The Reserve Bank of India’s has decided to put a moratorium on Yes Bank on Thursday for a period of thirty days. Withdrawals by depositors have been restricted, and mutual funds have begun writing off the value of the Yes Bank debt securities they hold. Watch report:

WION Wallet: RBI moves to restructure YES Bank by placing it under moratorium | Yes Bank Moratorium

Shares in India's Yes Bank plunged as much as 85 per cent on Friday after the central bank seized control and imposed withdrawal limits to prevent the collapse of the country's fourth-largest lender.

The move by the Reserve Bank of India (RBI) sparked a sell-off across the troubled banking sector and sent the rupee falling to its weakest level since 2018.

People queued outside Yes Bank branches after the announcement late Thursday that customers can only withdraw 50,000 rupees over the next 30 days while the RBI tries to put together a rescue.

The news added to liquidity concerns about India's financial system more than a year after the near-collapse of IL&amp;FS, one of the nation's biggest "shadow banks" -- finance houses responsible for significant consumer lending.

Also read:&nbsp;<a href="https://www.wionews.com/business-economy/rbi-imposes-moratorium-on-yes-bank-withdrawals-capped-to-rs-50000-284590">RBI imposes 'moratorium' on Yes Bank; withdrawals capped to Rs 50,000</a>

A resulting reluctance of banks to lend money has exacerbated the woes of Asia's third-biggest economy, with growth slowing for seven consecutive quarters before picking up with a meagre 4.7-per cent expansion in the final three months of 2019.

Yes Bank's exposure to the shadow banking sector is particularly large and it has been struggling for some time to raise fresh capital to free itself of a mountain of bad loans in order to quell worries about its viability.

"Investors have turned risk-averse and the contagion is likely to hit smaller bank and non-bank finance companies," said Abhimanyu Sofat at IIFL Securities.&nbsp;

"How soon the RBI finalises the rescue plan is key as persistent operational curbs increase uncertainty," Sofat told Bloomberg News.

Also see:<a href="https://www.wionews.com/india-news/supreme-court-allows-trade-in-cryptocurrencies-quashes-rbi-curb-284158">&nbsp;Supreme Court allows trade in cryptocurrencies, quashes RBI curb</a>

The RBI put the blame on "serious governance issues and practices in recent years" but said there was "no need to panic".

However, customers waiting to get their money were far from reassuring.

"It's not clear at the moment, and that is making some people panic a bit. Even I am at the moment," Devika, a student and Yes Bank account holder, told AFP as she queued to withdraw money in New Delhi.

"I had purchased 15 shares of Yes Bank at 150 rupees per share and now they are at 15 rupees. It's a huge dent on my investments and even my deposits are locked in," Varsha Gandhi, a Mumbai-based lawyer told the sources.

Watch:&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/government-places-yes-bank-placed-under-moratorium-284618/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>
</div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

"I am just waiting to see if RBI's moves will have any positive impact. But it's a huge loss as the stocks have tanked," 27-year-old Gandhi added.&nbsp;

RBI governor Shaktikanta Das also tried to reassure account holders.

"The 30 days which we have given is the outer limit, you will see very swift action from the RBI to put in place a scheme to revive Yes Bank," he told reporters in the financial capital Mumbai on Friday.&nbsp;

According to media reports, the RBI was attempting to cobble together a rescue that included State Bank of India (SBI), the country's largest lender, and other financial institutions.

"There are legitimate questions being raised about the bank's balance sheet, ability to raise capital and the central bank and SBI may have to take quick steps to revive it in the next few days," Ashutosh Datar, an independent economist in Mumbai, told sources.

"The next few weeks are crucial for Yes Bank's survival," said Sameer Narang, an economist at State Bank of Baroda.

By early afternoon in Mumbai, Yes Bank shares had recovered slightly but were still down 59 per cent at 15.20 rupees.

Shares in India's Yes Bank plunged as much as 85 per cent on Friday after the central bank seized control and imposed withdrawal limits to prevent the collapse of the country's fourth-largest lender.

Shares in India's Yes Bank plunged as much as 85 per cent on Friday after the central bank seized control and imposed withdrawal limits to prevent the collapse of the country's fourth-largest lender. The move by the Reserve Bank of India (RBI) sparked a sell-off across the troubled banking sector and sent the rupee falling to its weakest level since 2018. People queued outside Yes Bank branches after the announcement late Thursday that customers can only withdraw 50,000 rupees over the next 30 days while the RBI tries to put together a rescue. The news added to liquidity concerns about India's financial system more than a year after the near-collapse of IL&FS, one of the nation's biggest "shadow banks" -- finance houses responsible for significant consumer lending. Also read: RBI imposes 'moratorium' on Yes Bank; withdrawals capped to Rs 50,000 A resulting reluctance of banks to lend money has exacerbated the woes of Asia's third-biggest economy, with growth slowing for seven consecutive quarters before picking up with a meagre 4.7-per cent expansion in the final three months of 2019. Yes Bank's exposure to the shadow banking sector is particularly large and it has been struggling for some time to raise fresh capital to free itself of a mountain of bad loans in order to quell worries about its viability. "Investors have turned risk-averse and the contagion is likely to hit smaller bank and non-bank finance companies," said Abhimanyu Sofat at IIFL Securities. "How soon the RBI finalises the rescue plan is key as persistent operational curbs increase uncertainty," Sofat told Bloomberg News. Also see: Supreme Court allows trade in cryptocurrencies, quashes RBI curb The RBI put the blame on "serious governance issues and practices in recent years" but said there was "no need to panic". However, customers waiting to get their money were far from reassuring. "It's not clear at the moment, and that is making some people panic a bit. Even I am at the moment," Devika, a student and Yes Bank account holder, told AFP as she queued to withdraw money in New Delhi. "I had purchased 15 shares of Yes Bank at 150 rupees per share and now they are at 15 rupees. It's a huge dent on my investments and even my deposits are locked in," Varsha Gandhi, a Mumbai-based lawyer told the sources. Watch: × "I am just waiting to see if RBI's moves will have any positive impact. But it's a huge loss as the stocks have tanked," 27-year-old Gandhi added. RBI governor Shaktikanta Das also tried to reassure account holders. "The 30 days which we have given is the outer limit, you will see very swift action from the RBI to put in place a scheme to revive Yes Bank," he told reporters in the financial capital Mumbai on Friday. According to media reports, the RBI was attempting to cobble together a rescue that included State Bank of India (SBI), the country's largest lender, and other financial institutions. "There are legitimate questions being raised about the bank's balance sheet, ability to raise capital and the central bank and SBI may have to take quick steps to revive it in the next few days," Ashutosh Datar, an independent economist in Mumbai, told sources. "The next few weeks are crucial for Yes Bank's survival," said Sameer Narang, an economist at State Bank of Baroda. By early afternoon in Mumbai, Yes Bank shares had recovered slightly but were still down 59 per cent at 15.20 rupees.

Shares in India's Yes Bank crash on withdrawal limits

Yes Bank has been placed under "moratorium" with the Reserve Bank of India(RBI) capping depositor withdrawals at Rs 50,000 per account for a month.

<a href="https://www.wionews.com/business-economy/board-member-at-yes-bank-quits-cites-governance-concerns-273443">Also Read: Board member at Yes Bank quits, cites governance concerns</a>

"The Reserve Bank came to the conclusion that in the absence of a credible revival plan, and in public interest and the interest of the bank's depositors, it had no alternative but to apply to the central government for imposing a moratorium under Section 45 of the Banking Regulation Act, 1949," the RBI said in a statement.

RBI said <a href="https://www.wionews.com/business-economy/yes-bank-seeks-up-to-2-billion-in-preferential-new-share-issue-265494">Yes Bank</a> was in talks with investors including private equity firms to infuse capital.&nbsp;

"These investors did hold discussions with senior officials of the Reserve Bank but for various reasons eventually did not infuse any capital," RBI said, adding,"since a bank and market-led revival is a preferred option over a regulatory restructuring, the Reserve Bank made all efforts to facilitate such a process and gave adequate opportunity to the bank's management to draw up a credible revival plan, which did not materialise," the statement said.

<a href="https://www.wionews.com/business-economy/yes-bank-gets-12-billion-offer-from-global-investor-259044">Also Read: Yes Bank gets $1.2 billion offer from global investor</a>

In the statement, India's central bank said the move was necessary to restore depositors' confidence after the bank's inability to address potential loan losses and downgrades.

"The bank has also experienced serious governance issues and practices in the recent years which have led to steady decline of the bank," the Reserve Bank of India informed.

In January, Uttam Prakash Agarwal, an independent board member with Yes Bank had resigned from the lender's board and stepped down as head of its audit committee citing major corporate governance concerns.

Yes Bank has been placed under "moratorium" with the Reserve Bank of India(RBI) capping depositor withdrawals at Rs 50,000 per account for a month. Also Read: Board member at Yes Bank quits, cites governance concerns "The Reserve Bank came to the conclusion that in the absence of a credible revival plan, and in public interest and the interest of the bank's depositors, it had no alternative but to apply to the central government for imposing a moratorium under Section 45 of the Banking Regulation Act, 1949," the RBI said in a statement.

Yes Bank has been placed under "moratorium" with the Reserve Bank of India(RBI) capping depositor withdrawals at Rs 50,000 per account for a month. Also Read: Board member at Yes Bank quits, cites governance concerns "The Reserve Bank came to the conclusion that in the absence of a credible revival plan, and in public interest and the interest of the bank's depositors, it had no alternative but to apply to the central government for imposing a moratorium under Section 45 of the Banking Regulation Act, 1949," the RBI said in a statement. RBI said Yes Bank was in talks with investors including private equity firms to infuse capital. "These investors did hold discussions with senior officials of the Reserve Bank but for various reasons eventually did not infuse any capital," RBI said, adding,"since a bank and market-led revival is a preferred option over a regulatory restructuring, the Reserve Bank made all efforts to facilitate such a process and gave adequate opportunity to the bank's management to draw up a credible revival plan, which did not materialise," the statement said. Also Read: Yes Bank gets $1.2 billion offer from global investor In the statement, India's central bank said the move was necessary to restore depositors' confidence after the bank's inability to address potential loan losses and downgrades. "The bank has also experienced serious governance issues and practices in the recent years which have led to steady decline of the bank," the Reserve Bank of India informed. In January, Uttam Prakash Agarwal, an independent board member with Yes Bank had resigned from the lender's board and stepped down as head of its audit committee citing major corporate governance concerns.

RBI imposes 'moratorium' on Yes Bank; withdrawals capped to Rs 50,000

The Supreme Court on Wednesday struck down the Reserve Bank of India (RBI) 2018 circular that barred banks from giving access to companies in trading in cryptocurrencies.

Also read: <a href="https://www.wionews.com/india-news/supreme-court-reserves-order-on-plea-challenging-rbis-ban-on-cryptocurrency-277161">Supreme Court reserves order on plea challenging RBI's ban on cryptocurrency</a>

A three-judge Bench of Justices Rohinton Fali Nariman, S Ravindra Bhat, and V Ramasubramanian allowed the plea of the Internet and Mobile Association of India (IAMAI) challenging RBI's 2018 circular that directed regulated entities to not deal with cryptocurrencies.

The IAMAI, whose members include cryptocurrency exchanges, and others had approached the top court objecting to a 2018 RBI circular directing regulated entities to not deal with cryptocurrencies.

Also read: <a href="https://www.wionews.com/world/g7-worried-over-facebooks-libra-cryptocurrency-french-official-236753">G7 worried over Facebook's Libra cryptocurrency: French official</a>

The petitioners had argued that the RBI's circular taking cryptocurrencies out of the banking channels would deplete the ability of law enforcement agencies to regulate illegal activities in the industry.

IAMAI had claimed the move of RBI had effectively banned legitimate business activity via the virtual currencies (VCs).

The RBI on April 6, 2018, had issued the circular that barred RBI-regulated entities from "providing any service in relation to virtual currencies, including those of transfer or receipt of money in accounts relating to the purchase or sale of virtual currencies".

&nbsp;

The Supreme Court on Wednesday struck down the Reserve Bank of India (RBI) 2018 circular that barred banks from giving access to companies in trading in cryptocurrencies.

The Supreme Court on Wednesday struck down the Reserve Bank of India (RBI) 2018 circular that barred banks from giving access to companies in trading in cryptocurrencies. Also read: Supreme Court reserves order on plea challenging RBI's ban on cryptocurrency A three-judge Bench of Justices Rohinton Fali Nariman, S Ravindra Bhat, and V Ramasubramanian allowed the plea of the Internet and Mobile Association of India (IAMAI) challenging RBI's 2018 circular that directed regulated entities to not deal with cryptocurrencies. The IAMAI, whose members include cryptocurrency exchanges, and others had approached the top court objecting to a 2018 RBI circular directing regulated entities to not deal with cryptocurrencies. Also read: G7 worried over Facebook's Libra cryptocurrency: French official The petitioners had argued that the RBI's circular taking cryptocurrencies out of the banking channels would deplete the ability of law enforcement agencies to regulate illegal activities in the industry. IAMAI had claimed the move of RBI had effectively banned legitimate business activity via the virtual currencies (VCs). The RBI on April 6, 2018, had issued the circular that barred RBI-regulated entities from "providing any service in relation to virtual currencies, including those of transfer or receipt of money in accounts relating to the purchase or sale of virtual currencies".

Supreme Court allows trade in cryptocurrencies, quashes RBI curb

Shares edged lower on Wednesday as an emergency 50 basis point rate cut by the US&nbsp;Federal Reserve failed to calm investor nerves about the debilitating impact of the coronavirus outbreak.

The surprise rate cut on Tuesday was accompanied by Fed Chairman Jerome Powell's acknowledgement of an uncertain outlook and his view that rate cuts will not restore supply chains, sending US&nbsp;stocks sharply lower overnight and gold higher.

