assessment and keeping in mind prudential norms, sources added.

However, the IBA in its meeting last week was of the view that this is an extraordinary situation and response to this should be extraordinary.

Bankers believed that some safety net has to be created for both industry and banks for survival first, sources said, adding, revival would follow.

Various estimates indicate a drastic reduction in GDP growth forecast for the current fiscal due to the impact of COVID-19 and consequent lockdown.

As per the World Bank's latest assessment, India is expected to grow 1.5 per cent to 2.8 per cent. Similarly, the IMF projected a GDP growth of 1.9 per cent for India in 2020, as the global economy hits the worst recession since the Great Depression in the 1930s.

Earlier this month, SBI Chairman Rajnish Kumar had said that the IBA will request for raising the loan moratorium period from the existing three months to 5-6 months depending on the evolving situation.

Kumar, who is also the chairman of the IBA, had said that there was also demand government guarantees against loans to certain risk-prone sectors to revive credit flow in the economy post lockdown.&nbsp;

Indian Banks' Association (IBA) has submitted a list of recommendations to both the government and the Reserve Bank of India (RBI) to ease the financial burden faced by various sectors due to the outbreak of coronavirus pandemic.

Indian Banks' Association (IBA) has submitted a list of recommendations to both the government and the Reserve Bank of India (RBI) to ease the financial burden faced by various sectors due to the outbreak of coronavirus pandemic. Some of the key recommendations included blanket credit guarantee for MSME loans, one-time loan restructuring for sectors hit hard by COVID-19 and raising of moratorium and relief for the NBFC sector, sources said. As per the RBI's norms, restructuring of loans is prohibited and resolution of default cases are dealt as per the Insolvency and Bankruptcy Code (IBC). Based on the representation made by various industry associations, a detailed and comprehensive list of suggestions have been submitted to the government and the RBI for addressing problems faced by various sectors including MSME in general and banking sector in particular, sources said. It is for the regulator and the government to take an informed decision on those suggestions depending on their assessment and keeping in mind prudential norms, sources added. However, the IBA in its meeting last week was of the view that this is an extraordinary situation and response to this should be extraordinary. Bankers believed that some safety net has to be created for both industry and banks for survival first, sources said, adding, revival would follow. Various estimates indicate a drastic reduction in GDP growth forecast for the current fiscal due to the impact of COVID-19 and consequent lockdown. As per the World Bank's latest assessment, India is expected to grow 1.5 per cent to 2.8 per cent. Similarly, the IMF projected a GDP growth of 1.9 per cent for India in 2020, as the global economy hits the worst recession since the Great Depression in the 1930s. Earlier this month, SBI Chairman Rajnish Kumar had said that the IBA will request for raising the loan moratorium period from the existing three months to 5-6 months depending on the evolving situation. Kumar, who is also the chairman of the IBA, had said that there was also demand government guarantees against loans to certain risk-prone sectors to revive credit flow in the economy post lockdown.

Double moratorium period to 6 months, provide credit guarantee for MSME loans: IBA to RBI

The Reserve Bank Of India has announced liquidity measures for banks and NPFC's and now the central bank has forecast a 7.4% GDP growth. Watch report.

RBI governor on revival of economy | India's GDP to grow at 7.4% in 2021-22

Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved ₹1,340 crore recapitalisation of regional rural banks to improve their capital to risk-weighted assets ratio.

Union Minister Prakash Javadekar said the CCEA approved the utilisation of ₹670 crore as the Central government's share for the scheme.

Also read:&nbsp;<a href="https://www.wionews.com/india-news/centre-issues-guidelines-to-ministries-amid-lockdown-due-to-coronavirus-288325">Centre issues guidelines to ministries amid lockdown due to coronavirus</a>

The decision will provide minimum regulatory capital to regional rural banks for another year beyond 2019-20, that is up to 2020-21 for those which are unable to maintain minimum capital to risk-weighted assets ratio (CRAR) of 9 per cent as per regulatory norms prescribed by the Reserve Bank of India (RBI).

Also read: <a href="https://www.wionews.com/opinions-blogs/coronavirus-pandemic-will-bring-a-halt-to-globalisation-288214">Coronavirus pandemic will bring a halt to globalisation</a>

A financially stronger and robust regional rural banks with improved CRAR will enable them to meet credit requirement in rural areas, according to an official statement.

As per RBI guidelines, regional rural banks have to provide 75 per cent of their total credit under priority sector lending (PSL).

These banks are primarily catering to the credit and banking requirements of the agriculture sector and rural areas with a focus on small and marginal farmers, micro and small enterprises, rural artisans and weaker sections of the society.

The government has initiated structural consolidation of regional rural banks in three phases, thereby reducing their number from 196 in 2005 to 45 now.

Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved ₹1,340 crore recapitalisation of regional rural banks to improve their capital to risk-weighted assets ratio.

Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved ₹1,340 crore recapitalisation of regional rural banks to improve their capital to risk-weighted assets ratio. Union Minister Prakash Javadekar said the CCEA approved the utilisation of ₹670 crore as the Central government's share for the scheme. Also read: Centre issues guidelines to ministries amid lockdown due to coronavirus The decision will provide minimum regulatory capital to regional rural banks for another year beyond 2019-20, that is up to 2020-21 for those which are unable to maintain minimum capital to risk-weighted assets ratio (CRAR) of 9 per cent as per regulatory norms prescribed by the Reserve Bank of India (RBI). Also read: Coronavirus pandemic will bring a halt to globalisation A financially stronger and robust regional rural banks with improved CRAR will enable them to meet credit requirement in rural areas, according to an official statement. As per RBI guidelines, regional rural banks have to provide 75 per cent of their total credit under priority sector lending (PSL). These banks are primarily catering to the credit and banking requirements of the agriculture sector and rural areas with a focus on small and marginal farmers, micro and small enterprises, rural artisans and weaker sections of the society. The government has initiated structural consolidation of regional rural banks in three phases, thereby reducing their number from 196 in 2005 to 45 now.

Cabinet approves ₹1,340 crore recapitalisation of regional rural banks

Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday said the central bank of India would provide necessary liquidity to cash-strapped Yes Bank if such a need arises. He added the money of the depositors was safe at Yes Bank, and that they should not withdraw it in panic.

"A swift action has been taken by the RBI and the government of India. The moratorium on Yes Bank will be lifted on March 18 at 6 pm. And the new board of the Yes Bank will take over on March 26. Also, the bank's identity will be retained as a private sector entity," Shaktikanta Das said, while addressing the media in New Delhi.

<a href="https://www.wionews.com/india-news/federal-bank-to-invest-rs-300-crore-in-yes-bank-286414">Also Read: Federal Bank to invest Rs 300 crore in Yes Bank</a>

He added, "I would like to convey to the depositors of Yes Bank, through you, that their money is completely safe and there is nothing to worry about. There is no reason for any undue worry," adding, "RBI will provide the necessary liquidity to the Yes Bank if need arises."

The RBI governor also said the Yes Bank is being credibly and sustainably restructured.

Das added that the Indian banking sector, including that of private banks, was sound and safe, and that State governments need not withdraw their money from private banks.

Finance Minister Sitharaman Nirmala Sitharaman had last week asked the RBI to report on the irregularities at the Yes Bank and the role of its leadership indicating a probe is on the way. The minister also assured that the employees' salaries would be protected for a year.

<a href="https://www.wionews.com/business-economy/yes-bank-crisis-anil-ambani-asked-to-appear-before-enforcement-directorate-today-286599">Also Read: Yes Bank crisis — Anil Ambani asked to appear before Enforcement Directorate</a>

Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday said the central bank of India would provide necessary liquidity to cash-strapped Yes Bank if such a need arises.

Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday said the central bank of India would provide necessary liquidity to cash-strapped Yes Bank if such a need arises. He added the money of the depositors was safe at Yes Bank, and that they should not withdraw it in panic. "A swift action has been taken by the RBI and the government of India. The moratorium on Yes Bank will be lifted on March 18 at 6 pm. And the new board of the Yes Bank will take over on March 26. Also, the bank's identity will be retained as a private sector entity," Shaktikanta Das said, while addressing the media in New Delhi. Also Read: Federal Bank to invest Rs 300 crore in Yes Bank He added, "I would like to convey to the depositors of Yes Bank, through you, that their money is completely safe and there is nothing to worry about. There is no reason for any undue worry," adding, "RBI will provide the necessary liquidity to the Yes Bank if need arises." The RBI governor also said the Yes Bank is being credibly and sustainably restructured. Das added that the Indian banking sector, including that of private banks, was sound and safe, and that State governments need not withdraw their money from private banks. Finance Minister Sitharaman Nirmala Sitharaman had last week asked the RBI to report on the irregularities at the Yes Bank and the role of its leadership indicating a probe is on the way. The minister also assured that the employees' salaries would be protected for a year. Also Read: Yes Bank crisis — Anil Ambani asked to appear before Enforcement Directorate

RBI will support Yes Bank by providing necessary liquidity if need arises: Shaktikanta Das

Allaying concerns raised by many after Yes Bank fiasco, the Reserve Bank on Sunday reiterated that depositors' money is safe and it is closely monitoring all banks.

The RBI further said that concerns about the safety of deposits in banks are based on a flawed analysis.

