The Reserve Bank of India (RBI) held interest rates unchanged at a policy meeting on Friday, sending the rupee tumbling to a record low and stunning analysts who had expected a rate increase to combat inflationary pressures arising from high oil prices.

The RBI's monetary policy committee (MPC) left the repo rate at 6.50 per cent, though 35 out of 64 analysts surveyed by Reuters last week had forecast a rate hike.

The panel however, shifted its policy stance to 'calibrated tightening" from 'neutral'. Five of the six panel members voted to leave the rate unchanged.

"Global headwinds in the form of escalating trade tensions, volatile and rising oil prices, and tightening of global financial conditions pose substantial risks to the growth and inflation outlook," the RBI said in its policy statement, adding that it was vital "to further strengthen domestic macroeconomic fundamentals."

The MPC also held the reverse repo rate at 6.25 percent.

While the RBI kept its rates unchanged, analysts expect the central bank to raise rates by at least 50 basis points more going ahead, as inflationary pressures become more pronounced.

The Indian rupee weakened from 73.65 to hit an all-time low of 74.15 post the RBI policy, before stabilising around the 74 level.

The rupee has slumped in recent months amid a global rise in oil prices and a sell-off in emerging markets. It has fallen more than 13 percent since January, making it the worst performing major Asian emerging market currency.

The 10-year benchmark bond yield fell to 8.03 per cent from 8.13 per cent before the policy was announced, as traders expecting a rate hike were wrongfooted.

The Reserve Bank of India (RBI) held interest rates unchanged at a policy meeting on Friday, sending the rupee tumbling to a record low and stunning analysts who had expected a rate increase to combat inflationary pressures arising from high oil prices.

The Reserve Bank of India (RBI) held interest rates unchanged at a policy meeting on Friday, sending the rupee tumbling to a record low and stunning analysts who had expected a rate increase to combat inflationary pressures arising from high oil prices. The RBI's monetary policy committee (MPC) left the repo rate at 6.50 per cent, though 35 out of 64 analysts surveyed by Reuters last week had forecast a rate hike. The panel however, shifted its policy stance to 'calibrated tightening" from 'neutral'. Five of the six panel members voted to leave the rate unchanged. "Global headwinds in the form of escalating trade tensions, volatile and rising oil prices, and tightening of global financial conditions pose substantial risks to the growth and inflation outlook," the RBI said in its policy statement, adding that it was vital "to further strengthen domestic macroeconomic fundamentals." The MPC also held the reverse repo rate at 6.25 percent. While the RBI kept its rates unchanged, analysts expect the central bank to raise rates by at least 50 basis points more going ahead, as inflationary pressures become more pronounced. The Indian rupee weakened from 73.65 to hit an all-time low of 74.15 post the RBI policy, before stabilising around the 74 level. The rupee has slumped in recent months amid a global rise in oil prices and a sell-off in emerging markets. It has fallen more than 13 percent since January, making it the worst performing major Asian emerging market currency. The 10-year benchmark bond yield fell to 8.03 per cent from 8.13 per cent before the policy was announced, as traders expecting a rate hike were wrongfooted.

RBI keeps policy rate unchanged in surprise move

The Reserve Bank of India on Wednesday said it will relax external commercial borrowings (ECB) policy to allow state-run oil marketing companies to raise external debt for working capital purposes.

The RBI will permit oil marketing firms to raise overseas funds with minimum average maturity period of 3 or 5 years under the automatic route, it said in a statement. It lifted the individual borrowing limit set at $750 million under the ECB framework.

The move comes in light of the rupee's drop to a record low on Wednesday triggered by a sharp rise in global crude oil prices, prompting the central bank to quickly intervene to slow its fall.

The Reserve Bank of India on Wednesday said it will relax external commercial borrowings (ECB) policy to allow state-run oil marketing companies to raise external debt for working capital purposes.

The Reserve Bank of India on Wednesday said it will relax external commercial borrowings (ECB) policy to allow state-run oil marketing companies to raise external debt for working capital purposes. The RBI will permit oil marketing firms to raise overseas funds with minimum average maturity period of 3 or 5 years under the automatic route, it said in a statement. It lifted the individual borrowing limit set at $750 million under the ECB framework. The move comes in light of the rupee's drop to a record low on Wednesday triggered by a sharp rise in global crude oil prices, prompting the central bank to quickly intervene to slow its fall.

RBI eases overseas borrowing norms for state-run oil companies

The six-member Monetary Policy Committee (MPC), headed by RBI governor Urjit Patel, began three-day deliberations Wednesday to decide on the key policy rates amid expectations that it would go for a 25 basis points hike to counter the impact of rising oil prices on inflation.

If the RBI raises the interest rate on Friday, it would be third in a row. It hiked key policy rate in this fiscal's second bi-monthly policy in June after a hiatus of four-and-a-half years. Subsequently, the RBI raised the repo rate or short-term lending rate by another 25 basis points in August policy meeting.

After two successive hikes, the repo rate currently stands at 6.50 per cent.

According to experts, rising crude oil prices, depreciating rupee and widening current account deficit are some of the factors the policy-making body would keep in mind while deciding on interest rates.

The rupee Wednesday weakened further to 73.25 against the US dollar while brent crude was trading near USD 85 per barrel.

"With petrol and diesel prices moving up, there is a strong expectation that inflation will also move up. So, they (RBI) may take a pre-emptive action. I feel there will be an increase of 25 basis points in the repo rate," Union Bank of India managing director and chief executive Rajkiran Rai G said.

Despite the rise in oil prices, the headline inflation number came down to 3.69 per cent for August as against 4.17 per cent for July.

The government has mandated the Reserve Bank to keep inflation within a band of 2-6 per cent.

Given the macroeconomic situation, the RBI is expected to raise the rate by 25 basis points in its upcoming policy review, another public sector bank head said.

Experts say the weaker trend in the rupee may also prompt the central bank to raise repo rate.

"Given where currency level is at this point of time, I think they will increase the interest rate by a quarter basis points," HDFC vice chairman and chief executive Keki Mistry said.

Tracking global developments, the rupee has become weak and is hovering around 73 against the dollar.

The SBI, in its research report Ecowrap, said the RBI should raise the policy repo rate by at least 25 basis points to arrest the rupee's fall.

"We rule out a hike of 50 basis points, as it may spook the market. However, there is a probability of change in neutral stance too, as three successive rate hikes with a neutral stance could contradict RBI message," the research report said.

The six-member Monetary Policy Committee (MPC), headed by RBI governor Urjit Patel, began three-day deliberations Wednesday to decide on the key policy rates amid expectations that it would go for a 25 basis points hike to counter the impact of rising oil prices on inflation.

The six-member Monetary Policy Committee (MPC), headed by RBI governor Urjit Patel, began three-day deliberations Wednesday to decide on the key policy rates amid expectations that it would go for a 25 basis points hike to counter the impact of rising oil prices on inflation. If the RBI raises the interest rate on Friday, it would be third in a row. It hiked key policy rate in this fiscal's second bi-monthly policy in June after a hiatus of four-and-a-half years. Subsequently, the RBI raised the repo rate or short-term lending rate by another 25 basis points in August policy meeting. After two successive hikes, the repo rate currently stands at 6.50 per cent. According to experts, rising crude oil prices, depreciating rupee and widening current account deficit are some of the factors the policy-making body would keep in mind while deciding on interest rates. The rupee Wednesday weakened further to 73.25 against the US dollar while brent crude was trading near USD 85 per barrel. "With petrol and diesel prices moving up, there is a strong expectation that inflation will also move up. So, they (RBI) may take a pre-emptive action. I feel there will be an increase of 25 basis points in the repo rate," Union Bank of India managing director and chief executive Rajkiran Rai G said. Despite the rise in oil prices, the headline inflation number came down to 3.69 per cent for August as against 4.17 per cent for July. The government has mandated the Reserve Bank to keep inflation within a band of 2-6 per cent. Given the macroeconomic situation, the RBI is expected to raise the rate by 25 basis points in its upcoming policy review, another public sector bank head said. Experts say the weaker trend in the rupee may also prompt the central bank to raise repo rate. "Given where currency level is at this point of time, I think they will increase the interest rate by a quarter basis points," HDFC vice chairman and chief executive Keki Mistry said. Tracking global developments, the rupee has become weak and is hovering around 73 against the dollar. The SBI, in its research report Ecowrap, said the RBI should raise the policy repo rate by at least 25 basis points to arrest the rupee's fall. "We rule out a hike of 50 basis points, as it may spook the market. However, there is a probability of change in neutral stance too, as three successive rate hikes with a neutral stance could contradict RBI message," the research report said.

RBI rate-setting panel begins three-day meet, may hike repo rate on Friday

The Reserve Bank of India (RBI) eased a mandatory liquidity rule on Thursday, by tweaking its liquidity coverage ratio requirements for banks.

In a circular the RBI said it would allow banks to account for up to two percentage points more of government securities, held in their statutory liquidity ratio reserves, to help them meet liquidity coverage ratio norms.

The move will ease tight cash conditions to some extent as it will reduce pressure on banks to buy more government securities to maintain high-quality liquid assets, as mandated under global Basel III norms.

The Reserve Bank of India (RBI) eased a mandatory liquidity rule on Thursday, by tweaking its liquidity coverage ratio requirements for banks. In a circular the RBI said it would allow banks to account for up to two percentage points more of government securities, held in their statutory liquidity ratio reserves, to help them meet liquidity coverage ratio norms.

The Reserve Bank of India (RBI) eased a mandatory liquidity rule on Thursday, by tweaking its liquidity coverage ratio requirements for banks. In a circular the RBI said it would allow banks to account for up to two percentage points more of government securities, held in their statutory liquidity ratio reserves, to help them meet liquidity coverage ratio norms. The move will ease tight cash conditions to some extent as it will reduce pressure on banks to buy more government securities to maintain high-quality liquid assets, as mandated under global Basel III norms.

RBI eases some cash requirement rules for banks

In a rare move, the RBI and Sebi Sunday said they are "closely monitoring" activities in the financial markets and ready to take appropriate actions, if required, following a sharp meltdown on Friday in equity and debt markets.

The regulators came out with separate but identical statements amid apprehensions about steep volatility in markets on Monday.

Against the backdrop of debt defaults by diversified IL&amp;FS group, there are also worries about non-banking financial companies even though the country's largest lender SBI assured lending support to the NBFC sector.

In a statement, SBI Chairman Rajnish Kumar said there was no concern on liquidity of NBFCs in view of their liquid cash position and availability of committed lines.

"The Reserve Bank of India and the Securities and Exchange Board of India are closely monitoring recent developments in financial markets and are ready to take appropriate actions, if necessary," said the regulators.

Sebi has also sought details from stock exchanges about large trades done on Friday and would be stepping up the vigil to prevent steep volatility, sources said.

On Friday the 30-share BSE Sensex suddenly tanked 1,127.58 points, or 3.03 per cent, to hit a low of 35,993.64 in afternoon trade before staging an equally sharp recovery within minutes.

The markets had opened on a strong note. After an intra-day swing of 1,495.60 points, the Sensex closed at 36,841.60, down 279.62 points.

The broader NSE Nifty shed 91.25 points to finish at 11,143.10 on Friday.

Meanwhile, some reports also suggested that some scrupulous elements are trying to destabilise markets to malign the image of the government.

Shares of housing finance firms slumped Friday, with DHFL tumbling up to 42 per cent on fears of a liquidity crisis.

Reports of debt defaults by IL&amp;FS also sparked concerns, which spilled over into other NBFC counters.

Yes Bank was the worst performer in the Sensex pack, losing a whopping 28.71 per cent, after the RBI curtailed the term of its founding CEO Rana Kapoor.

The Indian currency has also witnessed a massive plunge in the recent past due to rising trade and current account deficits in the wake of rising crude oil prices.

However, the rupee was bullish on Friday for the second day, rising 17 paise to end at 72.20 against the US dollar.

On Friday, market regulator Sebi had issued revised KYC norms for foreign portfolio investors, wherein resident as well as non-resident Indians have been permitted to hold non-controlling stake in such entities.

Overseas investors have pulled out a massive Rs 15,365 crore (USD 2.1 billion) from the capital markets so far in September, after putting in funds during the previous two months.

Earlier in the day, DHFL Sunday said it proposes to reduce exposure to commercial paper (CP) as part of overall borrowing plan and increase hedging activity, days after the shares of the company tumbled up to 42 per cent on massive selling over fears of a liquidity crisis.

Besides, the company said it will raise resources and focus on borrowings from banks and international markets and through direct assignment, said a DHFL note on 'approach to liquidity management' filed with stock exchanges.

In a rare move, the RBI and Sebi Sunday said they are "closely monitoring" activities in the financial markets and ready to take appropriate actions, if required, following a sharp meltdown on Friday in equity and debt markets.

In a rare move, the RBI and Sebi Sunday said they are "closely monitoring" activities in the financial markets and ready to take appropriate actions, if required, following a sharp meltdown on Friday in equity and debt markets. The regulators came out with separate but identical statements amid apprehensions about steep volatility in markets on Monday. Against the backdrop of debt defaults by diversified IL&FS group, there are also worries about non-banking financial companies even though the country's largest lender SBI assured lending support to the NBFC sector. In a statement, SBI Chairman Rajnish Kumar said there was no concern on liquidity of NBFCs in view of their liquid cash position and availability of committed lines. "The Reserve Bank of India and the Securities and Exchange Board of India are closely monitoring recent developments in financial markets and are ready to take appropriate actions, if necessary," said the regulators. Sebi has also sought details from stock exchanges about large trades done on Friday and would be stepping up the vigil to prevent steep volatility, sources said. On Friday the 30-share BSE Sensex suddenly tanked 1,127.58 points, or 3.03 per cent, to hit a low of 35,993.64 in afternoon trade before staging an equally sharp recovery within minutes. The markets had opened on a strong note. After an intra-day swing of 1,495.60 points, the Sensex closed at 36,841.60, down 279.62 points. The broader NSE Nifty shed 91.25 points to finish at 11,143.10 on Friday. Meanwhile, some reports also suggested that some scrupulous elements are trying to destabilise markets to malign the image of the government. Shares of housing finance firms slumped Friday, with DHFL tumbling up to 42 per cent on fears of a liquidity crisis. Reports of debt defaults by IL&FS also sparked concerns, which spilled over into other NBFC counters. Yes Bank was the worst performer in the Sensex pack, losing a whopping 28.71 per cent, after the RBI curtailed the term of its founding CEO Rana Kapoor. The Indian currency has also witnessed a massive plunge in the recent past due to rising trade and current account deficits in the wake of rising crude oil prices. However, the rupee was bullish on Friday for the second day, rising 17 paise to end at 72.20 against the US dollar. On Friday, market regulator Sebi had issued revised KYC norms for foreign portfolio investors, wherein resident as well as non-resident Indians have been permitted to hold non-controlling stake in such entities. Overseas investors have pulled out a massive Rs 15,365 crore (USD 2.1 billion) from the capital markets so far in September, after putting in funds during the previous two months. Earlier in the day, DHFL Sunday said it proposes to reduce exposure to commercial paper (CP) as part of overall borrowing plan and increase hedging activity, days after the shares of the company tumbled up to 42 per cent on massive selling over fears of a liquidity crisis. Besides, the company said it will raise resources and focus on borrowings from banks and international markets and through direct assignment, said a DHFL note on 'approach to liquidity management' filed with stock exchanges.