Also read:&nbsp;<a href="https://www.wionews.com/world/federal-reserve-must-further-ease-rates-we-are-not-playing-on-a-level-field-284049">Federal Reserve must further ease rates, we are not playing on a level field</a>

Indian equities, which had rallied on Tuesday on hopes of a coordinated effort by major central banks to combat the economic fallout of the virus, were kept in check on Wednesday by losses in heavyweight financials.

"Markets are uneasy as the Fed's action has shown the gravity of the situation and Powell's comments have indicated that the cut alone will not solve the problem," said Saurabh Jain, assistant vice president research, SMC Global Securities.

The NSE Nifty 50 index fell 0.25&nbsp;per cent&nbsp;to 11,276 by 0358 GMT, while the benchmark S&amp;P BSE Sensex was down 0.26 per cent&nbsp;at 38,523.66.

Also read:&nbsp;<a href="https://www.wionews.com/business-economy/world-bank-announces-up-to-12-billion-in-immediate-funds-for-coronavirus-284072">World Bank announces up to $12 billion in immediate funds for coronavirus</a>

"From the monetary policy angle, ensuring adequate availability of liquidity for stressed sectors is more important than rate cuts. And of course, fiscal measures too could be useful at this juncture," said Kunal Kundu, India economist with Societe Generale.

However, analysts said investors were still expecting the Reserve Bank of India (RBI) to reduce rates as well, in line with global counterparts.

The RBI said on Tuesday it stood ready to take appropriate actions to ensure the functioning of financial markets and preserve financial stability. 
Top private-sector lender HDFC Bank Ltd was the biggest drag on the indexes, falling as much as 1.1 per cent.

Vedanta Ltd dropped 3.7&nbsp;per cent&nbsp;and was the biggest loser on the blue-chip Nifty index. The Nifty Metal Index slipped 2 per cent.

Defence firm Hindustan Aeronautics Ltd fell as much as 5.1 per cent&nbsp;to its lowest since Sept. 4 after the company said it got a notice from the International Court of Arbitration related to an alleged breach of agreement with RUAG Aerospace Services GMBH.

Shares edged lower on Wednesday as an emergency 50 basis point rate cut by the US Federal Reserve failed to calm investor nerves about the debilitating impact of the coronavirus outbreak.

Shares edged lower on Wednesday as an emergency 50 basis point rate cut by the US Federal Reserve failed to calm investor nerves about the debilitating impact of the coronavirus outbreak. The surprise rate cut on Tuesday was accompanied by Fed Chairman Jerome Powell's acknowledgement of an uncertain outlook and his view that rate cuts will not restore supply chains, sending US stocks sharply lower overnight and gold higher. Also read: Federal Reserve must further ease rates, we are not playing on a level field Indian equities, which had rallied on Tuesday on hopes of a coordinated effort by major central banks to combat the economic fallout of the virus, were kept in check on Wednesday by losses in heavyweight financials. "Markets are uneasy as the Fed's action has shown the gravity of the situation and Powell's comments have indicated that the cut alone will not solve the problem," said Saurabh Jain, assistant vice president research, SMC Global Securities. The NSE Nifty 50 index fell 0.25 per cent to 11,276 by 0358 GMT, while the benchmark S&P BSE Sensex was down 0.26 per cent at 38,523.66. Also read: World Bank announces up to $12 billion in immediate funds for coronavirus "From the monetary policy angle, ensuring adequate availability of liquidity for stressed sectors is more important than rate cuts. And of course, fiscal measures too could be useful at this juncture," said Kunal Kundu, India economist with Societe Generale. However, analysts said investors were still expecting the Reserve Bank of India (RBI) to reduce rates as well, in line with global counterparts. The RBI said on Tuesday it stood ready to take appropriate actions to ensure the functioning of financial markets and preserve financial stability. Top private-sector lender HDFC Bank Ltd was the biggest drag on the indexes, falling as much as 1.1 per cent. Vedanta Ltd dropped 3.7 per cent and was the biggest loser on the blue-chip Nifty index. The Nifty Metal Index slipped 2 per cent. Defence firm Hindustan Aeronautics Ltd fell as much as 5.1 per cent to its lowest since Sept. 4 after the company said it got a notice from the International Court of Arbitration related to an alleged breach of agreement with RUAG Aerospace Services GMBH.

Nifty, Sensex slip as Fed rate cut fails to boost confidence

According to the National Statistical Office (NSO), India's<a href="https://www.wionews.com/business-economy/indias-gdp-seen-growing-at-47-in-december-quarter-283196"> Gross Domestic Product</a>(GDP) slipped to 4.7 per cent in October-December 2019.

<a href="https://www.wionews.com/business-economy/india-china-to-account-for-nearly-35-of-global-gdp-in-2060-study-278393">Also Read: India, China to account for nearly 35% of global GDP in 2060</a>

India's GDP was 5.6 per cent in the corresponding quarter of 2018-19.

India's economy grew 5.1 per cent in the nine-month period between April-December 2019 as against 6.3 per cent in the same period a year ago, the NSO informed.

The NSO pegged economic growth at 5 per cent in 2019-20 on Friday. India's Reserve Bank had pegged India's GDP growth at 5 per cent for 2019-20.

The Controller General of Accounts (CGA) informed that India's fiscal deficit touched 128.5 per cent of the whole year budget target at January-end, the government had targeted to restrict the fiscal deficit at Rs 7,66,846 crore during the year ending March 31, 2020.

In the Budget, finance minister&nbsp;Nirmalal Sitharaman had raised fiscal deficit target to 3.8 per cent of the GDP from 3.3 per cent earlier for 2019-20.

According to the National Statistical Office (NSO), India's Gross Domestic Product(GDP) slipped to 4.7 per cent in October-December 2019. Also Read: India, China to account for nearly 35% of global GDP in 2060 India's GDP was 5.

According to the National Statistical Office (NSO), India's Gross Domestic Product(GDP) slipped to 4.7 per cent in October-December 2019. Also Read: India, China to account for nearly 35% of global GDP in 2060 India's GDP was 5.6 per cent in the corresponding quarter of 2018-19. India's economy grew 5.1 per cent in the nine-month period between April-December 2019 as against 6.3 per cent in the same period a year ago, the NSO informed. The NSO pegged economic growth at 5 per cent in 2019-20 on Friday. India's Reserve Bank had pegged India's GDP growth at 5 per cent for 2019-20. The Controller General of Accounts (CGA) informed that India's fiscal deficit touched 128.5 per cent of the whole year budget target at January-end, the government had targeted to restrict the fiscal deficit at Rs 7,66,846 crore during the year ending March 31, 2020. In the Budget, finance minister Nirmalal Sitharaman had raised fiscal deficit target to 3.8 per cent of the GDP from 3.3 per cent earlier for 2019-20.

India's GDP growth slips to 4.7% in December quarter

Having suffered its weakest expansion in over six years in the September quarter, India's economy probably fared slightly better in the December quarter, before suffering a relapse due to the impact of the coronavirus globally, analysts said.

Gross domestic product data due to be released on Friday will cover up to the end of last year, before the epidemic in China had sparked fears of a pandemic.

The median forecast of a Reuters poll of economists put annual economic growth at 4.7% in the December quarter, marginally higher than 4.5% in the previous quarter thanks to a small rebound in rural demand, private consumption and government spending.

"The economy showed some signs of recovery in December quarter due to higher government spending and external factors, but faces a risk of relapsing in the current quarter mainly due to the coronavirus," said N.R. Bhanumurthy, an economist at National Institute of Public Finance and Policy (NIPFP), a Delhi-based government funded think tank.

Even achieving 4.5% annual growth this quarter would be a challenge, Bhanumurthy added.

In its annual budget presented earlier this month, the government estimated economic growth in the current fiscal year ending in March would be 5%, the lowest for 11 years.

And the government only targeted a slight recovery in growth to 6% for 2020/21, well below the levels required to generate jobs for the millions of young Indians entering the labour market each month.

Analysts expected growth would pick up gradually driven by a favourable base effect, a cut in corporate tax rates last September and increased government spending.

But, the central bank earlier this month warned that the downside risks to global growth have increased as a result of the coronavirus epidemic, the full effects of which are still uncertain and unfolding.

"Although number of cases of COVID-19 (coronavirus) in India are less, the economic impact is expected to accrue from supply chain risk," Soumya Kanti Ghosh, chief economist at State Bank of India, citing problems in supply of raw materials from China for pharmaceuticals and other exports.

A spike in inflation to a more than 5-1/2 year high of 7.59% in January is expected to make the Reserve Bank of India hold off on further cuts in interest rates for now, while keeping its monetary stance accommodative.

Finance Minister Nirmala Sitharaman has said some signs of green shoots were visible in the economy as the government has eased bottlenecks for consumer and industry bank loans, while expanding spending on infrastructure.

But analysts remained doubtful.

Goldman Sachs cut its growth forecast to 4.9% for the March quarter from earlier estimate of 5.4%.

"Despite the downward revision, we believe the risks to our growth forecast are still tilted to the downside, given the risk aversion in the domestic financial sector, the continued weakness in rural demand," Goldman Sachs, said in a note on Wednesday.

&nbsp;

Having suffered its weakest expansion in over six years in the September quarter, India's economy probably fared slightly better in the December quarter, before suffering a relapse due to the impact of the coronavirus globally, analysts said.

Having suffered its weakest expansion in over six years in the September quarter, India's economy probably fared slightly better in the December quarter, before suffering a relapse due to the impact of the coronavirus globally, analysts said. Gross domestic product data due to be released on Friday will cover up to the end of last year, before the epidemic in China had sparked fears of a pandemic. The median forecast of a Reuters poll of economists put annual economic growth at 4.7% in the December quarter, marginally higher than 4.5% in the previous quarter thanks to a small rebound in rural demand, private consumption and government spending. "The economy showed some signs of recovery in December quarter due to higher government spending and external factors, but faces a risk of relapsing in the current quarter mainly due to the coronavirus," said N.R. Bhanumurthy, an economist at National Institute of Public Finance and Policy (NIPFP), a Delhi-based government funded think tank. Even achieving 4.5% annual growth this quarter would be a challenge, Bhanumurthy added. In its annual budget presented earlier this month, the government estimated economic growth in the current fiscal year ending in March would be 5%, the lowest for 11 years. And the government only targeted a slight recovery in growth to 6% for 2020/21, well below the levels required to generate jobs for the millions of young Indians entering the labour market each month. Analysts expected growth would pick up gradually driven by a favourable base effect, a cut in corporate tax rates last September and increased government spending. But, the central bank earlier this month warned that the downside risks to global growth have increased as a result of the coronavirus epidemic, the full effects of which are still uncertain and unfolding. "Although number of cases of COVID-19 (coronavirus) in India are less, the economic impact is expected to accrue from supply chain risk," Soumya Kanti Ghosh, chief economist at State Bank of India, citing problems in supply of raw materials from China for pharmaceuticals and other exports. A spike in inflation to a more than 5-1/2 year high of 7.59% in January is expected to make the Reserve Bank of India hold off on further cuts in interest rates for now, while keeping its monetary stance accommodative. Finance Minister Nirmala Sitharaman has said some signs of green shoots were visible in the economy as the government has eased bottlenecks for consumer and industry bank loans, while expanding spending on infrastructure. But analysts remained doubtful. Goldman Sachs cut its growth forecast to 4.9% for the March quarter from earlier estimate of 5.4%. "Despite the downward revision, we believe the risks to our growth forecast are still tilted to the downside, given the risk aversion in the domestic financial sector, the continued weakness in rural demand," Goldman Sachs, said in a note on Wednesday.

India's GDP seen growing at 4.7% in December quarter

The <a href="https://www.wionews.com/business-economy/retail-inflation-up-at-554-in-november-industrial-production-in-october-down-by-38-267913">retail inflation</a> in January accelerated to 7.59 per cent due to higher prices of food items, government data showed on Wednesday.

In December, the consumer price index (CPI) stood at 7.35 per cent.

Figures released by the Ministry of Statistics and Programme Implementation showed that retail inflation in rural areas was at 7.73 per cent last month and 7.39 per cent in urban areas.

Also read:&nbsp;<a href="https://www.wionews.com/business-economy/indian-markets-witness-fall-on-inflation-data-in-early-trade-telecom-worries-hurt-banks-261952">Indian markets witness fall on inflation data in early trade; telecom worries hurt banks</a>

Inflation in the food basket jumped to 13.63 per cent from 14.12 per cent in December 2019. Inflation in vegetables improved to 50.19 per cent as against 60.50 per cent in December 2019.

Besides, the prices of cereals and products grew at a pace of 5.25 per cent.

The Reserve Bank of India has kept its repo rate unchanged at 5.15 per cent in its February meet despite slowing growth and revised its inflation projections.

The central bank estimates it will range between 5 and 5.4 per cent in the first half of the new fiscal year 2020-21.

Meanwhile, industrial production contracted by 0.3 per cent in December due to a decline in the manufacturing sector against 2.5 per cent growth in the same month year ago.

"The quick estimates of Index of Industrial Production (IIP) with base 2011-12 for the month of December 2019 stands at 133.5, which is 0.3 per cent lower as compared to the level in the month of December 2018," according to an official statement.

Electricity generation dipped by 0.1 per cent as against a growth of 4.5 per cent in December 2018 while the mining sector output grew by 5.4 per cent as compared to a contraction of 1 per cent earlier.

"The cumulative growth for the period of April to December 2019 over the corresponding period of the previous year stands at 0.5 per cent," it added

The retail inflation in January accelerated to 7.59 per cent due to higher prices of food items, government data showed on Wednesday. In December, the consumer price index (CPI) stood at 7.