Also read:&nbsp;<a href="https://www.wionews.com/india-news/yes-bank-founder-rana-kapoor-sent-in-ed-custody-till-march-11-285078">Yes Bank founder Rana Kapoor sent in ED custody till March 11</a>

"Concern has been raised in certain sections of media about the safety of deposits of certain banks. This concern is based on analysis which is flawed. Solvency of banks is internationally based on Capital to Risk-Weighted Assets (CRAR) and not on market cap," the central bank said in a tweet.

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet">
Concern has been raised in certain sections of media about safety of deposits of certain banks. This concern is based on analysis which is flawed. Solvency of banks is internationally based on Capital to Risk Weighted Assets (CRAR) and not on market cap. (1/2)
— ReserveBankOfIndia (@RBI) <a href="https://twitter.com/RBI/status/1236617795812470787?ref_src=twsrc%5Etfw">March 8, 2020</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

"RBI closely monitors all the banks and hereby assures all depositors that there is no such concern of the safety of their deposits in any bank," its second tweet said.

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet">
RBI closely monitors all the banks and hereby assures all depositors that there is no such concern of safety of their deposits in any bank. (2/2)
— ReserveBankOfIndia (@RBI) <a href="https://twitter.com/RBI/status/1236617836757278720?ref_src=twsrc%5Etfw">March 8, 2020</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

Earlier, echoing similar sentiments, Chief Economic Adviser Krishnamurthy Subramanian said Indian banks are well capitalised and there is no reason to worry, adding that it is a wrong method to assess a lender's health based on the ratio of deposit to m-cap (market capitalisation).

"What I want to emphatically state that the m-cap ratio is a totally incorrect metric for assessing the safety of the banks. No banking sector expert or banking regulator uses this measure," Subramanian said.

Watch:&nbsp;&nbsp;

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/as-rbi-puts-cap-on-yes-bank-money-withdrawal-indian-fm-assure-customers-that-their-money-is-safe-284831/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>
</div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

A day after imposing a 30-day moratorium on Yes Bank and capping withdrawal limit at Rs 50,000, the RBI on Friday evening had issued a draft reconstruction scheme for the private sector lender.

As per the RBI's draft reconstruction scheme, State Bank of India will pick up 49 per cent stake in the crisis-ridden Yes Bank under a government-approved bailout plan.

Allaying concerns raised by many after Yes Bank fiasco, the Reserve Bank on Sunday reiterated that depositors' money is safe and it is closely monitoring all banks.

Allaying concerns raised by many after Yes Bank fiasco, the Reserve Bank on Sunday reiterated that depositors' money is safe and it is closely monitoring all banks. The RBI further said that concerns about the safety of deposits in banks are based on a flawed analysis. Also read: Yes Bank founder Rana Kapoor sent in ED custody till March 11 "Concern has been raised in certain sections of media about the safety of deposits of certain banks. This concern is based on analysis which is flawed. Solvency of banks is internationally based on Capital to Risk-Weighted Assets (CRAR) and not on market cap," the central bank said in a tweet. Concern has been raised in certain sections of media about safety of deposits of certain banks. This concern is based on analysis which is flawed. Solvency of banks is internationally based on Capital to Risk Weighted Assets (CRAR) and not on market cap. (1/2) — ReserveBankOfIndia (@RBI) March 8, 2020 × "RBI closely monitors all the banks and hereby assures all depositors that there is no such concern of the safety of their deposits in any bank," its second tweet said. RBI closely monitors all the banks and hereby assures all depositors that there is no such concern of safety of their deposits in any bank. (2/2) — ReserveBankOfIndia (@RBI) March 8, 2020 × Earlier, echoing similar sentiments, Chief Economic Adviser Krishnamurthy Subramanian said Indian banks are well capitalised and there is no reason to worry, adding that it is a wrong method to assess a lender's health based on the ratio of deposit to m-cap (market capitalisation). "What I want to emphatically state that the m-cap ratio is a totally incorrect metric for assessing the safety of the banks. No banking sector expert or banking regulator uses this measure," Subramanian said. Watch: × A day after imposing a 30-day moratorium on Yes Bank and capping withdrawal limit at Rs 50,000, the RBI on Friday evening had issued a draft reconstruction scheme for the private sector lender. As per the RBI's draft reconstruction scheme, State Bank of India will pick up 49 per cent stake in the crisis-ridden Yes Bank under a government-approved bailout plan.

RBI reiterates depositors' money safe in banks; concerns based on 'flawed' analysis

Former State Bank of India Chief financial officer Prashant Kumar has become the administrator after Reserve Bank of India overtakes Yes Bank after dissolving its board.

WION Wallet: RBI took-over control of Bad loan-burdened Yes Bank | Yes Bank Crisis

As Reserve Bank of India puts a cap on Yes bank money withdrawal, Indian Finance Minister Nirmala Sitharaman assure customers that their money is safe in the bank & there is no need to worry.