Closely monitoring financial markets, ready to take actions, say RBI and Sebi

Headline inflation surging to a four-month high of 4.87 per cent in May is likely to force the Reserve Bank of India (RBI) to hike rates once again at its August monetary policy review, analysts said.

The commentary comes a day after industry body Confederation of Indian Industry (CII) said that monetary policy tightening will increase the cost of doing business and force India Inc to slowdown on investments, which are critical for pushing the growth agenda.

"With both core and headline inflation only likely to face greater upside pressure from various factors in the coming months, we continue to expect one more 0.25 per cent rate hike from the RBI. This could occur as soon as the&nbsp;July 31-August 1&nbsp;meeting," analysts at the French brokerage BNP Paribas said in a note.

UBS Securities said a hike is "likely in August".

"If global crude prices remain at current levels and core inflation remains elevated, the next rate hike could be announced sooner (likely in August) than later," it said, adding that the announcement of minimum support prices for agri produce will be watched keenly.

Analysts at German brokerage Deutsche Bank also said they expect a 0.25 per cent rate hike by the RBI at the August review, saying an inflation targeting central bank will feel the need to tighten the policy based on these "signals" from inflation.

However, Bank of America Merill Lynch said base effects is driving up the inflation number and added that the RBI will be on "long hold".

Official data released yesterday said retail inflation jumped to a four-month high of 4.87 per cent in May on costlier food items such as fruits, vegetables and cereals, coupled with high fuel rates.

In May last year, the retail inflation was at a low of 2.18 per cent.

At its policy review last week, the apex bank had upped its retail inflation projection by 0.30 per cent and kept the policy stance in the neutral zone, even as it hiked the key rates by 0.25 per cent.&nbsp;

In May last year, the retail inflation was at a low of 2.18 per cent

Headline inflation surging to a four-month high of 4.87 per cent in May is likely to force the Reserve Bank of India (RBI) to hike rates once again at its August monetary policy review, analysts said. The commentary comes a day after industry body Confederation of Indian Industry (CII) said that monetary policy tightening will increase the cost of doing business and force India Inc to slowdown on investments, which are critical for pushing the growth agenda. "With both core and headline inflation only likely to face greater upside pressure from various factors in the coming months, we continue to expect one more 0.25 per cent rate hike from the RBI. This could occur as soon as the July 31-August 1 meeting," analysts at the French brokerage BNP Paribas said in a note. UBS Securities said a hike is "likely in August". "If global crude prices remain at current levels and core inflation remains elevated, the next rate hike could be announced sooner (likely in August) than later," it said, adding that the announcement of minimum support prices for agri produce will be watched keenly. Analysts at German brokerage Deutsche Bank also said they expect a 0.25 per cent rate hike by the RBI at the August review, saying an inflation targeting central bank will feel the need to tighten the policy based on these "signals" from inflation. However, Bank of America Merill Lynch said base effects is driving up the inflation number and added that the RBI will be on "long hold". Official data released yesterday said retail inflation jumped to a four-month high of 4.87 per cent in May on costlier food items such as fruits, vegetables and cereals, coupled with high fuel rates. In May last year, the retail inflation was at a low of 2.18 per cent. At its policy review last week, the apex bank had upped its retail inflation projection by 0.30 per cent and kept the policy stance in the neutral zone, even as it hiked the key rates by 0.25 per cent.

RBI may hike rates again in Aug on rise in inflation: Analysts

Indian shares closed at their highest in more than three weeks on Thursday, with market heavyweights such as&nbsp;Reliance&nbsp;Industries&nbsp;Ltd and ICICI Bank Ltd contributing most to gains.

The broader NSE&nbsp;Nifty&nbsp;ended up 0.78 per cent at 10,768.35, while the benchmark BSE&nbsp;Sensex ended 0.81 per cent higher at 35,463.08.

Reliance&nbsp;Industries&nbsp;posted its sixth straight session of&nbsp;gains&nbsp;to rise 1.7 per cent, while ICICI bank snapped a three-day losing streak to end 2.5 per cent higher, a day after the Reserve Bank of India raised its policy rate for the first time in&nbsp;over&nbsp;four years.

The broader NSE Nifty ended up 0.78 per cent at 10,768.35, while the benchmark BSE Sensex ended 0.81 per cent higher at 35,463.08

Indian shares closed at their highest in more than three weeks on Thursday, with market heavyweights such as Reliance Industries Ltd and ICICI Bank Ltd contributing most to gains. The broader NSE Nifty ended up 0.78 per cent at 10,768.35, while the benchmark BSE Sensex ended 0.81 per cent higher at 35,463.08. Reliance Industries posted its sixth straight session of gains to rise 1.7 per cent, while ICICI bank snapped a three-day losing streak to end 2.5 per cent higher, a day after the Reserve Bank of India raised its policy rate for the first time in over four years.

Nifty, Sensex hit over three-week closing high; Reliance Industries gains

The Reserve Bank of India has hiked its repo rate by 25 basis points to 6.25%.&nbsp;

This is the first hike in over four years.&nbsp;

The reverse repo rate has been hiked to 6.5%.&nbsp;

The repo rate is the rate of interest at which the RBI loans money to other banks. The repo rate then determines the rate of interest at which the banks loan money to their customers.&nbsp;

A hike in the repo rate will mean an increase in the EMIs of people who have borrowed money at fluctuating rates.&nbsp;

The reverse repo rate is the rate at which the RBI borrows money from the market.&nbsp;

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet" data-lang="en">
Reserve Bank of India (RBI) projects inflation for 2018-19 at 4.8- 4.9% in first half and 4.7% in the second half of the year, projection for GDP is 7.5-7.6 in first half and 7.3-7.4 in the second half.
— ANI (@ANI) <a href="https://twitter.com/ANI/status/1004288695942254595?ref_src=twsrc%5Etfw">June 6, 2018</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>

The RBI meanwhile projected inflation for 2018-19 at 4.8- 4.9% in the first half and 4.7% in the second half of the year.&nbsp;

Its GDP projection was 7.5-7.6% for the first half and 7.3-7.4% in the second half.

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet" data-lang="en">
Gross domestic product (GDP) growth for 2017-18 has been revised & estimated at 6.7% backed by an all time high production of food grains and horticulture, strengthening of industrial growth and resilient services sector activity: RBI Guv Urjit Patel <a href="https://t.co/3Eam0qniRf">pic.twitter.com/3Eam0qniRf</a>
— ANI (@ANI) <a href="https://twitter.com/ANI/status/1004298584139841536?ref_src=twsrc%5Etfw">June 6, 2018</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>

&nbsp;

This was the first hike in over 4 years. The reverse repo rate is now 6.5%

The Reserve Bank of India has hiked its repo rate by 25 basis points to 6.25%. This is the first hike in over four years. The reverse repo rate has been hiked to 6.5%. The repo rate is the rate of interest at which the RBI loans money to other banks. The repo rate then determines the rate of interest at which the banks loan money to their customers. A hike in the repo rate will mean an increase in the EMIs of people who have borrowed money at fluctuating rates. The reverse repo rate is the rate at which the RBI borrows money from the market. Reserve Bank of India (RBI) projects inflation for 2018-19 at 4.8- 4.9% in first half and 4.7% in the second half of the year, projection for GDP is 7.5-7.6 in first half and 7.3-7.4 in the second half. — ANI (@ANI) June 6, 2018 × The RBI meanwhile projected inflation for 2018-19 at 4.8- 4.9% in the first half and 4.7% in the second half of the year. Its GDP projection was 7.5-7.6% for the first half and 7.3-7.4% in the second half. Gross domestic product (GDP) growth for 2017-18 has been revised & estimated at 6.7% backed by an all time high production of food grains and horticulture, strengthening of industrial growth and resilient services sector activity: RBI Guv Urjit Patel pic.twitter.com/3Eam0qniRf — ANI (@ANI) June 6, 2018 ×

RBI hikes repo rate to 6.25%, EMIs to get costlier

Benchmark Sensex tanked over 215 points to close at 35,011.89 on Monday as cautious investors trimmed their portfolios amid the RBI's monetary policy meeting getting underway.

The RBI's Monetary Policy Committee began its three-day meeting today amid speculation that it may hike the key interest rate on June 6 for the first time in about four-and-half years on account of firming inflation.

The 30-share Sensex opened on a strong footing on across-the-board gains amid positive global leads and hit a high of 35,555.59.

&nbspHowever, it soon slipped into the negative zone on massive selling in several heavyweights. It finally ended at 35,011.89, down 215.37 points or 0.61 per cent.&nbsp

The broader NSE Nifty too ended lower by 67.70 points, or 0.63 per cent, at 10,628.50, after hovering between 10,770.30 and 10,618.35.

Meanwhile, foreign portfolio investors (FPIs) offloaded shares worth a net Rs 202.80 crore, while domestic institutional investors (DIIs) bought equities to the tune of Rs 337.97 crore on Friday, as per provisional data.&nbsp

Benchmark Sensex tanked over 215 points to close at 35,011.89 on Monday as cautious investors trimmed their portfolios amid the RBI's monetary policy meeting getting underway

Benchmark Sensex tanked over 215 points to close at 35,011.89 on Monday as cautious investors trimmed their portfolios amid the RBI's monetary policy meeting getting underway. The RBI's Monetary Policy Committee began its three-day meeting today amid speculation that it may hike the key interest rate on June 6 for the first time in about four-and-half years on account of firming inflation. The 30-share Sensex opened on a strong footing on across-the-board gains amid positive global leads and hit a high of 35,555.59. &nbspHowever, it soon slipped into the negative zone on massive selling in several heavyweights. It finally ended at 35,011.89, down 215.37 points or 0.61 per cent. The broader NSE Nifty too ended lower by 67.70 points, or 0.63 per cent, at 10,628.50, after hovering between 10,770.30 and 10,618.35. Meanwhile, foreign portfolio investors (FPIs) offloaded shares worth a net Rs 202.80 crore, while domestic institutional investors (DIIs) bought equities to the tune of Rs 337.97 crore on Friday, as per provisional data.

Sensex slumps 215 points; RBI policy meet gets underway

The CEO and Managing Director of IDBI Bank Mahesh Kumar Jain has now been appointed as the Deputy Governor of Reserve Bank of India (RBI) for a term of three years.&nbsp

Jain was appointed as IDBI's MD and CEO of IDBI bank in April 2017 before which he was Managing Director & Chief Executive Officer of Indian Bank.&nbsp

Jain joined Indian Bank as an executive director in September 2013 where he handled several key portfolios. Prior to joining Indian Bank, Jain served as general manager with Syndicate Bank. He began his banking career with Punjab National Bank.&nbsp

He was previously a member of the steering committee on Risk Management of IBA and a member of the IBA working group on risk management and implementation of Basel II and III.&nbsp

Jain was appointed as IDBI's MD and CEO of IDBI bank in April 2017 before which he was Managing Director & Chief Executive Officer of Indian Bank

The CEO and Managing Director of IDBI Bank Mahesh Kumar Jain has now been appointed as the Deputy Governor of Reserve Bank of India (RBI) for a term of three years. Jain was appointed as IDBI's MD and CEO of IDBI bank in April 2017 before which he was Managing Director & Chief Executive Officer of Indian Bank. Jain joined Indian Bank as an executive director in September 2013 where he handled several key portfolios. Prior to joining Indian Bank, Jain served as general manager with Syndicate Bank. He began his banking career with Punjab National Bank. He was previously a member of the steering committee on Risk Management of IBA and a member of the IBA working group on risk management and implementation of Basel II and III.

Mahesh Kumar Jain appointed as Deputy Governor of RBI for three years

India's five biggest state-run banks are experiencing a bad loan of Rs 47,000 crore.

The audits revealed by the Reserve Bank of India for the year ended March 31, 2017 showed that the banks were experienced large losses.

Half of the countries 22 state-run banks are under the Reserve Bank of India's strict Prompt Corrective Action (PCA), therefore the hidden bad debt will have a catastrophic&nbsp;effect on the sector.

RBI's former deputy governor has said that a few of the banks undergoing PCA may find it hard to survive.

This increases reliance on loan recoveries from India's new bankruptcy process.

An analyst at a financial service said that Bank of India would now need a “favourable outcome” -- loan recoveries of about 50 per cent -- from the bankruptcy process.

The audits revealed by the Reserve Bank of India for the year ended March 31, 2017 showed that the banks were experienced large losses

India's five biggest state-run banks are experiencing a bad loan of Rs 47,000 crore. The audits revealed by the Reserve Bank of India for the year ended March 31, 2017 showed that the banks were experienced large losses. Half of the countries 22 state-run banks are under the Reserve Bank of India's strict Prompt Corrective Action (PCA), therefore the hidden bad debt will have a catastrophic effect on the sector. RBI's former deputy governor has said that a few of the banks undergoing PCA may find it hard to survive. This increases reliance on loan recoveries from India's new bankruptcy process. An analyst at a financial service said that Bank of India would now need a “favourable outcome” -- loan recoveries of about 50 per cent -- from the bankruptcy process.