The retail inflation in January accelerated to 7.59 per cent due to higher prices of food items, government data showed on Wednesday. In December, the consumer price index (CPI) stood at 7.35 per cent. Figures released by the Ministry of Statistics and Programme Implementation showed that retail inflation in rural areas was at 7.73 per cent last month and 7.39 per cent in urban areas. Also read: Indian markets witness fall on inflation data in early trade; telecom worries hurt banks Inflation in the food basket jumped to 13.63 per cent from 14.12 per cent in December 2019. Inflation in vegetables improved to 50.19 per cent as against 60.50 per cent in December 2019. Besides, the prices of cereals and products grew at a pace of 5.25 per cent. The Reserve Bank of India has kept its repo rate unchanged at 5.15 per cent in its February meet despite slowing growth and revised its inflation projections. The central bank estimates it will range between 5 and 5.4 per cent in the first half of the new fiscal year 2020-21. Meanwhile, industrial production contracted by 0.3 per cent in December due to a decline in the manufacturing sector against 2.5 per cent growth in the same month year ago. "The quick estimates of Index of Industrial Production (IIP) with base 2011-12 for the month of December 2019 stands at 133.5, which is 0.3 per cent lower as compared to the level in the month of December 2018," according to an official statement. Electricity generation dipped by 0.1 per cent as against a growth of 4.5 per cent in December 2018 while the mining sector output grew by 5.4 per cent as compared to a contraction of 1 per cent earlier. "The cumulative growth for the period of April to December 2019 over the corresponding period of the previous year stands at 0.5 per cent," it added

India's January inflation rises to 7.59 per cent

The <a href="https://www.wionews.com/business-economy/rbi-cuts-repo-rate-by-35-basis-points-to-540-loans-to-get-cheaper-241299">Reserve Bank of India</a>, for the second straight time, on Thursday kept its key policy rate unchanged at 5.15 per cent, maintaining its accommodative policy stance as long as it was necessary to revive growth.

<a href="https://www.wionews.com/business-economy/reserve-bank-of-india-cuts-repo-rate-by-25-bps-from-540-per-cent-to-515-per-cent-253649">Also Read: Reserve Bank of India cuts repo rate by 25 bps, &nbsp;from 5.40 per cent to 5.15 per cent</a>

The central bank retained GDP growth at 5 per cent for 2019-20 and pegged it at 6 per cent for the next fiscal.

"Economic activity remains subdued and the few indicators that have moved up recently are yet to gain traction in a more broad-based manner. Given the evolving growth-inflation dynamics, the MPC felt it appropriate to maintain status quo,"&nbsp;the Monetary Policy Committee (MPC) said.

The six-member committee voted unanimously to hold rates, but also said that there is ?policy space available for further action?. 
Between February and October 2019, the RBI had reduced repo rate by 135 basis points.

After leaving benchmark interest rates rates unchanged in the second consecutive policy review, RBI governor Shaktikanta Das said the central bank has many other instruments to address the sluggishness the economy, not just interest rates.

The Reserve Bank of India (RBI) in its sixth bi-monthly monetary policy pegged GDP growth for FY21 at 6 per cent, but guided towards an uncertain inflation outlook.

In a January 31 release, the National Statistical Office (NSO) had revised down real GDP growth for FY19 to 6.1 per cent from 6.8 per cent provided in the provisional estimates of May 2019. Given this, the central bank noted that the economy is still plagued by deep output gaps.

"The RBI has several instruments to address the sluggishness in the growth momentum," Das told reporters at the customary post-policy conference. The monetary policy committee (MPC) kept the policy repo rate unchanged at 5.15 per cent, continuing with the accommodative stance to revive growth.

The governor said the continuity in policy from last pause should not be read as a pointer to future actions. "While the decision is as per expectations, it is important not to discount RBI," he said.

The Reserve Bank of India, for the second straight time, on Thursday kept its key policy rate unchanged at 5.15 per cent, maintaining its accommodative policy stance as long as it was necessary to revive growth.

The Reserve Bank of India, for the second straight time, on Thursday kept its key policy rate unchanged at 5.15 per cent, maintaining its accommodative policy stance as long as it was necessary to revive growth. Also Read: Reserve Bank of India cuts repo rate by 25 bps, from 5.40 per cent to 5.15 per cent The central bank retained GDP growth at 5 per cent for 2019-20 and pegged it at 6 per cent for the next fiscal. "Economic activity remains subdued and the few indicators that have moved up recently are yet to gain traction in a more broad-based manner. Given the evolving growth-inflation dynamics, the MPC felt it appropriate to maintain status quo," the Monetary Policy Committee (MPC) said. The six-member committee voted unanimously to hold rates, but also said that there is ?policy space available for further action?. Between February and October 2019, the RBI had reduced repo rate by 135 basis points. After leaving benchmark interest rates rates unchanged in the second consecutive policy review, RBI governor Shaktikanta Das said the central bank has many other instruments to address the sluggishness the economy, not just interest rates. The Reserve Bank of India (RBI) in its sixth bi-monthly monetary policy pegged GDP growth for FY21 at 6 per cent, but guided towards an uncertain inflation outlook. In a January 31 release, the National Statistical Office (NSO) had revised down real GDP growth for FY19 to 6.1 per cent from 6.8 per cent provided in the provisional estimates of May 2019. Given this, the central bank noted that the economy is still plagued by deep output gaps. "The RBI has several instruments to address the sluggishness in the growth momentum," Das told reporters at the customary post-policy conference. The monetary policy committee (MPC) kept the policy repo rate unchanged at 5.15 per cent, continuing with the accommodative stance to revive growth. The governor said the continuity in policy from last pause should not be read as a pointer to future actions. "While the decision is as per expectations, it is important not to discount RBI," he said.

Reserve Bank of India keeps repo rate unchanged; predicts 6% GDP growth in next fiscal

Monetary policy has its limits and the Indian government will have to use fiscal measures and structural reforms to revive demand and support the sagging economy, Reserve Bank of India governor Shaktikanta Das said in a speech on Friday.

The economy is projected to grow 5% in the fiscal year due to end in March, its lowest growth rate in 11 years.

Das said the RBI had used the space that was opened up by the moderation in inflation early last year and started loosening monetary policy after having recognised the imminent slowdown in growth even before it was confirmed by data.

"Monetary policy, however, has its own limits," he said.

"Structural reforms and fiscal measures may have to be continued and further activated to provide a durable push to demand and boost growth".

Also read: <a href="https://www.wionews.com/business-economy/government-must-continue-reforms-announce-fiscal-measures-rbi-chief-shaktikanta-das-276417">Global economy seems to be moving into 'new, unsettling phase' - RBI Governor Shaktikanta Das</a>

Das was speaking at a college event in New Delhi ahead of the federal budget that is due to be presented on February&nbsp;1.

He said potential drivers of growth like prioritising food processing industries, tourism, e-commerce, start-ups and efforts to become a part of the global value chain could give a significant push to the economy.

"The government is also focusing on infrastructure spending which will augment the growth potential of the economy. States should also play an important role by enhancing capital expenditure which has a high multiplier effect," Das added.

Finance Minister Nirmala Sitharaman, who will announce the budget, is widely expected to include stimulus measures for small businesses and non-banking finance companies as a cut in corporate tax rates and rate cuts by the central bank have failed to revive growth.

The central bank, which has cut interest rates by a combined 135 basis points in five moves since February last year, kept rates on hold at its last review in December. It is expected to maintain sit tight on February&nbsp;6 as well.

Monetary policy has its limits and the Indian government will have to use fiscal measures and structural reforms to revive demand and support the sagging economy, Reserve Bank of India governor Shaktikanta Das said in a speech on Friday.

Monetary policy has its limits and the Indian government will have to use fiscal measures and structural reforms to revive demand and support the sagging economy, Reserve Bank of India governor Shaktikanta Das said in a speech on Friday. The economy is projected to grow 5% in the fiscal year due to end in March, its lowest growth rate in 11 years. Das said the RBI had used the space that was opened up by the moderation in inflation early last year and started loosening monetary policy after having recognised the imminent slowdown in growth even before it was confirmed by data. "Monetary policy, however, has its own limits," he said. "Structural reforms and fiscal measures may have to be continued and further activated to provide a durable push to demand and boost growth". Also read: Global economy seems to be moving into 'new, unsettling phase' - RBI Governor Shaktikanta Das Das was speaking at a college event in New Delhi ahead of the federal budget that is due to be presented on February 1. He said potential drivers of growth like prioritising food processing industries, tourism, e-commerce, start-ups and efforts to become a part of the global value chain could give a significant push to the economy. "The government is also focusing on infrastructure spending which will augment the growth potential of the economy. States should also play an important role by enhancing capital expenditure which has a high multiplier effect," Das added. Finance Minister Nirmala Sitharaman, who will announce the budget, is widely expected to include stimulus measures for small businesses and non-banking finance companies as a cut in corporate tax rates and rate cuts by the central bank have failed to revive growth. The central bank, which has cut interest rates by a combined 135 basis points in five moves since February last year, kept rates on hold at its last review in December. It is expected to maintain sit tight on February 6 as well.

Government must continue reforms, announce fiscal measures: RBI chief Shaktikanta Das

The Indian government appointed career central banker Michael Patra as one of the <a href="https://www.wionews.com/business-economy/owing-to-rising-food-prices-indias-december-retail-inflation-surges-to-735-274063">Reserve Bank of India's</a> four deputy governors for a three-year term, it said in a statement on Tuesday.

He will fill a vacancy left by former deputy governor Viral Acharya, who resigned last June, six months before the scheduled end of his term in office.

Acharya cited personal reasons for his departure but had previously clashed with Prime Minister <a href="https://www.wionews.com/india-news/p-chidambaram-attacks-modi-govt-over-sliding-economy-and-unemployment-274135">Narendra Modi's</a> government over an erosion of the central bank's independence.

He was the third key senior central bank official under the Modi government to resign, following the departures of former RBI governors Raghuram Rajan in 2016 and Urjit Patel in December 2018.

Patra, currently an executive director at the RBI, had applied for a deputy governor's post in 2017.

He has been a part of the central bank's monetary policy committee since its inception and has long been viewed as a monetary policy hawk.

However, since Governor Shaktikanta Das took office in December, Patra has voted for three successive rate cuts and has said the economy needs fiscal support in the current environment.

"It's an excellent decision. He is an accomplished monetary economist with not just strong academic credentials but also has a rich understanding of ground-level economic realities of India. This is the best choice in my opinion," said <a href="https://www.wionews.com/business-economy/indias-october-retail-inflation-rises-to-462-per-cent-261864">Rupa Rege Nitsure</a>, chief economist at L&amp;T Financial Holdings.

The Indian government appointed career central banker Michael Patra as one of the Reserve Bank of India's four deputy governors for a three-year term, it said in a statement on Tuesday.

The Indian government appointed career central banker Michael Patra as one of the Reserve Bank of India's four deputy governors for a three-year term, it said in a statement on Tuesday. He will fill a vacancy left by former deputy governor Viral Acharya, who resigned last June, six months before the scheduled end of his term in office. Acharya cited personal reasons for his departure but had previously clashed with Prime Minister Narendra Modi's government over an erosion of the central bank's independence. He was the third key senior central bank official under the Modi government to resign, following the departures of former RBI governors Raghuram Rajan in 2016 and Urjit Patel in December 2018. Patra, currently an executive director at the RBI, had applied for a deputy governor's post in 2017. He has been a part of the central bank's monetary policy committee since its inception and has long been viewed as a monetary policy hawk. However, since Governor Shaktikanta Das took office in December, Patra has voted for three successive rate cuts and has said the economy needs fiscal support in the current environment. "It's an excellent decision. He is an accomplished monetary economist with not just strong academic credentials but also has a rich understanding of ground-level economic realities of India. This is the best choice in my opinion," said Rupa Rege Nitsure, chief economist at L&T Financial Holdings.

Government appoints Michael Patra as RBI Deputy Governor

The Supreme Court on Tuesday asked the Centre to look into public interest litigation (<a href="https://www.wionews.com/entertainment/bharat-delhi-high-court-dismisses-pil-against-salman-khans-film-223922">PIL</a>) against Reserve Bank of India's (<a href="https://www.wionews.com/india-news/rbi-official-steal-money-rs-90-lakh-caught-red-handed-30090">RBI</a>) decision to exchange Rs 30 crores worth of banknotes which were defaced by separatist groups in Kashmir in 2013.

A Bench headed by Chief Justice of India, <a href="https://www.wionews.com/india-news/justice-sharad-arvind-bobde-47th-chief-justice-of-india-who-advocates-use-of-artificial-intelligence-in-courts-262959">Sharad Arvind Bobde</a>, has asked the Solicitor General Tushar Mehta, to reply within two weeks as "it is a matter of national importance."

The plea filed by one Satish Bhardwaj has called for the Central Bureau of Investigation (<a href="https://www.wionews.com/opinions/cbi-vs-cbi-cleaning-the-rot-within-176144">CBI</a>) investigation against RBI for allowing notes to be exchanged. Bhardwaj has alleged that he had moved RBI and CBI for action into the matter in 2013 itself but did not get any response.

The Supreme Court on Tuesday asked the Centre to look into public interest litigation (PIL) against Reserve Bank of India's (RBI) decision to exchange Rs 30 crores worth of banknotes which were defaced by separatist groups in Kashmir in 2013.

The Supreme Court on Tuesday asked the Centre to look into public interest litigation (PIL) against Reserve Bank of India's (RBI) decision to exchange Rs 30 crores worth of banknotes which were defaced by separatist groups in Kashmir in 2013. A Bench headed by Chief Justice of India, Sharad Arvind Bobde, has asked the Solicitor General Tushar Mehta, to reply within two weeks as "it is a matter of national importance." The plea filed by one Satish Bhardwaj has called for the Central Bureau of Investigation (CBI) investigation against RBI for allowing notes to be exchanged. Bhardwaj has alleged that he had moved RBI and CBI for action into the matter in 2013 itself but did not get any response.