As RBI puts cap on Yes bank money withdrawal, Indian FM assure customers that their money is safe

A strategic investor like SBI will have to pick up 49 per cent stake in Yes Bank, RBI's draft scheme of reconstruction for the crisis-hit lender said on Friday.

The central bank added that SBI is already willing&nbsp;in picking up a stake in Yes Bank.&nbsp;

Also read:&nbsp;<a href="https://www.wionews.com/india-news/yes-bank-crisis-will-not-let-any-institution-to-fall-says-fm-nirmala-sitharaman-284776">Yes Bank crisis: Will not let any institution to fall, says FM Nirmala Sitharaman</a>

As per the draft: 'Yes Bank Ltd. Reconstruction Scheme, 2020', the RBI said the strategic investor bank will have to pick up 49 per cent stake and it cannot reduce holding to below 26 per cent before three years from the date of capital infusion.&nbsp;

Also read:&nbsp;<a href="https://www.wionews.com/business-economy/sensex-closes-over-890-points-down-over-yes-bank-coronavirus-fears-284748">Sensex closes over 890 points down over Yes Bank, coronavirus fears</a>

"The investor bank shall agree to invest in the equity of the Reconstructed bank to the extent that post-infusion it holds 49 per cent shareholding in the Reconstructed bank at a price not less than Rs 10 (Face value of Rs 2) and premium of Rs 8," the draft said.&nbsp;

The RBI also said that the comments from the stakeholders on the draft are open till March 9.&nbsp;

The draft comes a day after the RBI imposed a moratorium on the lender, restricting withdrawals to Rs 50,000 per depositor till April 3.

Earlier, Union Finance Minister Nirmala Sitharaman addressed a press conference where she said that she would not let any institution to fall off the cliff.&nbsp;

Sitharaman also said that the RBI has been asked to look into what went wrong with Yes Bank and fix individual responsibilities.

RBI Governor Shaktikanta Das today said that resolution efforts are aimed at maintaining "stability and resilience" in the Indian financial sector and the challenges will be overcome "very swiftly".

On BSE, Yes Banks stocks plunged by over 80 per cent during intra-day trade, before closing &nbsp;56.04 per cent lower at Rs 16.20.

(With PTI inputs)

A strategic investor like SBI will have to pick up 49 per cent stake in Yes Bank, RBI's draft scheme of reconstruction for the crisis-hit lender said on Friday. The central bank added that SBI is already willing in picking up a stake in Yes Bank.

A strategic investor like SBI will have to pick up 49 per cent stake in Yes Bank, RBI's draft scheme of reconstruction for the crisis-hit lender said on Friday. The central bank added that SBI is already willing in picking up a stake in Yes Bank. Also read: Yes Bank crisis: Will not let any institution to fall, says FM Nirmala Sitharaman As per the draft: 'Yes Bank Ltd. Reconstruction Scheme, 2020', the RBI said the strategic investor bank will have to pick up 49 per cent stake and it cannot reduce holding to below 26 per cent before three years from the date of capital infusion. Also read: Sensex closes over 890 points down over Yes Bank, coronavirus fears "The investor bank shall agree to invest in the equity of the Reconstructed bank to the extent that post-infusion it holds 49 per cent shareholding in the Reconstructed bank at a price not less than Rs 10 (Face value of Rs 2) and premium of Rs 8," the draft said. The RBI also said that the comments from the stakeholders on the draft are open till March 9. The draft comes a day after the RBI imposed a moratorium on the lender, restricting withdrawals to Rs 50,000 per depositor till April 3. Earlier, Union Finance Minister Nirmala Sitharaman addressed a press conference where she said that she would not let any institution to fall off the cliff. Sitharaman also said that the RBI has been asked to look into what went wrong with Yes Bank and fix individual responsibilities. RBI Governor Shaktikanta Das today said that resolution efforts are aimed at maintaining "stability and resilience" in the Indian financial sector and the challenges will be overcome "very swiftly". On BSE, Yes Banks stocks plunged by over 80 per cent during intra-day trade, before closing 56.04 per cent lower at Rs 16.20. (With PTI inputs)

Potential investor will have to pick up 49% stake in Yes Bank; SBI shown willingness: RBI

Yes Bank, India’s fifth-largest private sector lender, was placed under a moratorium with the Reserve Bank of India (RBI) taking over from its board for 30 days and imposing limits on withdrawals to protect depositors. The central bank said, was necessary because of a serious deterioration in Yes Bank’s financial position and that it would swiftly work on a revival plan.

Government places Yes Bank placed under moratorium

reserve-bank-of-india

Reserve Bank Of India, News on Reserve Bank Of India, stories on Reserve Bank Of India, articles on Reserve Bank Of India, Reserve Bank Of India stories at Wion, Reserve Bank Of India news, Reserve Bank Of India latest news

reserve bank-of-india