RBI discovers Rs 47,000 crore bad loan at five biggest state-run banks

A business survey showed on Wednesday that Indian factory growth accelerated in April on strong domestic demand and output, while price pressures were subdued in a comforting sign for the central bank, the Reserve Bank of India, as it seeks 
to temper inflation without hurting the economy.

The Nikkei Manufacturing Purchasing Managers' Index (PMI), compiled by IHS Markit, rose to 51.6 last month from March's 51.0, as predicted by a Reuters poll and above the 50-point mark that separates growth from contraction for a ninth straight month.

"The Indian manufacturing economy started the quarter on a slightly stronger footing as growth picked-up from March's five-month low, buoyed by stronger demand conditions," Aashna Dodhia, an economist at IHS Markit, said in a press 
release.

"Encouragingly, PMI data highlighted inflationary pressures moderated for the second month in a row, with input cost and output charge inflation at the weakest since September 2017 and July 2017 respectively."

Inflation is forecast to average 4.7 per cent in the fiscal year ending next March, and 4.9 per cent the following year, a separate Reuters poll showed.

While retail inflation has eased this year and hit a five-month low of 4.28 per cent in March it remained above the Reserve Bank of India's (RBI) medium-term target of 4 per cent.

The RBI has kept interest rates steady after a 25 basis-point cut to the repo rate in August last year. It is forecast to keep the rates unchanged until the second half of next year.

In the latest survey the new orders sub-index, a proxy for domestic demand, rose to 52.0 in April, encouraging firms to increase output and resume hiring.

Optimism about future output in April was the strongest since July 2017. That suggests Asia's third largest economy is in good heart as disruptions from a shock ban on high-value currency notes in November 2016 and the chaotic launch of a goods and services tax (GST) in July fade.

As per a Reuters poll, India will claim top spot as the world's fastest-growing major economy this year, but rising trade tensions between the United States and China may restrain growth.

Export orders slipped to a 5-month low in April, the PMI survey showed.

(With inputs from Reuters)

The Nikkei Manufacturing Purchasing Managers' Index rose to 51.6 last month from March's 51.0 and above the 50-point mark that separates growth from contraction for a ninth straight month

A business survey showed on Wednesday that Indian factory growth accelerated in April on strong domestic demand and output, while price pressures were subdued in a comforting sign for the central bank, the Reserve Bank of India, as it seeks to temper inflation without hurting the economy. The Nikkei Manufacturing Purchasing Managers' Index (PMI), compiled by IHS Markit, rose to 51.6 last month from March's 51.0, as predicted by a Reuters poll and above the 50-point mark that separates growth from contraction for a ninth straight month. "The Indian manufacturing economy started the quarter on a slightly stronger footing as growth picked-up from March's five-month low, buoyed by stronger demand conditions," Aashna Dodhia, an economist at IHS Markit, said in a press release. "Encouragingly, PMI data highlighted inflationary pressures moderated for the second month in a row, with input cost and output charge inflation at the weakest since September 2017 and July 2017 respectively." Inflation is forecast to average 4.7 per cent in the fiscal year ending next March, and 4.9 per cent the following year, a separate Reuters poll showed. While retail inflation has eased this year and hit a five-month low of 4.28 per cent in March it remained above the Reserve Bank of India's (RBI) medium-term target of 4 per cent. The RBI has kept interest rates steady after a 25 basis-point cut to the repo rate in August last year. It is forecast to keep the rates unchanged until the second half of next year. In the latest survey the new orders sub-index, a proxy for domestic demand, rose to 52.0 in April, encouraging firms to increase output and resume hiring. Optimism about future output in April was the strongest since July 2017. That suggests Asia's third largest economy is in good heart as disruptions from a shock ban on high-value currency notes in November 2016 and the chaotic launch of a goods and services tax (GST) in July fade. As per a Reuters poll, India will claim top spot as the world's fastest-growing major economy this year, but rising trade tensions between the United States and China may restrain growth. Export orders slipped to a 5-month low in April, the PMI survey showed. (With inputs from Reuters)

India's factory growth accelerates in April on strong domestic demand

Having speeded up printing presses to refill banks' empty ATMs in some parts of the country, the Reserve Bank of India released data on Wednesday showing that people were still hoarding cash as withdrawals outpaced spending.

Typically, economists say, cash withdrawn from banks takes a few months to re-enter circulation as people spend. Because of these lags, the weekly reserve money figures don't tell exactly how much people have hoarded, but the data does give a strong sense of the trend.

The incremental increase in currency in circulation, a component of the data, shows how much people are withdrawing every week and the amount of new money the RBI is supplying to banks.

During the week to April 20, they took 163.4 billion rupees ($2.44 billion) out of the banks, bringing the total for the first three weeks of the month to 595.2 billion rupees, the RBI data showed. In the previous three weeks, withdrawals totalled 164.7 billion rupees.

Currency withdrawals in the January-March quarter stood at 1.4 trillion rupees, about 27 per cent more than in the same quarter of 2016.

Overall, the currency in circulation stood at 18.9 trillion rupees as of April 20, 18.9 per cent up since the beginning of last October when withdrawals began to gather pace.

Alarm bells only rang this month when cash dispensers began running dry in several states, including Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar.

Neither the central bank nor commercial bankers appear to have a clear idea about this sudden pick up in withdrawals.

The RBI did not elaborate on Wednesday's reserve money data but in a circular last week it had said the shortage could be due to a delay in getting cash to the ATMs and that it has ramped up note printing.

But there is concern that Modi's audacious decision to take high-value banknotes out of circulation in late 2016 may be suffering a blowback, as Indians revert to old habits of keeping cash out of the banks, and out of sight of the taxman.

Rupa Rege Nitsure, a group chief economist at L&T Finance Holdings, suspected the spike in withdrawals could be a belated reaction after the government's so-called "demonetisation" move.

"Post demonetisation, there is a fear among people over the availability of cash and there could be a tendency of small businesses withdrawing money and hoarding cash given that bank credit is not easily available to them," she said.

Returning to normal

The government had wanted to push people toward making more transactions electronically, rather than rely on cash.

But the recent shortages of the new 2000 rupee bank notes has left analysts wondering if mattresses are being re-stuffed.

Analysts reckon a number of factors are behind the hoarding, including concerns over the health of Indian banks, avoidance of a new goods and services tax, preparations for campaign spending ahead of an election in the southern state Karnataka, and farmers withdrawing money during the harvest season of January to March.

Some analysts also say that, as economic growth managed to outpace the recovery in money supply after the 'demonetisation', there was always going to be a squeeze on demand for cash.

Afterall, it took until March for currency in circulation to rise above 17.98 trillion rupees level posted before the 2016 demonetisation.

"The currency supply by RBI has not kept pace with the growth in the economy and that is the reason the demand for cash has increased," said State Bank of India's chief economist Soumya Kanti Ghosh.

According to a note from SBI issued on April 18 the RBI still had to print an additional 700 billion rupees ($10.54 billion) to bridge the gap between demand and supply.

Neeraj Vyas, SBI's chief operating officer, told Reuters, that the downtime for ATMs out of money had reduced, but the situation should return to normal in "maybe another 5-7 days".

Currency withdrawals in the January-March quarter stood at 1.4 trillion rupees, about 27 percent more than in the same quarter of 2016

Having speeded up printing presses to refill banks' empty ATMs in some parts of the country, the Reserve Bank of India released data on Wednesday showing that people were still hoarding cash as withdrawals outpaced spending. Typically, economists say, cash withdrawn from banks takes a few months to re-enter circulation as people spend. Because of these lags, the weekly reserve money figures don't tell exactly how much people have hoarded, but the data does give a strong sense of the trend. The incremental increase in currency in circulation, a component of the data, shows how much people are withdrawing every week and the amount of new money the RBI is supplying to banks. During the week to April 20, they took 163.4 billion rupees ($2.44 billion) out of the banks, bringing the total for the first three weeks of the month to 595.2 billion rupees, the RBI data showed. In the previous three weeks, withdrawals totalled 164.7 billion rupees. Currency withdrawals in the January-March quarter stood at 1.4 trillion rupees, about 27 per cent more than in the same quarter of 2016. Overall, the currency in circulation stood at 18.9 trillion rupees as of April 20, 18.9 per cent up since the beginning of last October when withdrawals began to gather pace. Alarm bells only rang this month when cash dispensers began running dry in several states, including Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar. Neither the central bank nor commercial bankers appear to have a clear idea about this sudden pick up in withdrawals. The RBI did not elaborate on Wednesday's reserve money data but in a circular last week it had said the shortage could be due to a delay in getting cash to the ATMs and that it has ramped up note printing. But there is concern that Modi's audacious decision to take high-value banknotes out of circulation in late 2016 may be suffering a blowback, as Indians revert to old habits of keeping cash out of the banks, and out of sight of the taxman. Rupa Rege Nitsure, a group chief economist at L&T Finance Holdings, suspected the spike in withdrawals could be a belated reaction after the government's so-called "demonetisation" move. "Post demonetisation, there is a fear among people over the availability of cash and there could be a tendency of small businesses withdrawing money and hoarding cash given that bank credit is not easily available to them," she said. Returning to normal The government had wanted to push people toward making more transactions electronically, rather than rely on cash. But the recent shortages of the new 2000 rupee bank notes has left analysts wondering if mattresses are being re-stuffed. Analysts reckon a number of factors are behind the hoarding, including concerns over the health of Indian banks, avoidance of a new goods and services tax, preparations for campaign spending ahead of an election in the southern state Karnataka, and farmers withdrawing money during the harvest season of January to March. Some analysts also say that, as economic growth managed to outpace the recovery in money supply after the 'demonetisation', there was always going to be a squeeze on demand for cash. Afterall, it took until March for currency in circulation to rise above 17.98 trillion rupees level posted before the 2016 demonetisation. "The currency supply by RBI has not kept pace with the growth in the economy and that is the reason the demand for cash has increased," said State Bank of India's chief economist Soumya Kanti Ghosh. According to a note from SBI issued on April 18 the RBI still had to print an additional 700 billion rupees ($10.54 billion) to bridge the gap between demand and supply. Neeraj Vyas, SBI's chief operating officer, told Reuters, that the downtime for ATMs out of money had reduced, but the situation should return to normal in "maybe another 5-7 days".

RBI data suggests Indians may have gone back to hoarding cash

Asserting that the Indian economy turned in a resilient performance in 2017-18, Reserve Bank of India (RBI) Governor Urjit Patel has said the country's growth is expected to accelerate next fiscal.

Mr Patel was addressing the International Monetary Finance Committee here yesterday.

"The Indian economy turned in a resilient performance in 2017-18," Mr Patel said.

Although the real GDP growth was moderated to 6.6 per cent from 7.1 per cent a year ago, there was a strong rebound in the second half of the year on the back of a turnaround in investment demand, he said.

This was supported by an acceleration in manufacturing, rising sales growth, a pick-up in capacity utilisation, strong activity in the services sector and a record agricultural harvest, the RBI governor added.

"Several factors are expected to help accelerate the pace of growth in 2018-19. There are now clearer signs that the revival in investment activity will be sustained," he said.

Global demand has been improving, which should encourage exports and boost fresh investments, Patel said, adding that on the whole, real GDP growth was expected to expand at 7.4 per cent in 2018-19, with risks evenly balanced.

In his address, Mr Patel said since November 2016, headline consumer price inflation had generally remained below the medium-term target of four per cent.

An unusual spike in vegetables prices pushed up inflation to a recent peak of 5.2 per cent in December, but it eased in subsequent months to reach 4.3 per cent in March, he said.

Mr Patel said several factors were likely to influence the inflation outlook, including a possible moderation in food prices if the monsoon turned out to be normal and was supported by an effective food supply management.

"Countervailing this, upside risks emanate from the distinct hardening bias in crude oil prices, the steady firming up of inflation excluding food and fuel mirroring pick up in domestic demand, and spillovers from financial volatility as markets re-price the path of monetary policy normalisation by systemic central banks," he said.

Noting that risks to inflation are tilted to the upside, the monetary policy rate was kept unchanged at 6.0 per cent in April 2018 with a neutral stance, Mr Patel said.

Asserting that the government is committed to fiscal prudence, the RBI governor said aided by buoyancy in tax revenues and rationalisation of subsidies, the gross fiscal deficit (GFD) of the central government has been steadily brought down since 2013-14 to 3.5 per cent of GDP in 2017-18 without compromising on public investment requirements and social sector spending.

The GFD is budgeted lower at 3.3 per cent in 2018-19, he said. The government has accepted a debt rule that will bring down the debt-to-GDP ratio to 40 per cent over a period of time by 2024-25.

Mr Patel said the goods and services tax (GST), which was implemented from July 2017 has reformed the system of indirect taxes by simplifying payments and credits, and improving the efficiency of movement of goods across the country.

Automation of tax payments and 'team-based assessment with dynamic jurisdiction' without direct interface with tax payers has improved overall efficiency and transparency of revenue administration, he said.

Mr Patel said with the pace of import growth relative to that of exports, the current account deficit (CAD) expanded from 0.7 per cent in 2016-17 to 1.9 per cent for the first nine months of 2017-18.

External financing conditions remained comfortable, boosted mainly by robust inflows of foreign direct investment (FDI), he said.

The UNCTAD's survey of multinational enterprises ranked India as the third most favoured destination for FDI for 2017-19. Reflecting these developments, India's foreign exchange reserves at $424 billion were equivalent of 11 months of imports, he added. 
"India has persevered with structural reforms over a wide area ranging from a flexible inflation targeting framework for monetary policy liberalisation of FDI flows a unique identification (Aadhaar) backed direct benefit transfers an insolvency and bankruptcy code the GST realty reforms and a swathe of measures for improvement in the ease of doing business more generally," he said.

These factors have improved India's global ranking in the World Bank's Ease of Doing Business, Mr Patel added.