Supreme Court asks Centre to look into PIL against RBI's decision on banknotes defaced by separatists in Kashmir

The <a href="https://www.wionews.com/india-news/india-is-witnessing-temporary-effects-of-global-slowdown-amit-shah-270648">Reserve Bank of India's</a> move to widen its third special open market operation (OMO) helped bonds rise on Friday but worries over a likely fiscal slippage and a surge in global crude prices capped the gains.

The Indian central bank has offered to buy a wider range of papers at the latest auction as against just the benchmark 10-year at the first two OMOs, making it more attractive for participants.

The central bank announced its first-ever special open market operation to simultaneously purchase and sell bonds in the market on December&nbsp;19 to manage bond yields which had been rising despite five consecutive rate cuts.

Yields are down 25 basis points since the announcement of the first auction after having risen as much as 37 bps since the RBI shocked markets by keeping rates on hold on December5.

"The fundamentals are turning adverse for the bond market but the RBI has managed to prevent yields from rising," said <a href="https://www.wionews.com/business-economy/india-to-launch-first-debt-exchange-traded-fund-266182">A. Prasanna</a>, an economist with <a href="https://www.wionews.com/business-economy/india-seen-making-sixth-interest-rate-cut-but-no-cure-for-economys-ills-265905">ICICI Securities</a> Primary Dealership.

"It is good news for the government and other borrowers but whether this equilibrium can sustain is doubtful."

The benchmark 10-year bond yield dropped as much as 3 bps to 6.48 per cent&nbsp;on Friday and traders said they expected yields to stay capped at 6.55 per cent levels in the near term despite broader economic concerns.

Brent crude futures jumped close to $3 to their highest since September after a <a href="https://www.wionews.com/world/rocket-attack-on-baghdad-airport-top-iran-commander-killed-271756">US&nbsp;airstrike</a> killed key Iranian and Iraqi military personnel, raising concerns that escalating Middle East tensions may disrupt oil supplies.

Market participants broadly expect the government to announce a 0.4 per cent-0.6 per cent&nbsp;slippage in fiscal deficit and that could result in 500 billion rupees-600 billion rupees ($6.97 billion-$8.37 billion) worth of additional borrowing.

Yields are expected to rise on the back of increased borrowing but traders expect the RBI to continue to manage yields at least until the budget, which is likely to be announced on February&nbsp;1.

The consensus is for at least two more special OMOs before the end of the month.

"The RBI has got themselves into a situation where they cannot stop now. Yields will jump the day they stop. There is a way to manage the markets and the RBI now has to live up to the expectations that it has built," a senior debt trader at a private bank said.

The Reserve Bank of India's move to widen its third special open market operation (OMO) helped bonds rise on Friday but worries over a likely fiscal slippage and a surge in global crude prices capped the gains.

The Reserve Bank of India's move to widen its third special open market operation (OMO) helped bonds rise on Friday but worries over a likely fiscal slippage and a surge in global crude prices capped the gains. The Indian central bank has offered to buy a wider range of papers at the latest auction as against just the benchmark 10-year at the first two OMOs, making it more attractive for participants. The central bank announced its first-ever special open market operation to simultaneously purchase and sell bonds in the market on December 19 to manage bond yields which had been rising despite five consecutive rate cuts. Yields are down 25 basis points since the announcement of the first auction after having risen as much as 37 bps since the RBI shocked markets by keeping rates on hold on December5. "The fundamentals are turning adverse for the bond market but the RBI has managed to prevent yields from rising," said A. Prasanna, an economist with ICICI Securities Primary Dealership. "It is good news for the government and other borrowers but whether this equilibrium can sustain is doubtful." The benchmark 10-year bond yield dropped as much as 3 bps to 6.48 per cent on Friday and traders said they expected yields to stay capped at 6.55 per cent levels in the near term despite broader economic concerns. Brent crude futures jumped close to $3 to their highest since September after a US airstrike killed key Iranian and Iraqi military personnel, raising concerns that escalating Middle East tensions may disrupt oil supplies. Market participants broadly expect the government to announce a 0.4 per cent-0.6 per cent slippage in fiscal deficit and that could result in 500 billion rupees-600 billion rupees ($6.97 billion-$8.37 billion) worth of additional borrowing. Yields are expected to rise on the back of increased borrowing but traders expect the RBI to continue to manage yields at least until the budget, which is likely to be announced on February 1. The consensus is for at least two more special OMOs before the end of the month. "The RBI has got themselves into a situation where they cannot stop now. Yields will jump the day they stop. There is a way to manage the markets and the RBI now has to live up to the expectations that it has built," a senior debt trader at a private bank said.

Indian bonds gain as India's central bank, RBI, widens third special Open Market Operation

The Reserve Bank of India on Friday released its 'Financial Stability Report' and said that despite weakening domestic growth, India's financial system remains stable, news agency ANI reported.&nbsp;

The RBI stated that the banking sector's resilience has improved, however, "risks from global/domestic economic uncertainties and geopolitical developments persist".&nbsp;

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet">
RBI releases Financial Stability Report. It states 'India’s financial system remains stable notwithstanding weakening domestic growth; resilience of banking sector has improved. Risks from global/domestic economic uncertainties &amp; geopolitical developments, however, persist' <a href="https://t.co/rUtFozRUUU">pic.twitter.com/rUtFozRUUU</a>
— ANI (@ANI) <a href="https://twitter.com/ANI/status/1210544432627347457?ref_src=twsrc%5Etfw">December 27, 2019</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>

Meanwhile, Union Home Minister Amit Shah on Friday said that India is witnessing the "<a href="https://www.wionews.com/india-news/india-is-witnessing-temporary-effects-of-global-slowdown-amit-shah-270648">temporary effects of a global slowdown</a>" and that Finance Minister Nirmala Sitharaman is working day and night to fight it.&nbsp;

"I believe the Indian economy will be the first to be free from the slowdown in the world," Shah said at an event today.&nbsp;

Shah's comments came while he was addressing investors at the first groundbreaking ceremony of Himachal Pradesh Global Investors Meet-2019 in Shimla, Himachal Pradesh.

Shah said the government was working to deal with the effect of the slowdown.

The minister said Finance Minister Nirmala Sitharaman and her deputy Anurag Thakur were working on working are on various plans to fight with this global slowdown under the leadership of Prime Minister Narendra Modi.

(With inputs from ANI)&nbsp;

The Reserve Bank of India on Friday released its 'Financial Stability Report' and said that despite weakening domestic growth, India's financial system remains stable, news agency ANI reported.

The Reserve Bank of India on Friday released its 'Financial Stability Report' and said that despite weakening domestic growth, India's financial system remains stable, news agency ANI reported. The RBI stated that the banking sector's resilience has improved, however, "risks from global/domestic economic uncertainties and geopolitical developments persist". RBI releases Financial Stability Report. It states 'India’s financial system remains stable notwithstanding weakening domestic growth; resilience of banking sector has improved. Risks from global/domestic economic uncertainties & geopolitical developments, however, persist' pic.twitter.com/rUtFozRUUU — ANI (@ANI) December 27, 2019 × Meanwhile, Union Home Minister Amit Shah on Friday said that India is witnessing the "temporary effects of a global slowdown" and that Finance Minister Nirmala Sitharaman is working day and night to fight it. "I believe the Indian economy will be the first to be free from the slowdown in the world," Shah said at an event today. Shah's comments came while he was addressing investors at the first groundbreaking ceremony of Himachal Pradesh Global Investors Meet-2019 in Shimla, Himachal Pradesh. Shah said the government was working to deal with the effect of the slowdown. The minister said Finance Minister Nirmala Sitharaman and her deputy Anurag Thakur were working on working are on various plans to fight with this global slowdown under the leadership of Prime Minister Narendra Modi. (With inputs from ANI)

India's financial system stable despite weakening domestic growth: RBI

The <a href="https://www.wionews.com/business-%26-economy/indian-rupee-since-independence-a-brief-history-159436">Indian&nbsp;rupee</a>&nbsp;will not recover lost ground in the coming&nbsp;year, according to a&nbsp;Reuters&nbsp;poll&nbsp;of currency strategists who are more pessimistic than last month amid doubts over any kind of trade truce between the United States and China.

Most emerging markets currencies have depreciated against the <a href="https://www.wionews.com/business-economy/rupee-slips-17-paise-to-6932-vs-us-dollar-in-early-trade-230729">US&nbsp;dollar</a>, hurt by the tit-for-tat trade war between the world's two largest economies, and there are scant signs of a resolution anytime soon.

Also weighing on the currency's outlook, the <a href="https://www.wionews.com/business-economy/india-seen-making-sixth-interest-rate-cut-but-no-cure-for-economys-ills-265905">Reserve Bank of India </a>has cut its key interest rate by 135 basis points&nbsp;so far this&nbsp;year&nbsp;to support a slowing economy. It is expected to cut the repo rate by another 25 basis points to 4.90 per cent&nbsp;on Thursday.

"Global trade talks are turning topsy-turvy, a lot will depend on how that plays out. Domestically, the tide has turned rough for the <a href="https://www.wionews.com/videos/reserve-bank-of-india-scales-down-printing-of-inr-2000-notes-188206">INR</a>, led by tapering of domestic growth optimism and fiscal worries - all weighing on the&nbsp;rupee's way forward," Madhavi Arora, lead economist, FX and rates at Edelweiss Securities said.

"After December's rate cut&nbsp;reforms in the banking sector and strong infrastructure investments are needed in addition to a monetary stimulus to help growth and the&nbsp;rupee."

The December 2-4&nbsp;poll, taken before the monetary policy committee's announcement due later on Thursday, showed the currency would weaken 0.6 per cent&nbsp;to 72.00 per dollar in a&nbsp;year&nbsp;from 71.57 where it was trading around on Wednesday.

The&nbsp;year&nbsp;ahead outlook was the most pessimistic for the&nbsp;rupee&nbsp;since October.

Over the coming&nbsp;year, 23 of 51 strategists expected the&nbsp;rupee&nbsp;to breach 72.40 against the dollar&nbsp;its weakest trade this&nbsp;year. Six of those expected it to weaken beyond its lifetime low of 74.48 per dollar.

But a few analysts argued the&nbsp;rupee's weakness was a deliberate attempt by the RBI to boost exports that have been on a downward trend.

"There is a conscious effort by the RBI to provide a depreciation bias to the&nbsp;rupee. That could probably become a new norm for at&nbsp;least&nbsp;sometimes, so the export sector slightly benefits," said Upasna Bhardwaj, senior economist at Kotak Mahindra Bank.

"The pace at which the RBI has been buying dollars clearly signals a new policy the RBI is adopting. Its bias for a relatively weaker currency will determine its direction. This is an unsaid policy obviously, but through actions like dollar purchases it is suggestive of that."

The Indian rupee will not recover lost ground in the coming year, according to a Reuters poll of currency strategists who are more pessimistic than last month amid doubts over any kind of trade truce between the United States and China.

The Indian rupee will not recover lost ground in the coming year, according to a Reuters poll of currency strategists who are more pessimistic than last month amid doubts over any kind of trade truce between the United States and China. Most emerging markets currencies have depreciated against the US dollar, hurt by the tit-for-tat trade war between the world's two largest economies, and there are scant signs of a resolution anytime soon. Also weighing on the currency's outlook, the Reserve Bank of India has cut its key interest rate by 135 basis points so far this year to support a slowing economy. It is expected to cut the repo rate by another 25 basis points to 4.90 per cent on Thursday. "Global trade talks are turning topsy-turvy, a lot will depend on how that plays out. Domestically, the tide has turned rough for the INR, led by tapering of domestic growth optimism and fiscal worries - all weighing on the rupee's way forward," Madhavi Arora, lead economist, FX and rates at Edelweiss Securities said. "After December's rate cut reforms in the banking sector and strong infrastructure investments are needed in addition to a monetary stimulus to help growth and the rupee." The December 2-4 poll, taken before the monetary policy committee's announcement due later on Thursday, showed the currency would weaken 0.6 per cent to 72.00 per dollar in a year from 71.57 where it was trading around on Wednesday. The year ahead outlook was the most pessimistic for the rupee since October. Over the coming year, 23 of 51 strategists expected the rupee to breach 72.40 against the dollar its weakest trade this year. Six of those expected it to weaken beyond its lifetime low of 74.48 per dollar. But a few analysts argued the rupee's weakness was a deliberate attempt by the RBI to boost exports that have been on a downward trend. "There is a conscious effort by the RBI to provide a depreciation bias to the rupee. That could probably become a new norm for at least sometimes, so the export sector slightly benefits," said Upasna Bhardwaj, senior economist at Kotak Mahindra Bank. "The pace at which the RBI has been buying dollars clearly signals a new policy the RBI is adopting. Its bias for a relatively weaker currency will determine its direction. This is an unsaid policy obviously, but through actions like dollar purchases it is suggestive of that."

Indian Rupee on slippery slope for at least a year: Sources

Five interest rate cuts since the start of the year hasn't stopped India's economy from slowing to its weakest growth rate since 2013, but the&nbsp;Reserve Bank of India&nbsp;is expected to make its sixth cut on Thursday to give what little relief it can.

<a href="https://www.wionews.com/business-economy/indias-q2-gdp-falls-to-45-lowest-in-6-years-265259">Growing by 4.5&nbsp;per cent</a>&nbsp;annually in the June-September quarter, down from 7 per cent&nbsp;a year earlier, the economy is expanding well below the rate needed to generate enough jobs for the millions of younth&nbsp;entering the labour market each month.

The gross domestic product numbers released on Friday showed government spending helping to prop up weak demand, but private investment growth had virtually collapsed, with a crisis in the shadow banking sector causing illiquidity in the economy.

A Reuters poll of 70 economists predicted the RBI would cut its repo rate by 25 basis points (bps) to 4.90 per cent&nbsp;when the monetary policy committee's decision is announced on Thursday, and then by another 15 bps in the second quarter of 2020, where it will stay at least until 2021.