'Several factors are expected to help accelerate the pace of growth in 2018-19. There are now clearer signs that the revival in investment activity will be sustained,' he said

Asserting that the Indian economy turned in a resilient performance in 2017-18, Reserve Bank of India (RBI) Governor Urjit Patel has said the country's growth is expected to accelerate next fiscal. Mr Patel was addressing the International Monetary Finance Committee here yesterday. "The Indian economy turned in a resilient performance in 2017-18," Mr Patel said. Although the real GDP growth was moderated to 6.6 per cent from 7.1 per cent a year ago, there was a strong rebound in the second half of the year on the back of a turnaround in investment demand, he said. This was supported by an acceleration in manufacturing, rising sales growth, a pick-up in capacity utilisation, strong activity in the services sector and a record agricultural harvest, the RBI governor added. "Several factors are expected to help accelerate the pace of growth in 2018-19. There are now clearer signs that the revival in investment activity will be sustained," he said. Global demand has been improving, which should encourage exports and boost fresh investments, Patel said, adding that on the whole, real GDP growth was expected to expand at 7.4 per cent in 2018-19, with risks evenly balanced. In his address, Mr Patel said since November 2016, headline consumer price inflation had generally remained below the medium-term target of four per cent. An unusual spike in vegetables prices pushed up inflation to a recent peak of 5.2 per cent in December, but it eased in subsequent months to reach 4.3 per cent in March, he said. Mr Patel said several factors were likely to influence the inflation outlook, including a possible moderation in food prices if the monsoon turned out to be normal and was supported by an effective food supply management. "Countervailing this, upside risks emanate from the distinct hardening bias in crude oil prices, the steady firming up of inflation excluding food and fuel mirroring pick up in domestic demand, and spillovers from financial volatility as markets re-price the path of monetary policy normalisation by systemic central banks," he said. Noting that risks to inflation are tilted to the upside, the monetary policy rate was kept unchanged at 6.0 per cent in April 2018 with a neutral stance, Mr Patel said. Asserting that the government is committed to fiscal prudence, the RBI governor said aided by buoyancy in tax revenues and rationalisation of subsidies, the gross fiscal deficit (GFD) of the central government has been steadily brought down since 2013-14 to 3.5 per cent of GDP in 2017-18 without compromising on public investment requirements and social sector spending. The GFD is budgeted lower at 3.3 per cent in 2018-19, he said. The government has accepted a debt rule that will bring down the debt-to-GDP ratio to 40 per cent over a period of time by 2024-25. Mr Patel said the goods and services tax (GST), which was implemented from July 2017 has reformed the system of indirect taxes by simplifying payments and credits, and improving the efficiency of movement of goods across the country. Automation of tax payments and 'team-based assessment with dynamic jurisdiction' without direct interface with tax payers has improved overall efficiency and transparency of revenue administration, he said. Mr Patel said with the pace of import growth relative to that of exports, the current account deficit (CAD) expanded from 0.7 per cent in 2016-17 to 1.9 per cent for the first nine months of 2017-18. External financing conditions remained comfortable, boosted mainly by robust inflows of foreign direct investment (FDI), he said. The UNCTAD's survey of multinational enterprises ranked India as the third most favoured destination for FDI for 2017-19. Reflecting these developments, India's foreign exchange reserves at $424 billion were equivalent of 11 months of imports, he added. "India has persevered with structural reforms over a wide area ranging from a flexible inflation targeting framework for monetary policy liberalisation of FDI flows a unique identification (Aadhaar) backed direct benefit transfers an insolvency and bankruptcy code the GST realty reforms and a swathe of measures for improvement in the ease of doing business more generally," he said. These factors have improved India's global ranking in the World Bank's Ease of Doing Business, Mr Patel added.

India's pace of growth to accelerate in 2018-19: RBI governor

The Reserve Bank of India kept its policy rates on hold for the fourth straight meeting on Thursday and retained its "neutral" stance even as inflationary pressures have eased more than expected.

The RBI kept its policy repo rate unchanged at 6.00 per cent, its lowest since November 2010.

The reverse repo rate also remained unchanged at 5.75 per cent.

Five of six members on the monetary policy committee voted for a hold, while one wanted a hike in the repo rate.

Inflation concerns have eased substantially following a crash in vegetable prices which is expected to keep price pressures soft for the next few months.

However, oil prices remain a risk, with India importing about 80 per cent of its crude requirement.

Bonds rose after the RBI's statement, while the rupee firmed and stocks extended early gains.

The 10-year benchmark bond yield fell to 7.19 per cent from 7.28 percent before the announcement, while the rupee was trading at 64.95 to the dollar from 65.04 before. The main market index was up 1.8 per cent.

INFLATION EASING, GROWTH

The RBI projected economic growth of 7.4 per cent for the current fiscal year that began on April 1.

It also lowered its April-September inflation projection to 4.7-5.1 per cent from February's 5.1-5.6 per cent.

After hitting a 17-month high in December, retail inflation eased for the second straight month in February and by more than expected, to a four-month low of 4.44 per cent. But it was still higher than the central bank's medium term target of 4 percent.

That has prompted most market watchers to push back their forecasts for a rate hike to early 2019, from earlier estimates of the second half of this year.

While inflation fears have eased in the short-term, the RBI sounded cautious and opted to wait for more data instead of giving a clear indication of its policy path.

"The MPC reiterates its commitment to achieving the medium-term target for headline inflation of 4 percent on a durable basis," the RBI said in a statement.

The RBI is also mindful of the pace of India's economic recovery, after a loan-fraud scandal worth over $2 billion at the country's second largest state lender Punjab National Bank.

Greater regulatory scrutiny in the wake of the scandal could make banks more wary of lending, slowing down business activity after India's economy grew 7.2 percent in the October-December, its fastest in five quarters.

The reverse repo rate was also unchanged at 5.75 per cent.

The Reserve Bank of India kept its policy rates on hold for the fourth straight meeting on Thursday and retained its "neutral" stance even as inflationary pressures have eased more than expected. The RBI kept its policy repo rate unchanged at 6.00 per cent, its lowest since November 2010. The reverse repo rate also remained unchanged at 5.75 per cent. Five of six members on the monetary policy committee voted for a hold, while one wanted a hike in the repo rate. Inflation concerns have eased substantially following a crash in vegetable prices which is expected to keep price pressures soft for the next few months. However, oil prices remain a risk, with India importing about 80 per cent of its crude requirement. Bonds rose after the RBI's statement, while the rupee firmed and stocks extended early gains. The 10-year benchmark bond yield fell to 7.19 per cent from 7.28 percent before the announcement, while the rupee was trading at 64.95 to the dollar from 65.04 before. The main market index was up 1.8 per cent. INFLATION EASING, GROWTH The RBI projected economic growth of 7.4 per cent for the current fiscal year that began on April 1. It also lowered its April-September inflation projection to 4.7-5.1 per cent from February's 5.1-5.6 per cent. After hitting a 17-month high in December, retail inflation eased for the second straight month in February and by more than expected, to a four-month low of 4.44 per cent. But it was still higher than the central bank's medium term target of 4 percent. That has prompted most market watchers to push back their forecasts for a rate hike to early 2019, from earlier estimates of the second half of this year. While inflation fears have eased in the short-term, the RBI sounded cautious and opted to wait for more data instead of giving a clear indication of its policy path. "The MPC reiterates its commitment to achieving the medium-term target for headline inflation of 4 percent on a durable basis," the RBI said in a statement. The RBI is also mindful of the pace of India's economic recovery, after a loan-fraud scandal worth over $2 billion at the country's second largest state lender Punjab National Bank. Greater regulatory scrutiny in the wake of the scandal could make banks more wary of lending, slowing down business activity after India's economy grew 7.2 percent in the October-December, its fastest in five quarters.

RBI keeps repo rate unchanged at 6%, cuts inflation forecast

The BSE Sensex rose over 600 points after the Reserve Bank of India kept its repo rate unchanged at 6 per cent. The reverse repo rate was also kept unchanged at 5.75 per cent.&nbsp

The Nifty meanwhile rose over 200 points.&nbsp

The bank had been expected to stick to its 'neutral' stance to support an early recovery in economic growth as inflation eases.&nbsp

The Sensex finally closed 577.73 points (1.75%) up at 33,596.80, while the Nifty closed 196.75 points (1.94%) up at 10,325.15.&nbsp

The stock market had been rising Thursday even before the central bank announced its new rates.&nbsp

The shares were tracking global equity markets that recovered after fears of a Sino-US trade war eased, with metal stocks such as Hindalco Industries Ltd and banks such as ICICI Bank Ltd among top gainers.

The United States expressed willingness to negotiate a resolution to the trade dispute with China after Beijing retaliated against proposed US tariffs on $50 billion in Chinese goods by targeting key American imports.

"All sectors which were impacted yesterday, including metals, are recovering today mainly because the fears of escalation in trade wars have receded, at least for the time-being," said Deepak Jasani, head of retail research at HDFC Securities.

(With inputs from Reuters)

The Sensex finally closed 577.73 points (1.75%) up at 33,596.80, while the Nifty closed 196.75 points (1.94%) up at 10,325.15

The BSE Sensex rose over 600 points after the Reserve Bank of India kept its repo rate unchanged at 6 per cent. The reverse repo rate was also kept unchanged at 5.75 per cent. The Nifty meanwhile rose over 200 points. The bank had been expected to stick to its 'neutral' stance to support an early recovery in economic growth as inflation eases. The Sensex finally closed 577.73 points (1.75%) up at 33,596.80, while the Nifty closed 196.75 points (1.94%) up at 10,325.15. The stock market had been rising Thursday even before the central bank announced its new rates. The shares were tracking global equity markets that recovered after fears of a Sino-US trade war eased, with metal stocks such as Hindalco Industries Ltd and banks such as ICICI Bank Ltd among top gainers. The United States expressed willingness to negotiate a resolution to the trade dispute with China after Beijing retaliated against proposed US tariffs on $50 billion in Chinese goods by targeting key American imports. "All sectors which were impacted yesterday, including metals, are recovering today mainly because the fears of escalation in trade wars have receded, at least for the time-being," said Deepak Jasani, head of retail research at HDFC Securities. (With inputs from Reuters)

Sensex rises over 600 points after RBI keeps lending rates unchanged

The Reserve Bank of India (RBI) is likely to keep the repo rate unchanged at its upcoming monetary policy review on April 5th. Despite downside surprises in the recent inflation readings, the Central Bank is likely to stay hawkish on account of two factors. One, there could be caution related to higher Minimum support prices (MSPs) that the government could offer to farmers in line with its budget ‘commitment’ and because of surging oil prices. Second, core inflation has become more broad-based and is markedly high for categories like services, said HDFC Bank treasury research paper today, adding that increase in components of salaries (like housing allowance) due for employees of the state governments could add to these pressures.&nbsp;

"We would also parse the commentary carefully for the RBI’s assessment of global risks such as an economically costly trade war between the US and its major trading partners, comments from the White House on dismantling or diluting trading arrangements like NAFTA, regulatory push-backs in industries like tech on the back of the recent controversy on data leaks, and finally geopolitical tensions with Russia and China (likely to flex their muscles) and the US taking a harder line on Iran and North Korea," said the paper, while adding that this may or may not directly lead to a change in monetary stance, but the central bank’s view on how prepared the domestic economy and markets are to face these risks become important. &nbsp;

The report said that change in the outlook of oil prices and emergence of new risks on the international front (trade-war etc.) could have a direct bearing on our exchange rate assumptions as well, and added, "We no longer expect the marginal degree of appreciation (Q2 vs. Q1) that we had previously pencilled in. We now expect the USD/INR pair to trade in the range of 64.5 – 65.5 in the short term." &nbsp;

Inflation Dynamics&nbsp;

In the February meeting, the RBI had revised its inflation forecast for the fourth quarter (2017-18) to 5.1% from 4.3%-4.7% earlier. Inflation print is now expected to be lower than the RBI’s estimate in Q4 (so far the average has been 4.8%). &nbsp;

Going ahead in FY19, CPI inflation could inch-up to around 5.6% in June. We expect average inflation of 5.1% in H1-FY19 with much of the rise likely to be on account of an adverse base. Thereafter, in 2H-FY19, while the base effect could be favourable and lead to some moderation in inflation, a lot would depend on how other factors pan out. Price of crude oil, potentially higher minimum support prices, the impact of housing rent allowance increase by several state governments, besides the performance of monsoon are some risks that could emerge in 2H-FY19, warranting a reasonable degree of caution by the RBI. &nbsp;

Given the recent softer inflation prints while the RBI can afford to wait longer and maintain status quo, eventually, we believe, that elevation of some of the upside risks along with the revival in rural demand could lead to a rate hike by the last quarter of 2018-19. Upside risks to inflation are detailed below:&nbsp;

1. Core inflation pressures building up&nbsp;

Rising core: Core inflation (excluding food, fuel and petrol and diesel) has been sticky in the past three months, remaining unchanged at 5.1%. Prior to this, it had gradually risen from 3.9% in June 2017 to 5.1% in December 2017.

<img alt="1111.PNG" data-entity-type="" data-entity-uuid="" height="430" src="https://images.wionews.com/iniline-images/1111.PNG" width="770" />

46% of the core items are seeing an upward pressure. (Source: CEIC, HDFC Bank)

&nbsp;

46% of the items in core are rising versus only 9% last year: Our analysis shows that between June 2017 and February 2018, 46% of the core items have seen upward pressures while 45% of the items have remained sticky. Only 9% of the items have seen a fall. This is in contrast to the trend seen between May 2016 and May 2017, when only 9% of the core items were rising while 44% of the items where seeing a downward pressure.&nbsp;

<img alt="2222.PNG" data-entity-type="" data-entity-uuid="" height="430" src="https://images.wionews.com/iniline-images/2222.PNG" width="770" />

Service inflation has been risen more than manufacturing. (Source: CEIC, HDFC Bank)

Services inflation is leading the upswing, rising to 5.7% in February from 4.4% in the beginning of the financial year (April 2017). This indicates that any downside pressures due to the introduction of GST on service prices, as was expected, has been offset by other core items or has not filtered through to retail prices.&nbsp;

2. Return of oil pressures: Crude oil prices posted their biggest weekly gain in eight months with rising geopolitical risk in the Middle East and Saudi Arabia hinting that the current OPEC output cuts could be extended into 2019.&nbsp;

MSPs risk: In the Union Budget 2018-19, the government had announced that MSPs will be set at 1.5 times the cost of production. The impact of this increase is dependent on the definition of cost used. According to our estimates, a 1.5 times increase over the A2+FL costs could lead to a 5060bps increase in headline inflation. The RBI has also highlighted the increase in MSPs as a key risk in the past and is likely to reiterate the same in the April 5 policy meeting. That said, the RBI is likely to wait and watch before the final decision on MSPs is announced in May this year, before making changes to its stance or forecasts. &nbsp;&nbsp;

Global Dynamics&nbsp;

Change in the outlook of oil prices and the emergence of new risks on the international front (trade-war etc.) could have a direct bearing on the exchange rate assumptions and thus on the overall monetary policy equation of the RBI. &nbsp;

The report summed up saying "there are global factors that the RBI needs to watch out for, and perhaps act during phases of extreme volatility. Rupee movement in 2018 is likely to be marginal in our view but it’s important to keep a tad of exchange rate risks in an environment of tightening monetary policies globally and rising concerns of a full-blown trade war. Therefore, a status-quo for the major part of the year is the most likely scenario for the RBI. The rate hike could happen in the last quarter of FY19." &nbsp;

India Inc expects the Reserve Bank of India (RBI) to maintain its hawkish stance in its first bi-monthly monetary policy review of the new fiscal.

The Reserve Bank of India (RBI) is likely to keep the repo rate unchanged at its upcoming monetary policy review on April 5th. Despite downside surprises in the recent inflation readings, the Central Bank is likely to stay hawkish on account of two factors. One, there could be caution related to higher Minimum support prices (MSPs) that the government could offer to farmers in line with its budget ‘commitment’ and because of surging oil prices. Second, core inflation has become more broad-based and is markedly high for categories like services, said HDFC Bank treasury research paper today, adding that increase in components of salaries (like housing allowance) due for employees of the state governments could add to these pressures. "We would also parse the commentary carefully for the RBI’s assessment of global risks such as an economically costly trade war between the US and its major trading partners, comments from the White House on dismantling or diluting trading arrangements like NAFTA, regulatory push-backs in industries like tech on the back of the recent controversy on data leaks, and finally geopolitical tensions with Russia and China (likely to flex their muscles) and the US taking a harder line on Iran and North Korea," said the paper, while adding that this may or may not directly lead to a change in monetary stance, but the central bank’s view on how prepared the domestic economy and markets are to face these risks become important. The report said that change in the outlook of oil prices and emergence of new risks on the international front (trade-war etc.) could have a direct bearing on our exchange rate assumptions as well, and added, "We no longer expect the marginal degree of appreciation (Q2 vs. Q1) that we had previously pencilled in. We now expect the USD/INR pair to trade in the range of 64.5 – 65.5 in the short term." Inflation Dynamics In the February meeting, the RBI had revised its inflation forecast for the fourth quarter (2017-18) to 5.1% from 4.3%-4.7% earlier. Inflation print is now expected to be lower than the RBI’s estimate in Q4 (so far the average has been 4.8%). Going ahead in FY19, CPI inflation could inch-up to around 5.6% in June. We expect average inflation of 5.1% in H1-FY19 with much of the rise likely to be on account of an adverse base. Thereafter, in 2H-FY19, while the base effect could be favourable and lead to some moderation in inflation, a lot would depend on how other factors pan out. Price of crude oil, potentially higher minimum support prices, the impact of housing rent allowance increase by several state governments, besides the performance of monsoon are some risks that could emerge in 2H-FY19, warranting a reasonable degree of caution by the RBI. Given the recent softer inflation prints while the RBI can afford to wait longer and maintain status quo, eventually, we believe, that elevation of some of the upside risks along with the revival in rural demand could lead to a rate hike by the last quarter of 2018-19. Upside risks to inflation are detailed below: 1. Core inflation pressures building up Rising core: Core inflation (excluding food, fuel and petrol and diesel) has been sticky in the past three months, remaining unchanged at 5.1%. Prior to this, it had gradually risen from 3.9% in June 2017 to 5.1% in December 2017. 46% of the core items are seeing an upward pressure. (Source: CEIC, HDFC Bank) 46% of the items in core are rising versus only 9% last year: Our analysis shows that between June 2017 and February 2018, 46% of the core items have seen upward pressures while 45% of the items have remained sticky. Only 9% of the items have seen a fall. This is in contrast to the trend seen between May 2016 and May 2017, when only 9% of the core items were rising while 44% of the items where seeing a downward pressure. Service inflation has been risen more than manufacturing. (Source: CEIC, HDFC Bank) Services inflation is leading the upswing, rising to 5.7% in February from 4.4% in the beginning of the financial year (April 2017). This indicates that any downside pressures due to the introduction of GST on service prices, as was expected, has been offset by other core items or has not filtered through to retail prices. 2. Return of oil pressures: Crude oil prices posted their biggest weekly gain in eight months with rising geopolitical risk in the Middle East and Saudi Arabia hinting that the current OPEC output cuts could be extended into 2019. MSPs risk: In the Union Budget 2018-19, the government had announced that MSPs will be set at 1.5 times the cost of production. The impact of this increase is dependent on the definition of cost used. According to our estimates, a 1.5 times increase over the A2+FL costs could lead to a 5060bps increase in headline inflation. The RBI has also highlighted the increase in MSPs as a key risk in the past and is likely to reiterate the same in the April 5 policy meeting. That said, the RBI is likely to wait and watch before the final decision on MSPs is announced in May this year, before making changes to its stance or forecasts. Global Dynamics Change in the outlook of oil prices and the emergence of new risks on the international front (trade-war etc.) could have a direct bearing on the exchange rate assumptions and thus on the overall monetary policy equation of the RBI. The report summed up saying "there are global factors that the RBI needs to watch out for, and perhaps act during phases of extreme volatility. Rupee movement in 2018 is likely to be marginal in our view but it’s important to keep a tad of exchange rate risks in an environment of tightening monetary policies globally and rising concerns of a full-blown trade war. Therefore, a status-quo for the major part of the year is the most likely scenario for the RBI. The rate hike could happen in the last quarter of FY19."

Repo rate likely to remain unchanged in monetary policy review: HDFC Bank report

The Reserve Bank of India will keep monetary policy steady at its April meeting but shift to a hawkish stance by the end of this year and raise interest rates early in 2019 as inflation pressures build, according to a Reuters poll of economists.

All 61 economists polled between March 23-28 expected the RBI to hold the repo rate at 6.00 percent and the reverse repo rate at 5.75 per cent at its April 4-5 policy meeting.

The RBI is expected to keep rates steady for the rest of this year.

After a slowdown in growth through much of last year, India is on an upswing and reclaimed top spot as the fastest growing major economy in the final quarter of 2017, outpacing China.

Inflation, on the other hand, has eased slightly, but still projected by the central bank to remain above its 4 per cent medium-term target in 2018.

"The recent strength of the economy has belatedly shifted the discussion from whether the RBI might cut policy rates again to whether it should hike," noted Shilan Shah, senior India economist at Capital Economics.

The RBI is expected to change its stance toward policy tightening by year-end, according to 60 per cent of 33 economists, including four respondents who thought the shift would come as early as its June meeting.

"With growth-inflation data likely to be higher after April, we believe there is a risk of more hawkish rhetoric at meetings in June and beyond, including a change in policy stance," wrote Sonal Varma, chief India economist at Nomura.

The latest consensus is for the RBI to hike the repo rate and the reverse repo rate by 25 basis points in the first three months of 2019 and follow it up with another one in the quarter through to end-December.

Just last month, the consensus was for the central bank to hold fire until at least the second half of 2019.

"The forecast for inflation suggests that after a temporary decline, which we have already seen, inflation will move slightly higher and this will force a hike," said Dariusz Kowalczyk, senior economist for ex-Japan Asia at Credit Agricole CIB.

After hitting a low of 1.46 per cent in June 2017, consumer price inflation steadily rose to a 17-month high in December. However, February's inflation print showed inflation at 4.4 per cent, giving the RBI a breather.

According to the central bank's own projections, inflation is likely to average 5.1-5.6 per cent for the first half of the 2018-19 fiscal year, before hovering around 4.5 per cent for the remainder of the year.

While the median consensus of economists predicts a rate hike early next year, almost a third of respondents forecast the RBI will lift rates by the end of September.

Several of them also expect another rate hike before end-2018.

Against a backdrop of government fiscal slippage, the RBI would focus on "price stability", higher bond yields and sticky inflation near the upper band of its target, according to Vishnu Varathan, head of economics and strategy at Mizuho Bank.

"The fact that evidence of underlying inflation is picking up...should tilt them towards one rate hike to calibrate policy," Mizuho's Varathan said.

"The growth story is also going to align nicely with the RBI's position because we are coming off a soft base after the demonetization and GST impact ... the policy decision becomes less of a dilemma and the clarity with which they need to act solidifies in the second half of this year."

If the RBI does raise rates when expected, it would follow other major central banks which are already tightening policy.

The US Federal Reserve raised rates in March and is expected to follow it up with three more hikes this year, according to a separate Reuters poll.

The RBI is expected to keep rates steady for the rest of this year

The Reserve Bank of India will keep monetary policy steady at its April meeting but shift to a hawkish stance by the end of this year and raise interest rates early in 2019 as inflation pressures build, according to a Reuters poll of economists. All 61 economists polled between March 23-28 expected the RBI to hold the repo rate at 6.00 percent and the reverse repo rate at 5.75 per cent at its April 4-5 policy meeting. The RBI is expected to keep rates steady for the rest of this year. After a slowdown in growth through much of last year, India is on an upswing and reclaimed top spot as the fastest growing major economy in the final quarter of 2017, outpacing China. Inflation, on the other hand, has eased slightly, but still projected by the central bank to remain above its 4 per cent medium-term target in 2018. "The recent strength of the economy has belatedly shifted the discussion from whether the RBI might cut policy rates again to whether it should hike," noted Shilan Shah, senior India economist at Capital Economics. The RBI is expected to change its stance toward policy tightening by year-end, according to 60 per cent of 33 economists, including four respondents who thought the shift would come as early as its June meeting. "With growth-inflation data likely to be higher after April, we believe there is a risk of more hawkish rhetoric at meetings in June and beyond, including a change in policy stance," wrote Sonal Varma, chief India economist at Nomura. The latest consensus is for the RBI to hike the repo rate and the reverse repo rate by 25 basis points in the first three months of 2019 and follow it up with another one in the quarter through to end-December. Just last month, the consensus was for the central bank to hold fire until at least the second half of 2019. "The forecast for inflation suggests that after a temporary decline, which we have already seen, inflation will move slightly higher and this will force a hike," said Dariusz Kowalczyk, senior economist for ex-Japan Asia at Credit Agricole CIB. After hitting a low of 1.46 per cent in June 2017, consumer price inflation steadily rose to a 17-month high in December. However, February's inflation print showed inflation at 4.4 per cent, giving the RBI a breather. According to the central bank's own projections, inflation is likely to average 5.1-5.6 per cent for the first half of the 2018-19 fiscal year, before hovering around 4.5 per cent for the remainder of the year. While the median consensus of economists predicts a rate hike early next year, almost a third of respondents forecast the RBI will lift rates by the end of September. Several of them also expect another rate hike before end-2018. Against a backdrop of government fiscal slippage, the RBI would focus on "price stability", higher bond yields and sticky inflation near the upper band of its target, according to Vishnu Varathan, head of economics and strategy at Mizuho Bank. "The fact that evidence of underlying inflation is picking up...should tilt them towards one rate hike to calibrate policy," Mizuho's Varathan said. "The growth story is also going to align nicely with the RBI's position because we are coming off a soft base after the demonetization and GST impact ... the policy decision becomes less of a dilemma and the clarity with which they need to act solidifies in the second half of this year." If the RBI does raise rates when expected, it would follow other major central banks which are already tightening policy. The US Federal Reserve raised rates in March and is expected to follow it up with three more hikes this year, according to a separate Reuters poll.

RBI to take hawkish stance by end-2018, hike rates early next year: Reports

The Reserve Bank of India has imposed a monetary penalty on ICICI Bank Ltd for flouting rules related to the sale of securities.

The regulator said that a monetary penalty of Rs 58.9 crore has been imposed on the lender.&nbsp

The penalty has been imposed due to non-compliance with rules related to the sale of securities held in the bank’s Held To Maturity (HTM) portfolio.&nbsp

The RBI did not specify what rules had been flouted.

"This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers," the RBI said.

As per the RBI’s rules, securities acquired by the banks with the intention to hold them up to maturity are classified under the HTM bucket. The RBI prescribes limits upto which banks can transfer and sell securities held under this category.

The RBI prescribes limits upto which banks can transfer and sell securities held under this category.

The Reserve Bank of India has imposed a monetary penalty on ICICI Bank Ltd for flouting rules related to the sale of securities. The regulator said that a monetary penalty of Rs 58.9 crore has been imposed on the lender. The penalty has been imposed due to non-compliance with rules related to the sale of securities held in the bank’s Held To Maturity (HTM) portfolio. The RBI did not specify what rules had been flouted. "This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers," the RBI said. As per the RBI’s rules, securities acquired by the banks with the intention to hold them up to maturity are classified under the HTM bucket. The RBI prescribes limits upto which banks can transfer and sell securities held under this category.

RBI imposes Rs 58.9 crore penalty on ICICI Bank

Just when many Indian banks thought the worst of their bad debt woes were behind them, new central bank rules are stoking fears that the worst of the soured-loans buildup is yet to come.

The central bank surprised the financial sector this week by halting all of its existing loan-restructuring mechanisms with immediate effect, and rolling out new rules that will push more debt defaulters into bankruptcy courts.

To force its point home, the Reserve Bank of India (RBI) set strict timelines for lenders to take action against defaulters, threatening penalties if banks failed to act in a timely manner.