A 25 bps cut would take the cumulative rate cuts by Asia's most aggressive central bank to 160 bps since February and will be the most in a calendar year since 2009.

Madhavi Arora, economist forex and rates at Edelweiss Securities, said the RBI faced "a tough policy dilemma", as economic growth was underperforming, inflation was overshooting, and the government lacked fiscal room to manoeuvre.

She said the latest GDP numbers supported the view in Edelweiss that the RBI will ease "by at least another 50 bps in this cycle, despite an uptick in inflation beyond the 4 per cent&nbsp;comfort zone in the coming months."

Annual retail inflation rose to 4.62 per cent&nbsp;last month, climbing above 4 per cent&nbsp;for the first time in 15 months and up from 3.99 per cent&nbsp;in September.

Analysts believe transient factors were to blame, so the central bank still had room to continue cutting rates.

The September industrial output too contracted 4.3 per cent, following a decline of 1.4 per cent&nbsp;in August.

At its policy review in October, the RBI sharply lowered its growth projection for 2019/20 (April-March) by 80 bps to 6.1 per cent, but most economists expect another downward revision on Thursday.

Rate cuts alone are however expected to do little to revive growth and calls for more direct fiscal stimulus have grown in recent weeks.

A significant minority of economists - 24 of 56 - who answered an additional question in the poll said rate cuts would marginally boost the economy, while nearly a third said they would have little or no impact.

Anagha Deodhar, an economist at ICICI Securities in Mumbai said there was a strong case for an interest rate on Thursday, though monetary policy has limited benefits in the current circumstances.

"Hence, fiscal policy will have to do the heavy-lifting to boost growth. Sector-specific measures and increased government spending could be the quickest way to boost growth in the near term," Deodhar said.

Five interest rate cuts since the start of the year hasn't stopped India's economy from slowing to its weakest growth rate since 2013, but the Reserve Bank of India is expected to make its sixth cut on Thursday to give what little relief it can.

Five interest rate cuts since the start of the year hasn't stopped India's economy from slowing to its weakest growth rate since 2013, but the Reserve Bank of India is expected to make its sixth cut on Thursday to give what little relief it can. Growing by 4.5 per cent annually in the June-September quarter, down from 7 per cent a year earlier, the economy is expanding well below the rate needed to generate enough jobs for the millions of younth entering the labour market each month. The gross domestic product numbers released on Friday showed government spending helping to prop up weak demand, but private investment growth had virtually collapsed, with a crisis in the shadow banking sector causing illiquidity in the economy. A Reuters poll of 70 economists predicted the RBI would cut its repo rate by 25 basis points (bps) to 4.90 per cent when the monetary policy committee's decision is announced on Thursday, and then by another 15 bps in the second quarter of 2020, where it will stay at least until 2021. A 25 bps cut would take the cumulative rate cuts by Asia's most aggressive central bank to 160 bps since February and will be the most in a calendar year since 2009. Madhavi Arora, economist forex and rates at Edelweiss Securities, said the RBI faced "a tough policy dilemma", as economic growth was underperforming, inflation was overshooting, and the government lacked fiscal room to manoeuvre. She said the latest GDP numbers supported the view in Edelweiss that the RBI will ease "by at least another 50 bps in this cycle, despite an uptick in inflation beyond the 4 per cent comfort zone in the coming months." Annual retail inflation rose to 4.62 per cent last month, climbing above 4 per cent for the first time in 15 months and up from 3.99 per cent in September. Analysts believe transient factors were to blame, so the central bank still had room to continue cutting rates. The September industrial output too contracted 4.3 per cent, following a decline of 1.4 per cent in August. At its policy review in October, the RBI sharply lowered its growth projection for 2019/20 (April-March) by 80 bps to 6.1 per cent, but most economists expect another downward revision on Thursday. Rate cuts alone are however expected to do little to revive growth and calls for more direct fiscal stimulus have grown in recent weeks. A significant minority of economists - 24 of 56 - who answered an additional question in the poll said rate cuts would marginally boost the economy, while nearly a third said they would have little or no impact. Anagha Deodhar, an economist at ICICI Securities in Mumbai said there was a strong case for an interest rate on Thursday, though monetary policy has limited benefits in the current circumstances. "Hence, fiscal policy will have to do the heavy-lifting to boost growth. Sector-specific measures and increased government spending could be the quickest way to boost growth in the near term," Deodhar said.

RBI likely to slash interest rates for 6th time on December 5 to support growth

The Reserve Bank of India (RBI) has filed an application to initiate insolvency proceedings against mortgage lender Dewan Housing Finance Ltd (DHFL). 
 
The application was filed with Mumbai bench of the National Company Law Tribunal (NCLT). An interim moratorium will start from the date of filing of the application till its admission or rejection, said the central bank in a statement. 
 
On November 20, the RBI superseded DHFL's board of directors and appointed former banker R Subramaniakumar the administrator. Two days later, it appointed a three-member advisory committee to assist him in recovering nearly Rs 84,000 crore that the troubled company owes to the system. 
 
Reports say DHFL owed Rs 83,873 crore to banks, the National Housing Board, mutual funds and bondholders, including retail bondholders, as of July. 
 
The stressed home financier last week said it will not be able to declare financial results on the scheduled date as the new administrator needs to have detailed discussions with the statutory auditors. 
 
Earlier, DHFL had defaulted on its payment obligations in respect of bank and market borrowings which exposed serious concerns about its conduct of functioning. 
 
In recent months, several DHFL lenders were working on a resolution plan to pick up 51 per cent in the company by converting a part of their debt into equity. That was until the RBI intervened last week. 
 
On November 15, the government empowered the RBI to refer stressed non-banking finance companies and housing finance companies having assets worth at least Rs 500 crore to the insolvency court. 
 
With this, DHFL is the first non-bank lender to be referred to the NCLT under new rules.

The Reserve Bank of India (RBI) has filed an application to initiate insolvency proceedings against mortgage lender Dewan Housing Finance Ltd (DHFL). The application was filed with Mumbai bench of the National Company Law Tribunal (NCLT).

The Reserve Bank of India (RBI) has filed an application to initiate insolvency proceedings against mortgage lender Dewan Housing Finance Ltd (DHFL). The application was filed with Mumbai bench of the National Company Law Tribunal (NCLT). An interim moratorium will start from the date of filing of the application till its admission or rejection, said the central bank in a statement. On November 20, the RBI superseded DHFL's board of directors and appointed former banker R Subramaniakumar the administrator. Two days later, it appointed a three-member advisory committee to assist him in recovering nearly Rs 84,000 crore that the troubled company owes to the system. Reports say DHFL owed Rs 83,873 crore to banks, the National Housing Board, mutual funds and bondholders, including retail bondholders, as of July. The stressed home financier last week said it will not be able to declare financial results on the scheduled date as the new administrator needs to have detailed discussions with the statutory auditors. Earlier, DHFL had defaulted on its payment obligations in respect of bank and market borrowings which exposed serious concerns about its conduct of functioning. In recent months, several DHFL lenders were working on a resolution plan to pick up 51 per cent in the company by converting a part of their debt into equity. That was until the RBI intervened last week. On November 15, the government empowered the RBI to refer stressed non-banking finance companies and housing finance companies having assets worth at least Rs 500 crore to the insolvency court. With this, DHFL is the first non-bank lender to be referred to the NCLT under new rules.

RBI files application for bankruptcy proceedings against DHFL

India's central bank said on Wednesday it would initiate bankruptcy proceedings against <a href="https://www.wionews.com/business-economy/dhfl-board-approves-plan-to-convert-debt-into-equity-sell-assets-246667">Dewan Housing Finance Ltd (DHFL)</a>, as it seeks to address governance concerns and defaults at what was once one of the country's biggest shadow lenders.

The Reserve Bank of India said it had superseded the board of DHFL and appointed R Subramaniakumar, the former chief executive of state-run Indian Overseas Bank as the administrator.

DHFL's creditors include mutual funds, pension funds, insurance firms and a wide array of retail investors, and its collapse could impact India's already ailing banking sector and further weaken economic growth. The firm owes lenders close to 1 trillion rupees ($14 billion).

India's shadow banking sector has been under stress after a string of defaults by Infrastructure Leasing and Financial Service Ltd (IL&amp;FS) last year triggered fears about contagion in the financial sector.

DHFL had in September submitted a draft resolution plan proposing to convert debt to equity, while seeking to sell assets and raise more capital.

India's central bank said on Wednesday it would initiate bankruptcy proceedings against Dewan Housing Finance Ltd (DHFL), as it seeks to address governance concerns and defaults at what was once one of the country's biggest shadow lenders.

India's central bank said on Wednesday it would initiate bankruptcy proceedings against Dewan Housing Finance Ltd (DHFL), as it seeks to address governance concerns and defaults at what was once one of the country's biggest shadow lenders. The Reserve Bank of India said it had superseded the board of DHFL and appointed R Subramaniakumar, the former chief executive of state-run Indian Overseas Bank as the administrator. DHFL's creditors include mutual funds, pension funds, insurance firms and a wide array of retail investors, and its collapse could impact India's already ailing banking sector and further weaken economic growth. The firm owes lenders close to 1 trillion rupees ($14 billion). India's shadow banking sector has been under stress after a string of defaults by Infrastructure Leasing and Financial Service Ltd (IL&FS) last year triggered fears about contagion in the financial sector. DHFL had in September submitted a draft resolution plan proposing to convert debt to equity, while seeking to sell assets and raise more capital.

RBI to begin bankruptcy proceedings against shadow lender DHFL

Indian retail inflation probably exceeded the Reserve Bank of India's ( RBI) medium-term target of 4 per cent&nbsp;in October for the first time in 15 months, mainly because of rising vegetable prices, a Reuters poll of economists showed.

Prices of most vegetables climbed during the month as monsoon downpours delayed harvests and disrupted supplies. That was despite a government ban on onion exports, a key component in the Indian diet.

Overall food prices - the biggest chunk of the consumer price basket - also rose in October.

The November 4-7 Reuters poll of 39 economists forecast annual consumer price inflation rose to 4.25 per cent&nbsp;in October, its highest since June 2018 and above 3.99 per cent in September.

Nearly 85 per cent of respondents forecast retail inflation, due on November&nbsp;12, to breach the RBI's medium-term target.

"Vegetable prices, particularly that of onions and tomatoes, will contribute significantly to the rise in inflation," said Teresa John, an economist at Nirmal Bang, a retail brokerage.

"We expect the RBI to maintain its easing bias on the back of sluggish growth and weak core inflation pressures despite rising headline inflation led by food prices."

The RBI has cut its key interest rate by a cumulative 135 basis points this year to 5.15 per cent. The central bank is expected to cut the repo rate in December for the sixth meeting in a row, according to a separate Reuters poll. That view primarily stems from a slowing economy.

Despite easy monetary and fiscal policy, recent business surveys indicate the economy, which slowed to a six-year low of 5 per cent growth during the second quarter, is still struggling and is not expected to recover anytime soon.

If those forecasts are realised, it will be the first time since October 2016 the RBI has cut rates even though inflation is above the central bank's medium-term target.

"I think their (RBI) objective now and their policy equation is focused on reviving growth, and they have been very forthcoming in communicating that," said Sakshi Gupta, senior India economist at HDFC Bank.

"So, I think they still have space to cut rates further right now - given whatever the dynamics of inflation are."

The wholesale price index probably remained flat last month, the lowest in nearly three and a half years. The WPI was the preferred gauge for the RBI before the consumer price index was introduced on early 2012.&nbsp;&nbsp; &nbsp;

Indian retail inflation probably exceeded the Reserve Bank of India's ( RBI) medium-term target of 4 per cent in October for the first time in 15 months, mainly because of rising vegetable prices, a Reuters poll of economists showed.

Indian retail inflation probably exceeded the Reserve Bank of India's ( RBI) medium-term target of 4 per cent in October for the first time in 15 months, mainly because of rising vegetable prices, a Reuters poll of economists showed. Prices of most vegetables climbed during the month as monsoon downpours delayed harvests and disrupted supplies. That was despite a government ban on onion exports, a key component in the Indian diet. Overall food prices - the biggest chunk of the consumer price basket - also rose in October. The November 4-7 Reuters poll of 39 economists forecast annual consumer price inflation rose to 4.25 per cent in October, its highest since June 2018 and above 3.99 per cent in September. Nearly 85 per cent of respondents forecast retail inflation, due on November 12, to breach the RBI's medium-term target. "Vegetable prices, particularly that of onions and tomatoes, will contribute significantly to the rise in inflation," said Teresa John, an economist at Nirmal Bang, a retail brokerage. "We expect the RBI to maintain its easing bias on the back of sluggish growth and weak core inflation pressures despite rising headline inflation led by food prices." The RBI has cut its key interest rate by a cumulative 135 basis points this year to 5.15 per cent. The central bank is expected to cut the repo rate in December for the sixth meeting in a row, according to a separate Reuters poll. That view primarily stems from a slowing economy. Despite easy monetary and fiscal policy, recent business surveys indicate the economy, which slowed to a six-year low of 5 per cent growth during the second quarter, is still struggling and is not expected to recover anytime soon. If those forecasts are realised, it will be the first time since October 2016 the RBI has cut rates even though inflation is above the central bank's medium-term target. "I think their (RBI) objective now and their policy equation is focused on reviving growth, and they have been very forthcoming in communicating that," said Sakshi Gupta, senior India economist at HDFC Bank. "So, I think they still have space to cut rates further right now - given whatever the dynamics of inflation are." The wholesale price index probably remained flat last month, the lowest in nearly three and a half years. The WPI was the preferred gauge for the RBI before the consumer price index was introduced on early 2012.

India's inflation probably breached RBI target last month: Poll

Indian shares extended gains seen through the week on Friday, as a raft of strong earnings raised expectations of a better December quarter.