<div class="ui-state-default" contenteditable="false">
<div class="row">
<div class="article-blockquote">
<div class="col-sm-10 col-sm-offset-1 blockquote-content quoteshare">
<blockquote>
<h5>India&#39;s bad loans have nearly doubled in the past four years following an economic slow down and years of profligate lending &mdash; the combination has choked new lending and dragged on the economy</h5>
</blockquote>
</div>

<div class="col-sm-1 blockquote-content">
<div class="share-blockquote"><a class="twitter popup" href="http://twitter.com/intent/tweet?text=India's bad loans have nearly doubled in the past four years following an economic slow down and years of profligate lending — the combination has choked new lending and dragged on the economy" target="_blank">&nbsp;</a></div>
</div>
<a class="close-mark close-div" href="#" id="jqquoteclosemark">&times;</a></div>
</div>
</div>

Soured loans, which include non-performing, restructured or rolled-over loans, reached a record high of 9.5 trillion rupees ($148 billion) in the middle of last year before dipping slightly and prompting some relief among bankers that the worst was over. State-run lenders account for the bulk of these loans.

India&#39;s bad loans have nearly doubled in the past four years following an economic slow down and years of profligate lending - the combination has choked new lending and dragged on the economy.

Analysts say the actual level of bad loans is higher than the official figures suggest, pointing to central bank audits of banks, including State Bank of India, that showed non-performing loans were higher than reported for the financial year ended March 2017. Banks have also been blamed for perpetually renewing loans on soured assets.

Most of the loan-restructuring schemes that the central bank is withdrawing have seen little success. Analysts say banks will soon have to declare the loans in those schemes as non-performing loans, which will trigger the timeline for banks to take debtors to court.

That means the banking sector will have to recognise the new status of the loans and make provisions for them, said Rajkiran Rai, chief executive at state-run Union Bank of India.

&quot;When you look at the short term, yes, we will have issues with the existing accounts,&quot; Rai said.

Longer term, the RBI&#39;s measure will benefit banks, he said.

Indeed, the new rules would bring discipline to the banking sector, although provisioning costs will shoot up as more borrowers are taken to court, said R. Subramaniakumar, chief executive at Indian Overseas Bank, a state-run lender with the second-highest bad loan ratio among all banks.

&quot;Of course it&#39;s going to put pressure on bank&#39;s balance sheets,&quot; he said, adding capital injections announced by the government will help cushion the impact.

The RBI&#39;s decision to force more struggling borrowers into bankruptcy proceedings was its latest move to try to clean up India&#39;s bad loans mess.

Last year, it ordered about 40 of the country&#39;s largest debt defaulters into bankruptcy courts, demanding creditors put aside at least 50 percent of loan amounts in provisioning.

Under the new process, the RBI requires banks to figure out plans to resolve debts of defaulters with 20 billion rupees ($311 million) or more in outstanding debt by Sept. 1, or take them to bankruptcy court.

Since 50 percent provisioning will be required for these bankruptcy cases as well, the total funds that banks will have to set aside will shoot up, pressuring profits, analysts said.

Moody&#39;s Indian affiliate ICRA estimates the criteria would net 50 defaulting companies with combined outstanding debt of 2.46 trillion rupees ($38 billion), so banks&#39; credit provisions will spike.

India Ratings and Research, the local affiliate of Fitch, said banks&#39; non-performing loans and provisions will shoot up in coming months, said analyst Udit Kariwala.

Rajeev Kumar, the top government bureaucrat overseeing the banking sector, said the new rules will impact 2-3 percent of banks&#39; loan books, while provisions could rise a &quot;little&quot;, financial news service NewsRise reported.

Bank shares slid on Wednesday, with the sector index falling 1.4 percent compared with a 0.4 percent fall in the broader market.

New RBI rules are stoking the banks' fears that the worst of the soured-loans buildup is yet to come

Just when many Indian banks thought the worst of their bad debt woes were behind them, new central bank rules are stoking fears that the worst of the soured-loans buildup is yet to come. The central bank surprised the financial sector this week by halting all of its existing loan-restructuring mechanisms with immediate effect, and rolling out new rules that will push more debt defaulters into bankruptcy courts. To force its point home, the Reserve Bank of India (RBI) set strict timelines for lenders to take action against defaulters, threatening penalties if banks failed to act in a timely manner. India's bad loans have nearly doubled in the past four years following an economic slow down and years of profligate lending — the combination has choked new lending and dragged on the economy × Soured loans, which include non-performing, restructured or rolled-over loans, reached a record high of 9.5 trillion rupees ($148 billion) in the middle of last year before dipping slightly and prompting some relief among bankers that the worst was over. State-run lenders account for the bulk of these loans. India's bad loans have nearly doubled in the past four years following an economic slow down and years of profligate lending - the combination has choked new lending and dragged on the economy. Analysts say the actual level of bad loans is higher than the official figures suggest, pointing to central bank audits of banks, including State Bank of India, that showed non-performing loans were higher than reported for the financial year ended March 2017. Banks have also been blamed for perpetually renewing loans on soured assets. Most of the loan-restructuring schemes that the central bank is withdrawing have seen little success. Analysts say banks will soon have to declare the loans in those schemes as non-performing loans, which will trigger the timeline for banks to take debtors to court. That means the banking sector will have to recognise the new status of the loans and make provisions for them, said Rajkiran Rai, chief executive at state-run Union Bank of India. "When you look at the short term, yes, we will have issues with the existing accounts," Rai said. Longer term, the RBI's measure will benefit banks, he said. Indeed, the new rules would bring discipline to the banking sector, although provisioning costs will shoot up as more borrowers are taken to court, said R. Subramaniakumar, chief executive at Indian Overseas Bank, a state-run lender with the second-highest bad loan ratio among all banks. "Of course it's going to put pressure on bank's balance sheets," he said, adding capital injections announced by the government will help cushion the impact. The RBI's decision to force more struggling borrowers into bankruptcy proceedings was its latest move to try to clean up India's bad loans mess. Last year, it ordered about 40 of the country's largest debt defaulters into bankruptcy courts, demanding creditors put aside at least 50 percent of loan amounts in provisioning. Under the new process, the RBI requires banks to figure out plans to resolve debts of defaulters with 20 billion rupees ($311 million) or more in outstanding debt by Sept. 1, or take them to bankruptcy court. Since 50 percent provisioning will be required for these bankruptcy cases as well, the total funds that banks will have to set aside will shoot up, pressuring profits, analysts said. Moody's Indian affiliate ICRA estimates the criteria would net 50 defaulting companies with combined outstanding debt of 2.46 trillion rupees ($38 billion), so banks' credit provisions will spike. India Ratings and Research, the local affiliate of Fitch, said banks' non-performing loans and provisions will shoot up in coming months, said analyst Udit Kariwala. Rajeev Kumar, the top government bureaucrat overseeing the banking sector, said the new rules will impact 2-3 percent of banks' loan books, while provisions could rise a "little", financial news service NewsRise reported. Bank shares slid on Wednesday, with the sector index falling 1.4 percent compared with a 0.4 percent fall in the broader market.

For India's banks, worst of their bad-loan troubles may be still to come

The Reserve Bank of India on Tuesday came out with a revised framework for expeditious resolution of bad loans, harmonising the existing guidelines with the norms specified in the Insolvency and Bankruptcy Code (IBC).

The new guidelines have specified framework for early identification and reporting of stressed assets.

&quot;In view of the enactment of the Insolvency and Bankruptcy Code (IBC), 2016, it has been decided to substitute the existing guidelines with a harmonised and simplified generic framework for resolution of stressed assets,&quot; the RBI said in a notification issued late in the evening.

Among other things, the RBI has decided to do away with the Joint Lenders&#39; Forum (JLF) as an institutional mechanism for resolution of stressed accounts also stands discontinued.

The notification further said all accounts, including those where any of the schemes have been invoked but not yet implemented, will be governed by the revised framework.

As per the revised guidelines, the banks will be required to identify incipient stress in loan accounts, immediately on default, by classifying stressed assets as special mention accounts (SMA) depending upon the period of default.

All lenders will be required to put in place Board- approved policies for resolution of stressed assets under this framework, including the timelines for resolution, it said, adding, &quot;As soon as there is a default in the borrower entity&#39;s account with any lender, all lenders - singly or jointly - shall initiate steps to cure the default.&quot;

The resolution plan (RP) may involve any actions/plans/ reorganisation including, but not limited to, regularisation of the account by payment of all over dues by the borrower entity, sale of the exposures to other entities / investors, change in ownership, or restructuring.

The revised framework has also laid down the timelines for resolution of stressed assets.

If a resolution plan in respect of large accounts is not implemented as per the timelines specified, lenders will be required to file insolvency application, singly or jointly, under the IBC, 2016, within 15 days from the expiry of the specified timeline.

It further said all lenders will be required to submit Central Repository of Information on Large Credits (CRILC)- Main Report to the Reserve Bank on a monthly basis effective April 1, 2018.

In addition, the lenders shall report to CRILC, all borrower entities in default (with aggregate exposure of Rs 5 crore and above), on a weekly basis, at the close of business on every Friday, or the preceding working day if Friday happens to be a holiday.

The first such weekly report shall be submitted for the week ending February 23, 2018, with a view to harmonise the guidelines with the norms specified in the IBC, said the notification while withdrawing existing mechanism for dealing with the bad debt in the banking system.

The new guidelines have specified framework for early identification and reporting of stressed assets.

The Reserve Bank of India on Tuesday came out with a revised framework for expeditious resolution of bad loans, harmonising the existing guidelines with the norms specified in the Insolvency and Bankruptcy Code (IBC)

The Reserve Bank of India on Tuesday came out with a revised framework for expeditious resolution of bad loans, harmonising the existing guidelines with the norms specified in the Insolvency and Bankruptcy Code (IBC). The new guidelines have specified framework for early identification and reporting of stressed assets. "In view of the enactment of the Insolvency and Bankruptcy Code (IBC), 2016, it has been decided to substitute the existing guidelines with a harmonised and simplified generic framework for resolution of stressed assets," the RBI said in a notification issued late in the evening. Among other things, the RBI has decided to do away with the Joint Lenders' Forum (JLF) as an institutional mechanism for resolution of stressed accounts also stands discontinued. The notification further said all accounts, including those where any of the schemes have been invoked but not yet implemented, will be governed by the revised framework. As per the revised guidelines, the banks will be required to identify incipient stress in loan accounts, immediately on default, by classifying stressed assets as special mention accounts (SMA) depending upon the period of default. All lenders will be required to put in place Board- approved policies for resolution of stressed assets under this framework, including the timelines for resolution, it said, adding, "As soon as there is a default in the borrower entity's account with any lender, all lenders - singly or jointly - shall initiate steps to cure the default." The resolution plan (RP) may involve any actions/plans/ reorganisation including, but not limited to, regularisation of the account by payment of all over dues by the borrower entity, sale of the exposures to other entities / investors, change in ownership, or restructuring. The revised framework has also laid down the timelines for resolution of stressed assets. If a resolution plan in respect of large accounts is not implemented as per the timelines specified, lenders will be required to file insolvency application, singly or jointly, under the IBC, 2016, within 15 days from the expiry of the specified timeline. It further said all lenders will be required to submit Central Repository of Information on Large Credits (CRILC)- Main Report to the Reserve Bank on a monthly basis effective April 1, 2018. In addition, the lenders shall report to CRILC, all borrower entities in default (with aggregate exposure of Rs 5 crore and above), on a weekly basis, at the close of business on every Friday, or the preceding working day if Friday happens to be a holiday. The first such weekly report shall be submitted for the week ending February 23, 2018, with a view to harmonise the guidelines with the norms specified in the IBC, said the notification while withdrawing existing mechanism for dealing with the bad debt in the banking system. The new guidelines have specified framework for early identification and reporting of stressed assets.

RBI notifies revised framework to deal with bad loans

The Reserve Bank of India has decided to keep the repo rate and the reverse repo rate unchanged at 6 per cent and 5.75 per cent respectively for a third straight policy meeting.&nbsp;

The RBI retained its &quot;neutral&quot; stance on the interest rates with an aim to support economic growth even as inflation accelerated to a 17-month high.

Repo rate is the rate at which the RBI lends out finances to the banking sector while the reverse repo rate is the opposite of the same.&nbsp;

According to experts, a hike in the interest rates would have translated into an increase in inflation and escalating crude oil prices.&nbsp;

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet" data-lang="en">
WATCH: RBI Governor Urjit Patel addresses the media in Mumbai <a href="https://t.co/BRq38Fyypb">https://t.co/BRq38Fyypb</a>
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/961166557635211264?ref_src=twsrc%5Etfw">February 7, 2018</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">&times;</a></div>

The Monetary Policy Committee (MPC) of the Reserve Bank of India had kept the interest rate unchanged in December over looming concerns of price rise.&nbsp;

RBI Governor Urjit Patel chaired the Monetary Policy Committee meeting today at 2.30pm.

&ldquo;The decision of the MPC is consistent with the neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2% while supporting growth,&rdquo; RBI noted.

&quot;The policy decision is in line with our expectation along with the hawkishness that is built into the statement. While we retain status quo from RBI for FY19, a risk to our call may come from higher inflation,&quot; shared Aditi Nayar, Principal Economist, ICRA Ltd in Gurgaon.&nbsp;

&quot;Despite the upward revision in the inflation forecast and concerns highlighted regarding growing inflation risks amid the crystallization of the fiscal slippage, the tone of the policy was not as hawkish as expected, given the comment that the nascent recovery needs to be carefully nurtured,&quot; Radhika Rao, Group Economist, DBS, Singapore told Reuters.&nbsp;

Ahead of the RBI&#39;s announcement, the Indian rupee traded down 11 paise against the US dollar at 64.14.&nbsp;

RBI Governor Urjit Patel chaired the Monetary Policy Committee meeting today at 2.30pm

The Reserve Bank of India has decided to keep the repo rate and the reverse repo rate unchanged at 6 per cent and 5.75 per cent respectively for a third straight policy meeting. The RBI retained its "neutral" stance on the interest rates with an aim to support economic growth even as inflation accelerated to a 17-month high. Repo rate is the rate at which the RBI lends out finances to the banking sector while the reverse repo rate is the opposite of the same. According to experts, a hike in the interest rates would have translated into an increase in inflation and escalating crude oil prices. WATCH: RBI Governor Urjit Patel addresses the media in Mumbai https://t.co/BRq38Fyypb — ANI (@ANI) February 7, 2018 × The Monetary Policy Committee (MPC) of the Reserve Bank of India had kept the interest rate unchanged in December over looming concerns of price rise. RBI Governor Urjit Patel chaired the Monetary Policy Committee meeting today at 2.30pm. “The decision of the MPC is consistent with the neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2% while supporting growth,” RBI noted. "The policy decision is in line with our expectation along with the hawkishness that is built into the statement. While we retain status quo from RBI for FY19, a risk to our call may come from higher inflation," shared Aditi Nayar, Principal Economist, ICRA Ltd in Gurgaon. "Despite the upward revision in the inflation forecast and concerns highlighted regarding growing inflation risks amid the crystallization of the fiscal slippage, the tone of the policy was not as hawkish as expected, given the comment that the nascent recovery needs to be carefully nurtured," Radhika Rao, Group Economist, DBS, Singapore told Reuters. Ahead of the RBI's announcement, the Indian rupee traded down 11 paise against the US dollar at 64.14.

RBI leaves repo rate, reverse repo rate unchanged at 6 & 5.75%

The Reserve Bank of India, meeting amid a global market storm, is widely expected to keep its key rate on hold on Wednesday, but toughen its rhetoric as inflation has accelerated sharply, making an increasing number of analysts see a hike this year. 
 
A Reuters poll showed 58 of 60 economists expect the repo rate to be kept at 6.00 per cent, the lowest since November 2010, and the reverse repo rate at 5.75 per cent. The other two predicted a 25 basis points hike. 
 
But more analysts now believe tightening looms down the road after surging oil and food prices led consumer inflation in the country to a 17-month high of 5.21 per cent in December - well above the RBI&#39;s 4 per cent target. 
 
Inflation is expected to accelerate after the government&#39;s budget last week widened its fiscal deficit target for the fiscal year starting in April to help finance a sharp increase in spending in the rural areas and on healthcare. 
 
Bond investors are already pricing in rate hikes, with benchmark 10-year bond yields rising over 80 basis points since July, the biggest move since the 2013 rupee crisis. 
 
The Reuters poll showed 14 out of 35 analysts believe the RBI will hike rates by the end of 2018, up from 7 out of 27 in December.

New inflation risks?

But questions remain about how soon the RBI can tighten, given the economy is expected to grow only 6.7 per cent in the current fiscal year - the slowest pace in about three years.

The RBI&#39;s policy stance is currently &quot;neutral&quot;.

&quot;New inflation risks are emerging post-budget, so it will have to sound hawkish - but not overly so,&quot; BNP Paribas told clients on Tuesday, adding it expects two 25-bps rate hikes in 2018&#39;s second half.

The RBI has held the repo at 6.0 per cent since a 25 bps cut in August, having taken advantage of a period of extraordinary low inflation to cut rates by 200 bps since early 2015.

For sure, a rate hike in 2018 is far from certain, as the RBI has to be careful not to slow an economy that needs rapid growth to create jobs. The RBI will also be mindful of the global economy, in case of a sharp downturn that impacts India.

Although any move to raise rates could make yields more attractive overseas, it could also undermine confidence in the economy, adding more uncertainty to monetary policy.

Inflation is expected to accelerate after the government’s budget last week widened its fiscal deficit target for the fiscal year starting in April to help finance a sharp increase in spending in the rural areas and on healthcare

The Reserve Bank of India, meeting amid a global market storm, is widely expected to keep its key rate on hold on Wednesday, but toughen its rhetoric as inflation has accelerated sharply, making an increasing number of analysts see a hike this year. A Reuters poll showed 58 of 60 economists expect the repo rate to be kept at 6.00 per cent, the lowest since November 2010, and the reverse repo rate at 5.75 per cent. The other two predicted a 25 basis points hike. But more analysts now believe tightening looms down the road after surging oil and food prices led consumer inflation in the country to a 17-month high of 5.21 per cent in December - well above the RBI's 4 per cent target. Inflation is expected to accelerate after the government's budget last week widened its fiscal deficit target for the fiscal year starting in April to help finance a sharp increase in spending in the rural areas and on healthcare. Bond investors are already pricing in rate hikes, with benchmark 10-year bond yields rising over 80 basis points since July, the biggest move since the 2013 rupee crisis. The Reuters poll showed 14 out of 35 analysts believe the RBI will hike rates by the end of 2018, up from 7 out of 27 in December. New inflation risks? But questions remain about how soon the RBI can tighten, given the economy is expected to grow only 6.7 per cent in the current fiscal year - the slowest pace in about three years. The RBI's policy stance is currently "neutral". "New inflation risks are emerging post-budget, so it will have to sound hawkish - but not overly so," BNP Paribas told clients on Tuesday, adding it expects two 25-bps rate hikes in 2018's second half. The RBI has held the repo at 6.0 per cent since a 25 bps cut in August, having taken advantage of a period of extraordinary low inflation to cut rates by 200 bps since early 2015. For sure, a rate hike in 2018 is far from certain, as the RBI has to be careful not to slow an economy that needs rapid growth to create jobs. The RBI will also be mindful of the global economy, in case of a sharp downturn that impacts India. Although any move to raise rates could make yields more attractive overseas, it could also undermine confidence in the economy, adding more uncertainty to monetary policy.

RBI expected to keep rates on hold in policy decision

The Reserve Bank of India reiterated Wednesday that the Rs 10 coins it has issued of various designs are legal tender.&nbsp;

The RBI has so far issued Rs 10 coins in 14 designs.&nbsp;

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet" data-lang="en">
<a href="https://twitter.com/hashtag/FLASH?src=hash&amp;ref_src=twsrc%5Etfw">#FLASH</a> Reserve Bank of India (RBI) reiterates legal tender status of Rupees 10 coins of different designs
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/953551839798030337?ref_src=twsrc%5Etfw">January 17, 2018</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">&times;</a></div>

&quot;So far, the Reserve Bank has issued Rs 10 coins in 14 designs and public has been informed of their distinctive features. All these coins are legal tender and can be accepted for transactions,&quot; the RBI said.&nbsp;

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet" data-lang="en">
So far, the Reserve Bank has issued Rs 10 coins in 14 designs &amp; public has been informed of their distinctive features. All these coins are legal tender and can be accepted for transactions: Reserve Bank of India (RBI)
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/953552659675463680?ref_src=twsrc%5Etfw">January 17, 2018</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">&times;</a></div>

There had been reports earlier of people refusing to accept the new coins, because of rumours that they were not legal tender.&nbsp;

Shopkeepers, vendors,&nbsp;bus conductors, and even railway counters have reportedly rejected some of the 10-rupee coins saying that only the coins with the rupee symbol on them are legal tender. (As have panhandlers.)&nbsp;

There had also been reports of people going to their banks&nbsp;to exchange the coins in return for notes.&nbsp;

The issue reportedly started with Prime Minister Narendra Modi announcing his demonetisation in November 2016.

The Reserve Bank of India has so far issued 10-rupee coins in 14 different designs

The Reserve Bank of India reiterated Wednesday that the Rs 10 coins it has issued of various designs are legal tender. The RBI has so far issued Rs 10 coins in 14 designs. #FLASH Reserve Bank of India (RBI) reiterates legal tender status of Rupees 10 coins of different designs — ANI (@ANI) January 17, 2018 × "So far, the Reserve Bank has issued Rs 10 coins in 14 designs and public has been informed of their distinctive features. All these coins are legal tender and can be accepted for transactions," the RBI said. So far, the Reserve Bank has issued Rs 10 coins in 14 designs & public has been informed of their distinctive features. All these coins are legal tender and can be accepted for transactions: Reserve Bank of India (RBI) — ANI (@ANI) January 17, 2018 × There had been reports earlier of people refusing to accept the new coins, because of rumours that they were not legal tender. Shopkeepers, vendors, bus conductors, and even railway counters have reportedly rejected some of the 10-rupee coins saying that only the coins with the rupee symbol on them are legal tender. (As have panhandlers.) There had also been reports of people going to their banks to exchange the coins in return for notes. The issue reportedly started with Prime Minister Narendra Modi announcing his demonetisation in November 2016.

All designs of Rs 10 coin are legal tender, RBI reiterates

The Reserve Bank of India on Friday introduced a new Rs 10 banknote in a new series and chocolate brown colour.

The new banknote will bear the signature of RBI Governor Urjit Patel and will have motif of Sun Temple, Konark on the reverse, depicting the country&#39;s cultural heritage, the central bank said in a statement. The dimension of the banknote will be 63 mm x 123 mm.

RBI also clarified that all the banknotes in the Rs 10 banknotes issued in earlier series will continue to be legal tender.

Here are the salient features of the new banknote:

On the front side, the note will have:

<ul>
	<li>See through register with denominational numeral 10</li>
	<li>Denominational numeral ?? in Devnagari</li>
	<li>Portrait of Mahatma Gandhi at the centre</li>
	<li>Micro letters &#39;RBI&#39;, &lsquo;???? &#39;, &lsquo;INDIA&#39; and &#39;10&#39;</li>
	<li>Windowed demetalised security thread with inscriptions &lsquo;????&rsquo; and RBI</li>
	<li>Guarantee Clause, Governor&#39;s signature with Promise Clause and RBI emblem towards right of Mahatma Gandhi portrait</li>
	<li>Ashoka Pillar emblem on the right</li>
	<li>Mahatma Gandhi portrait and electrotype (10) watermarks</li>
	<li>Number panel with numerals growing from small to big on the top left side and bottom right side</li>
</ul>

The reverse (back) side will have:

<ul>
	<li>Year of printing of the note on the left</li>
	<li>Swachh Bharat logo with slogan</li>
	<li>Language panel</li>
	<li>Motif of Sun Temple, Konark</li>
	<li>Denominational numeral ?? in Devnagari</li>
</ul>

RBI also clarified that all the banknotes in the Rs 10 banknotes issued in earlier series will continue to be legal tender.

The Reserve Bank of India on Friday introduced a new Rs 10 banknote in a new series and chocolate brown colour. The new banknote will bear the signature of RBI Governor Urjit Patel and will have motif of Sun Temple, Konark on the reverse, depicting the country's cultural heritage, the central bank said in a statement. The dimension of the banknote will be 63 mm x 123 mm. RBI also clarified that all the banknotes in the Rs 10 banknotes issued in earlier series will continue to be legal tender. Here are the salient features of the new banknote: On the front side, the note will have: See through register with denominational numeral 10 Denominational numeral ?? in Devnagari Portrait of Mahatma Gandhi at the centre Micro letters 'RBI', ‘???? ', ‘INDIA' and '10' Windowed demetalised security thread with inscriptions ‘????’ and RBI Guarantee Clause, Governor's signature with Promise Clause and RBI emblem towards right of Mahatma Gandhi portrait Ashoka Pillar emblem on the right Mahatma Gandhi portrait and electrotype (10) watermarks Number panel with numerals growing from small to big on the top left side and bottom right side The reverse (back) side will have: Year of printing of the note on the left Swachh Bharat logo with slogan Language panel Motif of Sun Temple, Konark Denominational numeral ?? in Devnagari

All you need to know about new Rs 10 note introduced by RBI

<a href="http://www.wionews.com/business-economy/indias-gdp-growth-to-slow-to-four-year-low-of-65-in-2017-18-28649" target="_blank">India&#39;s GDP growth to slow to four-year low of 6.5% in 2017-18</a>

The economic growth is expected to slow to a four-year low of 6.5 per cent in 2017-18, the lowest under the Modi-led government, mainly due to poor performance of agriculture and manufacturing sectors.

<a href="http://www.wionews.com/india-news/all-you-need-to-know-about-new-rs-10-note-introduced-by-rbi-28641" target="_blank">All you need to know about new Rs 10 note introduced by RBI</a>

The Reserve Bank of India on Friday introduced a new Rs 10 banknote in a new series and chocolate brown colour.

<a href="http://www.wionews.com/world/entertainment-hbo-confirms-for-first-time-game-of-thrones-to-return-in-2019-28632" target="_blank">HBO confirms for first time, &#39;Game of Thrones&#39; to return in 2019</a>

Putting speculations to rest, HBO now confirms that fan rumours were true -- the final season of &quot;Game of Thrones&quot;&nbsp;won&#39;t be back until 2019.&nbsp;

<a href="http://www.wionews.com/business-economy/disinvestment-on-cards-tata-group-and-singapore-airlines-ready-to-bid-for-air-india-28637" target="_blank">Disinvestment on cards, Tata group and Singapore Airlines ready to bid for Air India</a>

Just days after aviation minister Raju said the government does not want Air India to &quot;go the Kingfisher way&quot;, Vistara&#39;s CEO Leslie Thng said today that Tata Group and Singapore Airlines are &quot;open to bid&quot; for Air India.

<a href="http://www.wionews.com/business-economy/budget-likely-to-announce-several-features-to-strengthen-womens-safety-in-railways-28627" target="_blank">Budget likely to announce several features to strengthen women&#39;s safety in Railways</a>

The Union Budget&nbsp;<a href="http://www.wionews.com/india-news/union-budget-to-be-presented-on-february-1-28623">set to be announced on February 1</a>&nbsp;is set to include special measures to strengthen women&#39;s safety. The Railway Ministry is likely to announce 2018 as &quot;Railway Women&#39;s Safety Year&quot;.

&nbsp;

&nbsp;

&nbsp;

&nbsp;

&nbsp;

India's GDP growth to slow to four-year low of 6.5% in 2017-18 The economic growth is expected to slow to a four-year low of 6.5 per cent in 2017-18, the lowest under the Modi-led government, mainly due to poor performance of agriculture and manufacturing sectors. All you need to know about new Rs 10 note introduced by RBI The Reserve Bank of India on Friday introduced a new Rs 10 banknote in a new series and chocolate brown colour. HBO confirms for first time, 'Game of Thrones' to return in 2019 Putting speculations to rest, HBO now confirms that fan rumours were true -- the final season of "Game of Thrones" won't be back until 2019. Disinvestment on cards, Tata group and Singapore Airlines ready to bid for Air India Just days after aviation minister Raju said the government does not want Air India to "go the Kingfisher way", Vistara's CEO Leslie Thng said today that Tata Group and Singapore Airlines are "open to bid" for Air India. Budget likely to announce several features to strengthen women's safety in Railways The Union Budget set to be announced on February 1 is set to include special measures to strengthen women's safety. The Railway Ministry is likely to announce 2018 as "Railway Women's Safety Year".