Broader Asian shares reversed early losses with MSCI`s broadest index of Asia-Pacific shares outside Japan inching up 0.16 per cent&nbsp;after a surprise bounce in Chinese manufacturing activity boosted investor sentiment.

In domestic markets, the broader NSE index&nbsp;was up 0.23 per cent&nbsp;at 11,904.05 as of 0405 GMT, while the benchmark BSE index&nbsp;was 0.25 per cent&nbsp;higher at 40,219.86.

Indian shares have seen steady gains in the last few sessions buoyed by positive global cues, a strong set of corporate results and expectations of a better third quarter.

The Nifty Media index&nbsp;rose as much as 3.49 per cent, gaining the most among the 14 sectoral NSE indexes.

The Nifty PSU Bank index, which tracks the country`s state-run lenders, rose as much as 0.83 per cent, with shares of Central Bank of India rising nearly 6 per cent.

"Today is the first day of the new derivative segment and we have had one of the best months in the last four months, so that positivity has continued," said A.K. Prabhakar, head of research at IDBI Capital in Mumbai.

Auto stocks will be in focus on Friday as automakers are set to report their monthly sales data. The Nifty Auto index&nbsp;inched up 0.24 per cent&nbsp;in early trade.

Shares of lender Yes Bank Ltd were flat ahead of quarterly results announcement.

State-owned oil retailer<a href="https://www.wionews.com/business-economy/indian-oil-profit-tanks-83-as-refining-margins-shrink-259071"> Indian Oil Corporation</a> Ltd slipped as much as 4.22 per cent&nbsp;and was the biggest loser on the NSE index after the refiner recorded an 83 per cent&nbsp;slide in quarterly profit.

Meanwhile, India`s fiscal deficit in the six months through September approached 93 per cent&nbsp;of the target for the full year, limiting the scope for Prime Minister Narendra Modi to consider more tax cuts to boost economic growth.

Indian shares extended gains seen through the week on Friday, as a raft of strong earnings raised expectations of a better December quarter. Broader Asian shares reversed early losses with MSCI`s broadest index of Asia-Pacific shares outside Japan inching up 0.

Indian shares extended gains seen through the week on Friday, as a raft of strong earnings raised expectations of a better December quarter. Broader Asian shares reversed early losses with MSCI`s broadest index of Asia-Pacific shares outside Japan inching up 0.16 per cent after a surprise bounce in Chinese manufacturing activity boosted investor sentiment. In domestic markets, the broader NSE index was up 0.23 per cent at 11,904.05 as of 0405 GMT, while the benchmark BSE index was 0.25 per cent higher at 40,219.86. Indian shares have seen steady gains in the last few sessions buoyed by positive global cues, a strong set of corporate results and expectations of a better third quarter. The Nifty Media index rose as much as 3.49 per cent, gaining the most among the 14 sectoral NSE indexes. The Nifty PSU Bank index, which tracks the country`s state-run lenders, rose as much as 0.83 per cent, with shares of Central Bank of India rising nearly 6 per cent. "Today is the first day of the new derivative segment and we have had one of the best months in the last four months, so that positivity has continued," said A.K. Prabhakar, head of research at IDBI Capital in Mumbai. Auto stocks will be in focus on Friday as automakers are set to report their monthly sales data. The Nifty Auto index inched up 0.24 per cent in early trade. Shares of lender Yes Bank Ltd were flat ahead of quarterly results announcement. State-owned oil retailer Indian Oil Corporation Ltd slipped as much as 4.22 per cent and was the biggest loser on the NSE index after the refiner recorded an 83 per cent slide in quarterly profit. Meanwhile, India`s fiscal deficit in the six months through September approached 93 per cent of the target for the full year, limiting the scope for Prime Minister Narendra Modi to consider more tax cuts to boost economic growth.

Nifty, Sensex extend gains, Indian Oil Corporation drops after weak results

So, it's all good to blame the system and live in denial, the most important question is - what should be done to resolve the crisis in the PMC 
&nbsp;Bank?

Whatever the government does now, will amount to only damage control. But what should the government do?

On the WION edit, we will explore this question.

Bore we discuss the possible solutions, it should be underlined that blaming the previous government is not a solution.&nbsp;

For 11 years, the fraud has gone unnoticed by the regulator - RBI and the governments - both UPA and NDA.

Trying to score political points out of it will only increase public anger. Because it's not the politicians who have lost their personal savings, it's the people.

So blame game is not the way forward. For no fault of their, the depositors of PMC bank are bearing the brunt. 
 
First, the central government, the state government and the RBI must ensure that the depositors get their money back at the earliest.

This is not public service, all these three parties are involved in this mess. The state regulator of Maharashtra,&nbsp;the central government and the banking regulator.

Second, check the other top cooperative banks. If this bank could be held hostage by bad loans to one corporate house, what about the other banks?

It's important to know the scale of the problem to address it. The worry is - such bad practices could be the norm in other co-operative banks too.

Third, force the Reserve Bank of India to ensure that projects are checked thoroughly before giving out loans. This is a double-edged sword. Already, economic growth has slowed down. Lending is essential to revive the economy.

But indiscriminate lending once again will place India's banking sector in deep, deep trouble. The government should chart out ways to solve this dilemma instead of passing the blame on the previous governments.

Fourth, punish the bankers of PMC bank and the auditors too. It's inconceivable that this scam continued without the full backing of auditors.

Finally, it's time to make the insolvency and bankruptcy proceedings more efficient and faster. That's the only way to get money back from the corporate.

Better transparency in the banking sector as a whole is the solution. Swift resolution is the need of the hour. At some stage, the government has to merge or liquidate this bank.

(Disclaimer: WION Edit is the channel's take on the big events of the world)

 
&nbsp;

So, it's all good to blame the system and live in denial, the most important question is - what should be done to resolve the crisis in the PMC Bank? Whatever the government does now, will amount to only damage control.

So, it's all good to blame the system and live in denial, the most important question is - what should be done to resolve the crisis in the PMC Bank? Whatever the government does now, will amount to only damage control. But what should the government do? On the WION edit, we will explore this question. Bore we discuss the possible solutions, it should be underlined that blaming the previous government is not a solution. For 11 years, the fraud has gone unnoticed by the regulator - RBI and the governments - both UPA and NDA. Trying to score political points out of it will only increase public anger. Because it's not the politicians who have lost their personal savings, it's the people. So blame game is not the way forward. For no fault of their, the depositors of PMC bank are bearing the brunt. First, the central government, the state government and the RBI must ensure that the depositors get their money back at the earliest. This is not public service, all these three parties are involved in this mess. The state regulator of Maharashtra, the central government and the banking regulator. Second, check the other top cooperative banks. If this bank could be held hostage by bad loans to one corporate house, what about the other banks? It's important to know the scale of the problem to address it. The worry is - such bad practices could be the norm in other co-operative banks too. Third, force the Reserve Bank of India to ensure that projects are checked thoroughly before giving out loans. This is a double-edged sword. Already, economic growth has slowed down. Lending is essential to revive the economy. But indiscriminate lending once again will place India's banking sector in deep, deep trouble. The government should chart out ways to solve this dilemma instead of passing the blame on the previous governments. Fourth, punish the bankers of PMC bank and the auditors too. It's inconceivable that this scam continued without the full backing of auditors. Finally, it's time to make the insolvency and bankruptcy proceedings more efficient and faster. That's the only way to get money back from the corporate. Better transparency in the banking sector as a whole is the solution. Swift resolution is the need of the hour. At some stage, the government has to merge or liquidate this bank. (Disclaimer: WION Edit is the channel's take on the big events of the world)

WION Edit: PMC bank scam - transparency in banking sector must be improved

Credit growth at Indian banks has dropped to its lowest level in nearly two years, <a href="https://www.wionews.com/india-news/reserve-bank-of-india-increases-withdrawal-limit-for-punjab-and-maharashtra-cooperative-bank-to-rs-40000-255916">the latest Reserve Bank of India (RBI)</a> data shows, as slowing domestic consumption weighs on demand.

This adds to the challenges facing Narendra Modi as he begins his second term as prime minister with India's economy at its weakest levels in six years.

"The slowdown in credit growth this time is a result of both reduced demand and supply," Madan Sabnavis, chief economist at CARE ratings, said.

Lending growth by banks had nearly halved to 8.8 per cent&nbsp;at the end-September from the start of the year.

The RBI data includes all banks in India, which is dominated by state-run lenders Bank of Baroda, Punjab National Bank&nbsp;and Union Bank of India as well as private ones such as HDFC Bank&nbsp;and ICICI Bank.

While retail lending has driven growth, banks are taking a more cautious approach on some consumer loans.

"In certain retail loans we're seeing customers delaying the payments by a few days over the due date," said the head of consumer banking segment of a private bank, adding that this does not bode well when corporate lending has plunged.

A report last month by India Ratings predicts "further moderation" retail lending in 2020 "given the consumption slowdown across segments including housing and auto".

"Even the unsecured loans, which include credit cards, education loans and other personal loans have seen a moderation in growth," the report said.

India's lending problems have been compounded by a drying up of liquidity in the shadow banking sector last year after the collapse of infrastructure lending group IL&amp;FS.

While some major non-banking financial companies (NBFCs) have been going slow on lending, others stopped completely.

However, banks have not used this opportunity to win market share from NBFCs, which accounted for 30 per cent&nbsp;of auto loans and more than 40 per cent&nbsp;of home loans until the end of last year.

The weak growth in lending comes at a time when banks have been cutting interest rates and making it cheaper to borrow.

So far in 2019, the RBI has reduced the repo rate by 135 basis points. Even though banks have not matched this, the pace of cuts has picked up in the last few months.

A high credit-deposit ratio has been one of the key reasons why banks have struggled to cut interest rates. But with credit growth falling faster than deposit growth, banks may have a bit more room to transmit rate cuts.

A credit-deposit ratio above 75 per cent&nbsp;indicates pressure on banks' resources as they have to set aside funds to maintain a cash reserve ratio of 4% and a statutory liquidity ratio of 18.5 per cent.

In an attempt to push banks to pass rate cuts on to their customers, the RBI has required them to link all loans to an external benchmark such as the repo rate since the start of this month. While this is expected to push rates down, economists are not sure this will help spur credit demand.

"Credit growth is expected to remain sub 10 per cent," Sabnavis said.

Credit growth at Indian banks has dropped to its lowest level in nearly two years, the latest Reserve Bank of India (RBI) data shows, as slowing domestic consumption weighs on demand.

Credit growth at Indian banks has dropped to its lowest level in nearly two years, the latest Reserve Bank of India (RBI) data shows, as slowing domestic consumption weighs on demand. This adds to the challenges facing Narendra Modi as he begins his second term as prime minister with India's economy at its weakest levels in six years. "The slowdown in credit growth this time is a result of both reduced demand and supply," Madan Sabnavis, chief economist at CARE ratings, said. Lending growth by banks had nearly halved to 8.8 per cent at the end-September from the start of the year. The RBI data includes all banks in India, which is dominated by state-run lenders Bank of Baroda, Punjab National Bank and Union Bank of India as well as private ones such as HDFC Bank and ICICI Bank. While retail lending has driven growth, banks are taking a more cautious approach on some consumer loans. "In certain retail loans we're seeing customers delaying the payments by a few days over the due date," said the head of consumer banking segment of a private bank, adding that this does not bode well when corporate lending has plunged. A report last month by India Ratings predicts "further moderation" retail lending in 2020 "given the consumption slowdown across segments including housing and auto". "Even the unsecured loans, which include credit cards, education loans and other personal loans have seen a moderation in growth," the report said. India's lending problems have been compounded by a drying up of liquidity in the shadow banking sector last year after the collapse of infrastructure lending group IL&FS. While some major non-banking financial companies (NBFCs) have been going slow on lending, others stopped completely. However, banks have not used this opportunity to win market share from NBFCs, which accounted for 30 per cent of auto loans and more than 40 per cent of home loans until the end of last year. The weak growth in lending comes at a time when banks have been cutting interest rates and making it cheaper to borrow. So far in 2019, the RBI has reduced the repo rate by 135 basis points. Even though banks have not matched this, the pace of cuts has picked up in the last few months. A high credit-deposit ratio has been one of the key reasons why banks have struggled to cut interest rates. But with credit growth falling faster than deposit growth, banks may have a bit more room to transmit rate cuts. A credit-deposit ratio above 75 per cent indicates pressure on banks' resources as they have to set aside funds to maintain a cash reserve ratio of 4% and a statutory liquidity ratio of 18.5 per cent. In an attempt to push banks to pass rate cuts on to their customers, the RBI has required them to link all loans to an external benchmark such as the repo rate since the start of this month. While this is expected to push rates down, economists are not sure this will help spur credit demand. "Credit growth is expected to remain sub 10 per cent," Sabnavis said.

Slowing Indian bank lending overshadows economic rebound hopes

Indian shares edged higher on Monday ahead of the release of key inflation data, while broader Asian peers rose on optimism from the positive tone of the Sino-US trade talks.

The broader NSE Nifty rose 0.27% at 11,336.70 as of 0415 GMT, while the benchmark BSE Sensex was up 0.24% at 38,211.46.

Indian retail inflation probably reached a 12-month high in September, but still leaving room for further interest rate cuts because it's expected to remain below the Reserve Bank of India's target, according to a Reuters poll.

However, India's industrial output shrank at its fastest rate in more than six years in August, reflecting the impact of an economic slowdown.

India's growth has been plagued by a drop in demand and flooding due to above-normal monsoon, Barclays analyst Rahul Bajoria said, but indicated that there could be a bounce-back in the second half of the year.

"The case remains strong for further support to aggregate demand, and the household sector in particular," Bajoria wrote in a note.

Metal stocks led gains as the Nifty metals rose about 1.1% as commodity prices rose due to the progress in the Sino-US trade talks.

Meanwhile, IT shares fell as India's No. 2 software exporter Infosys Ltd reported a September-quarter profit that could only meet expectations on Friday, signalling a tricky macroeconomic environment for the sector

Infosys results came after a below-par showing from larger rival Tata Consultancy Services a day earlier.

Infosys shares fell 3.44%, dragging the Nifty IT index 1%.

Meanwhile, broader Asian peers rose as US President Donald Trump outlined the first phase of a deal to end a trade war with China and suspended a threatened tariff hike, though officials on both sides said much more work needed to be done.

MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.5%.

Indian shares edged higher on Monday ahead of the release of key inflation data, while broader Asian peers rose on optimism from the positive tone of the Sino-US trade talks.

Indian shares edged higher on Monday ahead of the release of key inflation data, while broader Asian peers rose on optimism from the positive tone of the Sino-US trade talks. The broader NSE Nifty rose 0.27% at 11,336.70 as of 0415 GMT, while the benchmark BSE Sensex was up 0.24% at 38,211.46. Indian retail inflation probably reached a 12-month high in September, but still leaving room for further interest rate cuts because it's expected to remain below the Reserve Bank of India's target, according to a Reuters poll. However, India's industrial output shrank at its fastest rate in more than six years in August, reflecting the impact of an economic slowdown. India's growth has been plagued by a drop in demand and flooding due to above-normal monsoon, Barclays analyst Rahul Bajoria said, but indicated that there could be a bounce-back in the second half of the year. "The case remains strong for further support to aggregate demand, and the household sector in particular," Bajoria wrote in a note. Metal stocks led gains as the Nifty metals rose about 1.1% as commodity prices rose due to the progress in the Sino-US trade talks. Meanwhile, IT shares fell as India's No. 2 software exporter Infosys Ltd reported a September-quarter profit that could only meet expectations on Friday, signalling a tricky macroeconomic environment for the sector Infosys results came after a below-par showing from larger rival Tata Consultancy Services a day earlier. Infosys shares fell 3.44%, dragging the Nifty IT index 1%. Meanwhile, broader Asian peers rose as US President Donald Trump outlined the first phase of a deal to end a trade war with China and suspended a threatened tariff hike, though officials on both sides said much more work needed to be done. MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.5%.

Sensex, Nifty rise ahead of inflation data; Infosys drops

The Reserve Bank of India (RBI) has enhanced the withdrawal limit for depositors of <a href="https://www.wionews.com/india-news/finance-minister-nirmala-sitharaman-meets-pmc-customers-takes-cognizance-of-concerns-254962">Punjab and Maharashtra Cooperative (PMC) Bank</a> Ltd to Rs 40,000.

On October 3, the RBI had permitted the depositors of the bank to withdraw up to Rs 25,000 of the total balance in their accounts.

"The RBI, after reviewing the bank's liquidity position and its ability to pay its depositors, has decided to further enhance the limit for withdrawal to Rs 40,000, inclusive of Rs 25,000 allowed earlier," read a statement from the RBI.

With the relaxation, about <a href="https://www.wionews.com/india-news/affected-by-pmc-bank-restrictions-many-threaten-to-boycott-upcoming-assembly-polls-252399">77 per cent of the depositors of the bank will be able to withdraw their entire account balance</a>, the statement said.

"The financial position of the bank has been substantially impaired due to fraud perpetrated on it by certain persons. As soon as the matter came to the notice of the Reserve Bank of India, the action was taken in appointing an Administrator and ensuring that the bank's available resources are protected and not misused or diverted," the statement added.

Based on a complaint filed by the bank against its officials and borrowers associated with the fraud/financial <a href="https://www.wionews.com/india-news/pmc-bank-case-eow-freezes-bank-accounts-of-former-md-253981">irregularities in the bank and manipulation of its books</a> of accounts, the Economic Offences Wing, Maharashtra Police, has started its investigations into the matter.

Forensic auditors have been appointed by the Administrator of the bank to look into the related transactions. The Administrator and the three-member Advisory Committee appointed by the RBI in terms of Section 36AAA(5)(a) read with Section 56 of the Banking Regulation Act 1949 are working for speedier resolution of the various issues being faced by the bank in conducting its operations, stated the RBI.

The central bank is closely monitoring the developments and shall continue to take necessary steps in the interest of the depositors of the bank.

The Reserve Bank of India (RBI) has enhanced the withdrawal limit for depositors of Punjab and Maharashtra Cooperative (PMC) Bank Ltd to Rs 40,000. On October 3, the RBI had permitted the depositors of the bank to withdraw up to Rs 25,000 of the total balance in their accounts.

The Reserve Bank of India (RBI) has enhanced the withdrawal limit for depositors of Punjab and Maharashtra Cooperative (PMC) Bank Ltd to Rs 40,000. On October 3, the RBI had permitted the depositors of the bank to withdraw up to Rs 25,000 of the total balance in their accounts. "The RBI, after reviewing the bank's liquidity position and its ability to pay its depositors, has decided to further enhance the limit for withdrawal to Rs 40,000, inclusive of Rs 25,000 allowed earlier," read a statement from the RBI. With the relaxation, about 77 per cent of the depositors of the bank will be able to withdraw their entire account balance, the statement said. "The financial position of the bank has been substantially impaired due to fraud perpetrated on it by certain persons. As soon as the matter came to the notice of the Reserve Bank of India, the action was taken in appointing an Administrator and ensuring that the bank's available resources are protected and not misused or diverted," the statement added. Based on a complaint filed by the bank against its officials and borrowers associated with the fraud/financial irregularities in the bank and manipulation of its books of accounts, the Economic Offences Wing, Maharashtra Police, has started its investigations into the matter. Forensic auditors have been appointed by the Administrator of the bank to look into the related transactions. The Administrator and the three-member Advisory Committee appointed by the RBI in terms of Section 36AAA(5)(a) read with Section 56 of the Banking Regulation Act 1949 are working for speedier resolution of the various issues being faced by the bank in conducting its operations, stated the RBI. The central bank is closely monitoring the developments and shall continue to take necessary steps in the interest of the depositors of the bank.

Reserve Bank of India increases withdrawal limit for Punjab and Maharashtra Cooperative Bank to Rs 40,000

India's industrial output shrank at its fastest rate in more than six years in August, reflecting the impact of an economic slowdown that could prompt the central bank to cut its key policy rate for the sixth time in December.

Annual industrial output contracted 1.1% in August compared with 4.6% growth in the previous month, government data showed on Friday. It was the worst performance since a 1.7% contraction in November 2012, data compiled by the Statistics ministry showed.

Analysts polled by Reuters had forecast industrial output for the month to have grown at 1.8%.

Subdued inflation and an economic slowdown have prompted the Reserve Bank of India (RBI) to cut interest rates by a total of 135 basis points this year, including a 25-basis-point cut last week, making it the most aggressive central bank in Asia.

"Another rate cut in December seems likely," Shilan Shah, of Capital Economics, said before the release of the data.

The country's infrastructure output fell in August from a year earlier, the first contraction since April 2015, signalling the recovery in Asia's third-largest economy may be slow despite a cut in the corporate tax rate and other policy measures designed to spur investment.

Passenger vehicle sales slumped 23.7% in September, the 11th straight month of declines, prompting an industry body to flag more job cuts if sales failed to pick up soon.

Car and auto component makers have cut thousands of jobs and halted some production as the industry grapples with various challenges amid a broader economic slowdown. The government stepped in last month, announcing a corporate tax rate cut to boost manufacturing and lift growth.

The government has also seen tax collections falling due to weakness in the economy. Collections from India's nationwide goods and services tax (GST) fell to a 19-month low in September, while direct tax collection growth since the beginning of the current fiscal stands at 6% so far, below the required growth rate of 17%.

India's industrial output shrank at its fastest rate in more than six years in August, reflecting the impact of an economic slowdown that could prompt the central bank to cut its key policy rate for the sixth time in December.

India's industrial output shrank at its fastest rate in more than six years in August, reflecting the impact of an economic slowdown that could prompt the central bank to cut its key policy rate for the sixth time in December. Annual industrial output contracted 1.1% in August compared with 4.6% growth in the previous month, government data showed on Friday. It was the worst performance since a 1.7% contraction in November 2012, data compiled by the Statistics ministry showed. Analysts polled by Reuters had forecast industrial output for the month to have grown at 1.8%. Subdued inflation and an economic slowdown have prompted the Reserve Bank of India (RBI) to cut interest rates by a total of 135 basis points this year, including a 25-basis-point cut last week, making it the most aggressive central bank in Asia. "Another rate cut in December seems likely," Shilan Shah, of Capital Economics, said before the release of the data. The country's infrastructure output fell in August from a year earlier, the first contraction since April 2015, signalling the recovery in Asia's third-largest economy may be slow despite a cut in the corporate tax rate and other policy measures designed to spur investment. Passenger vehicle sales slumped 23.7% in September, the 11th straight month of declines, prompting an industry body to flag more job cuts if sales failed to pick up soon. Car and auto component makers have cut thousands of jobs and halted some production as the industry grapples with various challenges amid a broader economic slowdown. The government stepped in last month, announcing a corporate tax rate cut to boost manufacturing and lift growth. The government has also seen tax collections falling due to weakness in the economy. Collections from India's nationwide goods and services tax (GST) fell to a 19-month low in September, while direct tax collection growth since the beginning of the current fiscal stands at 6% so far, below the required growth rate of 17%.

Industrial output shrinks at fastest rate in more than six years

Indian retail inflation probably reached a 12-month high in September, still leaving room for further interest rate cuts because it's expected to remain below the Reserve Bank of India's target, according to a Reuters poll.

An extended monsoon has delayed harvests and interrupted the supplies of vegetables like onions, a key ingredient in Indian kitchens. That probably pushed retail inflation higher last month; food prices account for over half the inflation basket.

Any previous sharp rise in onion prices has been painful for Indian policymakers. To keep that price surge from spiralling out of control, as it did a few years ago, the government has banned onion exports.

The October&nbsp;4-9 poll of over 40 economists predicted India's annual consumer inflation rose to 3.7 per cent&nbsp;in September, its highest in a year. Forecasts ranged from 3.10&nbsp;per cent&nbsp;to 3.92 per cent. Only two economists expected inflation to be lower than August's 3.21 per cent.

If the consensus is right, inflation will come in below the RBI's medium-term target for 14 months in a row. The inflation data are due on October&nbsp;14.

"Headline consumer price inflation likely jumped in September on the back of a surge in onion prices. But that will hardly bring tears to the eyes of the RBI, as it is likely to have stayed below the 4.0&nbsp;per cent&nbsp;target," said Shilan Shah, senior India economist at Capital Economics.

"Another rate cut in December seems likely."

Subdued inflation and an economic slowdown have allowed the RBI to cut interest rates by a total of 135 basis points this year, including a 25-basis-point cut last week, making it the most aggressive central bank in Asia.

Economists in a separate Reuters poll said the central bank was not yet done with rate cuts.

"The RBI has been quite vocal about the fact that they would continue to support growth and they have left the door open for more policy cuts," Sakshi Gupta, senior India economist at HDFC Bank.

Indian retail inflation probably reached a 12-month high in September, still leaving room for further interest rate cuts because it's expected to remain below the Reserve Bank of India's target, according to a Reuters poll.

Indian retail inflation probably reached a 12-month high in September, still leaving room for further interest rate cuts because it's expected to remain below the Reserve Bank of India's target, according to a Reuters poll. An extended monsoon has delayed harvests and interrupted the supplies of vegetables like onions, a key ingredient in Indian kitchens. That probably pushed retail inflation higher last month; food prices account for over half the inflation basket. Any previous sharp rise in onion prices has been painful for Indian policymakers. To keep that price surge from spiralling out of control, as it did a few years ago, the government has banned onion exports. The October 4-9 poll of over 40 economists predicted India's annual consumer inflation rose to 3.7 per cent in September, its highest in a year. Forecasts ranged from 3.10 per cent to 3.92 per cent. Only two economists expected inflation to be lower than August's 3.21 per cent. If the consensus is right, inflation will come in below the RBI's medium-term target for 14 months in a row. The inflation data are due on October 14. "Headline consumer price inflation likely jumped in September on the back of a surge in onion prices. But that will hardly bring tears to the eyes of the RBI, as it is likely to have stayed below the 4.0 per cent target," said Shilan Shah, senior India economist at Capital Economics. "Another rate cut in December seems likely." Subdued inflation and an economic slowdown have allowed the RBI to cut interest rates by a total of 135 basis points this year, including a 25-basis-point cut last week, making it the most aggressive central bank in Asia. Economists in a separate Reuters poll said the central bank was not yet done with rate cuts. "The RBI has been quite vocal about the fact that they would continue to support growth and they have left the door open for more policy cuts," Sakshi Gupta, senior India economist at HDFC Bank.

India's inflation surged in September but won't 'bring tears' to RBI: Report

Indian shares wobbled on Monday as prospects of slower domestic economic growth offset optimism stemming from strong US unemployment data that sent Asian peers higher.

The broader NSE Nifty was up 0.24% at 11,201.70, as of 0429 GMT, while the benchmark BSE Sensex rose 0.36% at 38,804.17.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.18% after data showed the US unemployment rate dropped to the lowest in almost 50 years, easing concerns of a slowdown in the world's largest economy.

Back home, the Reserve Bank of India (RBI) on Friday cut its real GDP growth forecast for 2019-20 to 6.1% from a prior projection of 6.9% as it reduced the policy interest rates by 25 basis points.

"The RBI's cutting down of growth forecast meant that even the (central) bank is not very hopeful of a big turnaround in growth," said Deepak Jasani, head of Retail Research at HDFC Securities.

Yes Bank shares gained as much as 9% after Mint reported the bank was wooing tech giant Microsoft Corp as a strategic investor, while another daily Business Standard said the lender was planning a $1 billion rights issue by December.

Oil marketing companies Bharat Petroleum Corp fell 2.6%, while Indian Oil Corp was down as much as 2.81%.