WION Evening News brief, 5 January 2018

Allahabad Bank has said the Reserve Bank of India (RBI) has initiated &#39;prompt corrective action&#39; (PCA) against the state-run lender over its high bad loans.

High net non-performing assets (NPA) and a negative Return On Assets (ROA) for two years in a row has prompted the action, the bank said in a statement late on Wednesday, although it added the action would help improve its risk management, asset quality and profits.

The central bank has so far ordered corrective action for about 10 lenders, mostly due to their high bad loan ratios.

Depending on the risk thresholds set in the Reserve Bank of India corrective action rules, lenders can be asked by the regulator to restrict branch expansion and make higher provisions on sour loans, among other curbs.

Allahabad Bank shares fell as much as 2.6 per cent in Thursday morning trade in a Mumbai market that was trading 0.1 per cent higher.

The central bank has so far ordered corrective action for about 10 lenders, mostly due to their high bad loan ratios.

Allahabad Bank has said the Reserve Bank of India (RBI) has initiated 'prompt corrective action' (PCA) against the state-run lender over its high bad loans. High net non-performing assets (NPA) and a negative Return On Assets (ROA) for two years in a row has prompted the action, the bank said in a statement late on Wednesday, although it added the action would help improve its risk management, asset quality and profits. The central bank has so far ordered corrective action for about 10 lenders, mostly due to their high bad loan ratios. Depending on the risk thresholds set in the Reserve Bank of India corrective action rules, lenders can be asked by the regulator to restrict branch expansion and make higher provisions on sour loans, among other curbs. Allahabad Bank shares fell as much as 2.6 per cent in Thursday morning trade in a Mumbai market that was trading 0.1 per cent higher.

RBI puts Allahabad Bank under prompt corrective action

Amid reports of the rising presence of bitcoins and other forms of virtual currencies (VCs) in India, Union Finance Minister Arun Jaitley on Tuesday reiterated that the former are not accepted as a lawful and legal tender in India.

&quot;Since December 24, 2013, the government and the Reserve Bank of India (RBI) have maintained the same stand on bitcoins and other forms of virtual currencies. Through multiple notifications, the two parties have notified the public time and again that bitcoins will not be considered lawful or legal tender in India,&quot; Jaitley said while responding to a question raised in the Rajya Sabha earlier today.

Further, Jaitley stated that an expert group was commissioned to look into the matter, adding that a report will be filed by them on the matter.

&quot;The government does not want to take any substantial steps before the report is filed. We will look into the report and then issue corrective measures after a thorough understanding of the situation. We will also take the global scenario into consideration. However, we have clearly stated that dealing with VCs is at one&#39;s own risk,&quot; he said.

When asked on measures taken to protect citizens from the dangers involved in cryptocurrencies and availability of data on the same, Jaitley noted that 11 exchanges have been identified in India, and reiterated that experts groups are looking into the same.

&quot;Bitcoins are not restricted to India; it is a problem world over. There are 785 VCs in operation worldwide presently. Cryptocurrency lacks dependence and function with anonymity within a virtual community. All operations are online. We have identified 11 exchanges dealing with VCs in India. We are awaiting the official report from experts,&quot; said Jaitley.

On a related note, the Ministry of Finance on Friday issued a statement cautioning investors regarding risks of dealing with cryptocurrencies.

Linking them to &#39;Ponzi schemes&#39;, the ministry argued that unlike others, virtual currencies have no intrinsic value and are not backed by any kind of assets. The price of Bitcoin and other VCs, therefore, is entirely based on speculation, which results in spurt and volatility in their prices.

Prior to this, the users, holders, and traders of VCs were cautioned three times, in December 2013, February 2017 and December, 2017, by the RBI about potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to by investing in Bitcoin and/ or other VCs.

For the unversed, Bitcoins are a part of a rising new genre of digital payments called &#39;cryptocurrencies&#39; that work on blockchain technology with no centralised administrator.

This virtual currency emerged in the aftermath of the financial crisis and allows people to bypass banks and traditional payment processes to pay for goods and services.

Arun Jaitley further stated that an expert group was commissioned to look into the matter, adding that a report will be filed by them on the matter

Amid reports of the rising presence of bitcoins and other forms of virtual currencies (VCs) in India, Union Finance Minister Arun Jaitley on Tuesday reiterated that the former are not accepted as a lawful and legal tender in India. "Since December 24, 2013, the government and the Reserve Bank of India (RBI) have maintained the same stand on bitcoins and other forms of virtual currencies. Through multiple notifications, the two parties have notified the public time and again that bitcoins will not be considered lawful or legal tender in India," Jaitley said while responding to a question raised in the Rajya Sabha earlier today. Further, Jaitley stated that an expert group was commissioned to look into the matter, adding that a report will be filed by them on the matter. "The government does not want to take any substantial steps before the report is filed. We will look into the report and then issue corrective measures after a thorough understanding of the situation. We will also take the global scenario into consideration. However, we have clearly stated that dealing with VCs is at one's own risk," he said. When asked on measures taken to protect citizens from the dangers involved in cryptocurrencies and availability of data on the same, Jaitley noted that 11 exchanges have been identified in India, and reiterated that experts groups are looking into the same. "Bitcoins are not restricted to India; it is a problem world over. There are 785 VCs in operation worldwide presently. Cryptocurrency lacks dependence and function with anonymity within a virtual community. All operations are online. We have identified 11 exchanges dealing with VCs in India. We are awaiting the official report from experts," said Jaitley. On a related note, the Ministry of Finance on Friday issued a statement cautioning investors regarding risks of dealing with cryptocurrencies. Linking them to 'Ponzi schemes', the ministry argued that unlike others, virtual currencies have no intrinsic value and are not backed by any kind of assets. The price of Bitcoin and other VCs, therefore, is entirely based on speculation, which results in spurt and volatility in their prices. Prior to this, the users, holders, and traders of VCs were cautioned three times, in December 2013, February 2017 and December, 2017, by the RBI about potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to by investing in Bitcoin and/ or other VCs. For the unversed, Bitcoins are a part of a rising new genre of digital payments called 'cryptocurrencies' that work on blockchain technology with no centralised administrator. This virtual currency emerged in the aftermath of the financial crisis and allows people to bypass banks and traditional payment processes to pay for goods and services.

Bitcoins not legal tender in India, reiterates Jaitley

The Finance Ministry today cautioned that virtual currencies are not legal tender and such currencies have no protection.

Noting that there has been a phenomenal increase in recent times in the price of virtual currencies (VCs) including Bitcoin, in India and globally, it said the VCs don&#39;t have any intrinsic value and are not backed by any kind of assets.

&quot;The price of Bitcoin and other VCs, therefore, is entirely a matter of mere speculation resulting in spurt and volatility in their prices,&quot; the Finance Ministry said in a statement.

There is a real and heightened risk of an investment bubble of the type seen in Ponzi schemes which can result in a sudden and prolonged crash exposing investors, especially retail consumers losing their hard-earned money, it said.

The statement further said that users, holders and traders of VCs have already been cautioned three times, by the Reserve Bank of India about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to by investing in Bitcoin and/ or other VCs.

The RBI has also clarified that it has not given any licence/ authorisation to any entity/ company to operate such schemes or deal with Bitcoin or any virtual currency, it said.

&quot;The government also makes it clear that VCs are not legal tender and such VCs do not have any regulatory permission or protection in India. The investors and other participants, therefore, deal with these VCs entirely at their risk and should best avoid participating therein,&quot; it said.

Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes, it said, adding VCs are stored in a digital/electronic format, making them vulnerable to hacking, loss of password, malware attack etc. which may also result in permanent loss of money.

As transactions of VCs are encrypted they are also likely being used to carry out illegal/subversive activities, such as terror-funding, smuggling, drug trafficking and other money-laundering Acts, it added.

&quot;VCs are not backed by government fiat. These are also not legal tender. Hence, VCs are not currencies. These are also being described as &#39;Coins&#39;,&quot; it said. 
There is, however, no physical attribute to these coins, it said.&nbsp;

The Finance Ministry said virtual currencies are not legal tender and that they have no protection

The Finance Ministry today cautioned that virtual currencies are not legal tender and such currencies have no protection. Noting that there has been a phenomenal increase in recent times in the price of virtual currencies (VCs) including Bitcoin, in India and globally, it said the VCs don't have any intrinsic value and are not backed by any kind of assets. "The price of Bitcoin and other VCs, therefore, is entirely a matter of mere speculation resulting in spurt and volatility in their prices," the Finance Ministry said in a statement. There is a real and heightened risk of an investment bubble of the type seen in Ponzi schemes which can result in a sudden and prolonged crash exposing investors, especially retail consumers losing their hard-earned money, it said. The statement further said that users, holders and traders of VCs have already been cautioned three times, by the Reserve Bank of India about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to by investing in Bitcoin and/ or other VCs. The RBI has also clarified that it has not given any licence/ authorisation to any entity/ company to operate such schemes or deal with Bitcoin or any virtual currency, it said. "The government also makes it clear that VCs are not legal tender and such VCs do not have any regulatory permission or protection in India. The investors and other participants, therefore, deal with these VCs entirely at their risk and should best avoid participating therein," it said. Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes, it said, adding VCs are stored in a digital/electronic format, making them vulnerable to hacking, loss of password, malware attack etc. which may also result in permanent loss of money. As transactions of VCs are encrypted they are also likely being used to carry out illegal/subversive activities, such as terror-funding, smuggling, drug trafficking and other money-laundering Acts, it added. "VCs are not backed by government fiat. These are also not legal tender. Hence, VCs are not currencies. These are also being described as 'Coins'," it said. There is, however, no physical attribute to these coins, it said.

Government warns against Bitcoin

The Bank of India&rsquo;s shares tumbled nearly 4 per cent to Rs 174.55 intraday on Wednesday after Reserve Bank of India put it under watch for bad loans. The move will put various restrictions on the lender, including on fresh loans and dividend distribution.&nbsp;

The bank&rsquo;s non-performing assets were reported over 6 per cent for two consecutive years

Earlier, a similar action was initiated against Dena Bank, IDBI Bank, Indian Overseas Bank and UCO Bank.&nbsp;

&nbsp;According to PCA framework, banks are assessed on three grounds&ndash; asset quality, profitability and capital ratios. Not meeting the requirements in any of these parameters could lead to RBI action on banks.

The actions could include stricter norms for lending, branch expansion, management change and asset reduction. The RBI has tightened the thresholds &mdash; for capital ratios, NPLs, profitability and leverage &ndash; at which banks enter the PCA framework.

The RBI has also given itself greater discretion in terms of the measures it can use to intervene in banks once they fall under the PCA framework, which suggests it has recognised a need to take corrective action at an earlier stage when banks run into difficulties. Rating agency Fitch said that the previous PCA, in contrast, explicitly reserved the most interventionist actions for banks that had breached more extreme thresholds.

The actions could include stricter norms for lending, branch expansion, management change and asset reduction.

The Bank of India’s shares tumbled nearly 4 per cent to Rs 174.55 intraday on Wednesday after Reserve Bank of India put it under watch for bad loans. The move will put various restrictions on the lender, including on fresh loans and dividend distribution. The bank’s non-performing assets were reported over 6 per cent for two consecutive years Earlier, a similar action was initiated against Dena Bank, IDBI Bank, Indian Overseas Bank and UCO Bank. According to PCA framework, banks are assessed on three grounds– asset quality, profitability and capital ratios. Not meeting the requirements in any of these parameters could lead to RBI action on banks. The actions could include stricter norms for lending, branch expansion, management change and asset reduction. The RBI has tightened the thresholds — for capital ratios, NPLs, profitability and leverage – at which banks enter the PCA framework. The RBI has also given itself greater discretion in terms of the measures it can use to intervene in banks once they fall under the PCA framework, which suggests it has recognised a need to take corrective action at an earlier stage when banks run into difficulties. Rating agency Fitch said that the previous PCA, in contrast, explicitly reserved the most interventionist actions for banks that had breached more extreme thresholds.

RBI puts Bank of India under watch as bad loans surge; shares tumble

The Income Tax Department on Wednesday conducted survey operations at major Bitcoin exchanges across the country on suspicion of alleged tax evasion, official sources said.

They said various teams of the sleuths of the department, under the command of the Bengaluru investigation wing, today visited the premises of nine such exchanges in the country including in Delhi, Bengaluru, Hyderabad, Kochi and Gurugram, since early morning.

The survey, under section 133A of the Income Tax Act, is being conducted for &quot;gathering evidence for establishing the identity of investors and traders, transaction undertaken by them, identity of counterparties, related bank accounts used, among others,&quot; they said.

The survey teams, sources said, are armed with various financial data and inputs about the working of these exchanges and this is the first big action against them in the country.

Bitcoin, a virtual currency, is not regulated in the country and its circulation has been a cause of concern among central bankers the world over for quite a while now.

The Reserve Bank of India has also cautioned users, holders and traders of virtual currencies, including bitcoins.

In March, the Union finance ministry had constituted an Inter-Disciplinary Committee to take stock of the present status of VCs both in India and globally and suggest measures for dealing with such currencies.

Bitcoin is not regulated in the country and its circulation has been a cause of concern

The Income Tax Department on Wednesday conducted survey operations at major Bitcoin exchanges across the country on suspicion of alleged tax evasion, official sources said. They said various teams of the sleuths of the department, under the command of the Bengaluru investigation wing, today visited the premises of nine such exchanges in the country including in Delhi, Bengaluru, Hyderabad, Kochi and Gurugram, since early morning. The survey, under section 133A of the Income Tax Act, is being conducted for "gathering evidence for establishing the identity of investors and traders, transaction undertaken by them, identity of counterparties, related bank accounts used, among others," they said. The survey teams, sources said, are armed with various financial data and inputs about the working of these exchanges and this is the first big action against them in the country. Bitcoin, a virtual currency, is not regulated in the country and its circulation has been a cause of concern among central bankers the world over for quite a while now. The Reserve Bank of India has also cautioned users, holders and traders of virtual currencies, including bitcoins. In March, the Union finance ministry had constituted an Inter-Disciplinary Committee to take stock of the present status of VCs both in India and globally and suggest measures for dealing with such currencies.

I-T dept conducts surveys at Bitcoin exchanges country-wide