Among sectors, the NSE media index was the top drag, shedding 2.63%, as heavyweight Zee Entertainment Enterprises fell as much as 14.17%.

Indian shares wobbled on Monday as prospects of slower domestic economic growth offset optimism stemming from strong US unemployment data that sent Asian peers higher.

Indian shares wobbled on Monday as prospects of slower domestic economic growth offset optimism stemming from strong US unemployment data that sent Asian peers higher. The broader NSE Nifty was up 0.24% at 11,201.70, as of 0429 GMT, while the benchmark BSE Sensex rose 0.36% at 38,804.17. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.18% after data showed the US unemployment rate dropped to the lowest in almost 50 years, easing concerns of a slowdown in the world's largest economy. Back home, the Reserve Bank of India (RBI) on Friday cut its real GDP growth forecast for 2019-20 to 6.1% from a prior projection of 6.9% as it reduced the policy interest rates by 25 basis points. "The RBI's cutting down of growth forecast meant that even the (central) bank is not very hopeful of a big turnaround in growth," said Deepak Jasani, head of Retail Research at HDFC Securities. Yes Bank shares gained as much as 9% after Mint reported the bank was wooing tech giant Microsoft Corp as a strategic investor, while another daily Business Standard said the lender was planning a $1 billion rights issue by December. Oil marketing companies Bharat Petroleum Corp fell 2.6%, while Indian Oil Corp was down as much as 2.81%. Among sectors, the NSE media index was the top drag, shedding 2.63%, as heavyweight Zee Entertainment Enterprises fell as much as 14.17%.

Sensex up by 200 points, Nifty over 11,000

The RBI's monetary policy committee on October 4, 2019, i.e. Friday announced the fifth consecutive rate cut this year to support government measures for boosting economic activity amid benign inflation. Watch this video to know more.

RBI Credit Policy: Central bank cuts rate by 25 bps to 5.15%

The interest rate cut by Reserve Bank of India (RBI) failed to boost market sentiment on Friday as equity benchmarks fell after the central bank also lowered its forecast of GDP growth rate to 6.1 per cent for the current financial year.

The BSE S&amp;P Sensex closed 434 points or 1.14 per cent lower at 37,673, while the Nifty 50 was down by 139 points or 1.23 per cent to 11,175.

The RBI cut repo rate by 25 basis points to 5.15 per cent, bringing the cumulative reduction in interest rate of 135 basis points for this calendar year.

However, it also lowered the GDP growth forecast to 6.1 per cent for FY20 from 6.9 per cent earlier.

With the latest central bank move, investors appeared unsure if it is sufficient to support the flagging consumer demand amid slowing economic output, rising unemployment rate and low business confidence.

Except for IT, all sectoral indices at the National Stock Exchange were in the red. Nifty Bank fell by 2.4 per cent, financial service by 1.9 per cent, FMCG by 1.5 per cent and metal by 1.2 per cent.

Among stocks, Grasim tumbled by 4.2 per cent, UltraTech Cements by 4 per cent, JSW Steel by 3.8 per cent and Titan by 3.4 per cent. The other prominent losers included private lenders like Kotak Mahindra Bank, ICICI Bank and HDFC Bank besides Bharat Petroleum Corporation and Tata Motors.

But IT majors like Wipro, Tata Consultancy Services, Infosys, Tech Mahindra and HCL Technologies showed marginal gains. The other gainers were ONGC, GAIL, NTPC, IndusInd Bank and Hero MotoCorp.

Meanwhile, Asian stocks were mixed before a key US job report. MSCI's broadest index of Asia Pacific shares outside Japan rose marginally while Japan's Nikkei stock index was up by 0.32 per cent.

Hong Kong shares were down by 1.11 per cent with fragile sentiment as the territory's government mulls emergency laws to contain months of often violent protest against China's rule of the former British colony.

South Korean Kospi and Shanghai composite too were in the red.

The interest rate cut by Reserve Bank of India (RBI) failed to boost market sentiment on Friday as equity benchmarks fell after the central bank also lowered its forecast of GDP growth rate to 6.

The interest rate cut by Reserve Bank of India (RBI) failed to boost market sentiment on Friday as equity benchmarks fell after the central bank also lowered its forecast of GDP growth rate to 6.1 per cent for the current financial year. The BSE S&P Sensex closed 434 points or 1.14 per cent lower at 37,673, while the Nifty 50 was down by 139 points or 1.23 per cent to 11,175. The RBI cut repo rate by 25 basis points to 5.15 per cent, bringing the cumulative reduction in interest rate of 135 basis points for this calendar year. However, it also lowered the GDP growth forecast to 6.1 per cent for FY20 from 6.9 per cent earlier. With the latest central bank move, investors appeared unsure if it is sufficient to support the flagging consumer demand amid slowing economic output, rising unemployment rate and low business confidence. Except for IT, all sectoral indices at the National Stock Exchange were in the red. Nifty Bank fell by 2.4 per cent, financial service by 1.9 per cent, FMCG by 1.5 per cent and metal by 1.2 per cent. Among stocks, Grasim tumbled by 4.2 per cent, UltraTech Cements by 4 per cent, JSW Steel by 3.8 per cent and Titan by 3.4 per cent. The other prominent losers included private lenders like Kotak Mahindra Bank, ICICI Bank and HDFC Bank besides Bharat Petroleum Corporation and Tata Motors. But IT majors like Wipro, Tata Consultancy Services, Infosys, Tech Mahindra and HCL Technologies showed marginal gains. The other gainers were ONGC, GAIL, NTPC, IndusInd Bank and Hero MotoCorp. Meanwhile, Asian stocks were mixed before a key US job report. MSCI's broadest index of Asia Pacific shares outside Japan rose marginally while Japan's Nikkei stock index was up by 0.32 per cent. Hong Kong shares were down by 1.11 per cent with fragile sentiment as the territory's government mulls emergency laws to contain months of often violent protest against China's rule of the former British colony. South Korean Kospi and Shanghai composite too were in the red.

Sensex drops 434 points after RBI cuts repo rate and GDP forecast

The monetary policy committee (MPC) of the <a href="https://www.wionews.com/india-news/reserve-bank-of-india-to-transfer-surplus-of-rs-176-lakh-crore-to-government-key-points-246060">Reserve Bank of India</a> (RBI) on Friday has cut its benchmark repo rate by 25 basis points to 5.15 per cent, in the fifth straight interest rate cut.

The central bank maintained its accommodative policy stance.&nbsp;The&nbsp;GDP growth for 2019-20 has been revised downwards from 6.9 per cent in the August policy to 6.1 per cent.

RBI has said that there is space to cut repo rates further.

Watch: RBI credit policy - central bank cuts rate by 25 bps to 5.15%

<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/rbi-credit-policy-central-bank-cuts-rate-by-25-bps-to-515-253663/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>
</div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

The reverse repo rate has been reduced to 4.9 per cent, and the bank rate stands at 5.40 per cent.&nbsp;

The six-member <a href="https://www.wionews.com/india-news/social-media-rumours-of-banks-shutting-down-false-reserve-bank-of-india-252026">monetary policy committee</a> (MPC) headed by Governor Shaktikanta Das announced the decision after a three-day meeting.&nbsp;

Earlier on February 7, April 4, June 6 and Aug 7, the central bank had reduced the key lending rate to infuse liquidity and push economic growth.

Repo rate is the rate at which the RBI lends money to commercial banks. A repo rate cut allows banks to reduce interest rates for consumers and lowers equal monthly instalments on home loans, car loans and personal loans.

India's economy grew by only 6.8 per cent in 2018-19, according to government data. GDP growth slumped lower to 5 per cent in the April to June quarter as against an 8 per cent in the year-ago period due to weak household spending, muted corporate investments, and a crippling slowdown in manufacturing and construction activity. Industry leaders say a substantial cut in the repo rate and bank lending rates are needed to boost manufacturing and domestic demand for economic growth.

(With inputs from ANI)

The monetary policy committee (MPC) of the Reserve Bank of India (RBI) on Friday has cut its benchmark repo rate by 25 basis points to 5.15 per cent, in the fifth straight interest rate cut.

The monetary policy committee (MPC) of the Reserve Bank of India (RBI) on Friday has cut its benchmark repo rate by 25 basis points to 5.15 per cent, in the fifth straight interest rate cut. The central bank maintained its accommodative policy stance. The GDP growth for 2019-20 has been revised downwards from 6.9 per cent in the August policy to 6.1 per cent. RBI has said that there is space to cut repo rates further. Watch: RBI credit policy - central bank cuts rate by 25 bps to 5.15% × The reverse repo rate has been reduced to 4.9 per cent, and the bank rate stands at 5.40 per cent. The six-member monetary policy committee (MPC) headed by Governor Shaktikanta Das announced the decision after a three-day meeting. Earlier on February 7, April 4, June 6 and Aug 7, the central bank had reduced the key lending rate to infuse liquidity and push economic growth. Repo rate is the rate at which the RBI lends money to commercial banks. A repo rate cut allows banks to reduce interest rates for consumers and lowers equal monthly instalments on home loans, car loans and personal loans. India's economy grew by only 6.8 per cent in 2018-19, according to government data. GDP growth slumped lower to 5 per cent in the April to June quarter as against an 8 per cent in the year-ago period due to weak household spending, muted corporate investments, and a crippling slowdown in manufacturing and construction activity. Industry leaders say a substantial cut in the repo rate and bank lending rates are needed to boost manufacturing and domestic demand for economic growth. (With inputs from ANI)

Reserve Bank of India cuts repo rate by 25 bps,  from 5.40 per cent to 5.15 per cent

The Reserve Bank of India is expected to cut benchmark interest rates for the fifth time this year on Friday as recent fiscal measures to boost ailing growth seem largely inadequate and benign inflation offers room for more easing.

The RBI is predicted to lower its key lending rate or the repo rate&nbsp;by 25 basis points (bps) to 5.15%, which would take cumulative cuts so far this year to 135 bps.

Most analysts forecast one more cut of 15 bps in December.

Some RBI watchers expect a larger cut this week, after it cut the repo rate but an unconventional 35 bps in August.

"With current inflation remaining benign, we expect RBI to opt for a 40 bps rate cut at its policy review later this week in a bid to continue its support towards growth revival," said Yuvika Oberoi, an economist with Yes Bank in Mumbai.

Asia's third-largest economy expanded by just 5% in the June quarter, its slowest pace since 2013. That has raised expectations the RBI will be forced to further downgrade its growth projection of 6.9% for the current fiscal year.

However, not all economists were as aggressive with their rate cut bets, saying the central bank will likely reserve some firepower and wait to see how inflation pans out.

In a bid to revive business activity, the government in September announced a sharp cut in the corporate tax rate - to 22% from 30%.

But while the tax cut brings the cost of doing business in India into line with its main Asian rivals, the government's move will do little to fix a lack of spending power, economists say.

"The recent volatility in crude oil prices and the fiscal measures announced by the government will have an impact on inflation in the medium-term and the fiscal deficit," said Shanti Ekambaram, president of consumer banking at Kotak Mahindra Bank.

"Hence, expect the MPC to be more measured in its response with a rate cut of 20-25 bps," she added.

Inflation in August accelerated to a 10-month high but remained well below the central bank's medium-term target of 4% for a 13th straight month.

If the RBI delivers a 25 bps cut as expected, traders will focus on the wording and tone of the monetary policy statement for clues on further easing.

Economists also said the policy transmission process could improve after the RBI mandated banks to link all fresh loans to an external benchmark like the repo rate or the rate on short-term treasury bills since the start of this month.

India's banks have passed only a small portion of the RBI's cuts this year to their customers.

The Reserve Bank of India is expected to cut benchmark interest rates for the fifth time this year on Friday as recent fiscal measures to boost ailing growth seem largely inadequate and benign inflation offers room for more easing.

The Reserve Bank of India is expected to cut benchmark interest rates for the fifth time this year on Friday as recent fiscal measures to boost ailing growth seem largely inadequate and benign inflation offers room for more easing. The RBI is predicted to lower its key lending rate or the repo rate by 25 basis points (bps) to 5.15%, which would take cumulative cuts so far this year to 135 bps. Most analysts forecast one more cut of 15 bps in December. Some RBI watchers expect a larger cut this week, after it cut the repo rate but an unconventional 35 bps in August. "With current inflation remaining benign, we expect RBI to opt for a 40 bps rate cut at its policy review later this week in a bid to continue its support towards growth revival," said Yuvika Oberoi, an economist with Yes Bank in Mumbai. Asia's third-largest economy expanded by just 5% in the June quarter, its slowest pace since 2013. That has raised expectations the RBI will be forced to further downgrade its growth projection of 6.9% for the current fiscal year. However, not all economists were as aggressive with their rate cut bets, saying the central bank will likely reserve some firepower and wait to see how inflation pans out. In a bid to revive business activity, the government in September announced a sharp cut in the corporate tax rate - to 22% from 30%. But while the tax cut brings the cost of doing business in India into line with its main Asian rivals, the government's move will do little to fix a lack of spending power, economists say. "The recent volatility in crude oil prices and the fiscal measures announced by the government will have an impact on inflation in the medium-term and the fiscal deficit," said Shanti Ekambaram, president of consumer banking at Kotak Mahindra Bank. "Hence, expect the MPC to be more measured in its response with a rate cut of 20-25 bps," she added. Inflation in August accelerated to a 10-month high but remained well below the central bank's medium-term target of 4% for a 13th straight month. If the RBI delivers a 25 bps cut as expected, traders will focus on the wording and tone of the monetary policy statement for clues on further easing. Economists also said the policy transmission process could improve after the RBI mandated banks to link all fresh loans to an external benchmark like the repo rate or the rate on short-term treasury bills since the start of this month. India's banks have passed only a small portion of the RBI's cuts this year to their customers.

RBI set to cut rates again as fiscal measures fail to cheer

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