Fuelled by soaring food prices, retail inflation climbed to a 15-month high of 4.88% in November.

It was at 3.58 % in October.

The figure is higher than the Reserve Bank of India&#39;s 4% medium-term target, reducing room for the central bank to change the repo rate -- the rate at which the central bank lends money to commercial banks -- in the near future.&nbsp;

Economists polled by Reuters had predicted consumer inflation would rise to 4.2 % in November, following unseasonably heavy rains which increased food prices.

Also read:&nbsp;<a href="http://www.wionews.com/business-economy/indias-economy-to-grow-at-72-in-2018-un-26543" target="_blank">India&#39;s economy to grow at 7.2% in 2018, says UN</a>

Industrial output growth meanwhile slowed to 2.2% in October from 3.8% in September, with demand continuing to suffer from the&nbsp;disruption caused by the rollout of the new Goods and Services Tax (GST). &nbsp;&nbsp;

At its December 6 policy meeting, the RBI raised its inflation projection by 10 basis points to between 4.3% to 4.7 % for the six months ending in March.

&nbsp;

The number is higher than the RBI's 4% medium-term target

Fuelled by soaring food prices, retail inflation climbed to a 15-month high of 4.88% in November. It was at 3.58 % in October. The figure is higher than the Reserve Bank of India's 4% medium-term target, reducing room for the central bank to change the repo rate -- the rate at which the central bank lends money to commercial banks -- in the near future. Economists polled by Reuters had predicted consumer inflation would rise to 4.2 % in November, following unseasonably heavy rains which increased food prices. Also read: India's economy to grow at 7.2% in 2018, says UN Industrial output growth meanwhile slowed to 2.2% in October from 3.8% in September, with demand continuing to suffer from the disruption caused by the rollout of the new Goods and Services Tax (GST). At its December 6 policy meeting, the RBI raised its inflation projection by 10 basis points to between 4.3% to 4.7 % for the six months ending in March.

Retail inflation hits 15-month high of 4.88% in November

State Bank of India will &ldquo;redesign&rdquo; its envelopes used to dispatch tax refund cheques of customers to cover their permanent account number (PAN) and contact numbers after an activist raised that the crucial personal information was visible to anyone which may result in misuse, the bank said.

The move comes nearly 16 months after activist Commodore (retd) Lokesh Batra raised the issue that the window envelopes used by SBI make it easy for someone to glance through PAN and contact number of the tax payee and misuse it.

Batra wrote to Reserve Bank of India (RBI) Governor Urjit Patel, alleging that SBI was violating its directions on &lsquo;protection of customer&rsquo;s information&rsquo; by sending crucial information about customers in &ldquo;unsecured envelopes&rdquo;.

&ldquo;This systemic failures by banks must be breaching the personal information of very large numbers of People. I had reported this matter at the highest level in SBI..., but as of now no one has even blinked...and breaching of people&rsquo;s personal information is continuing,&rdquo; he wrote to the RBI Governor on November 28.

He said he had been &ldquo;pleading&rdquo; with SBI at the highest level for the past 16 months to ensure compliance with RBI directions, but nothing has changed.

After the RBI referred the matter to SBI, the bank responded by saying that &ldquo;the envelops (window envelops) in which income tax refund orders are being dispatched to various assesses will be redesigned, so that the PAN number is not visible to anyone&rdquo;.

An activist had complained that the window envelopes used by the State Bank of India make it easy for someone to look at tax payees' PAN and contact numbers

State Bank of India will “redesign” its envelopes used to dispatch tax refund cheques of customers to cover their permanent account number (PAN) and contact numbers after an activist raised that the crucial personal information was visible to anyone which may result in misuse, the bank said. The move comes nearly 16 months after activist Commodore (retd) Lokesh Batra raised the issue that the window envelopes used by SBI make it easy for someone to glance through PAN and contact number of the tax payee and misuse it. Batra wrote to Reserve Bank of India (RBI) Governor Urjit Patel, alleging that SBI was violating its directions on ‘protection of customer’s information’ by sending crucial information about customers in “unsecured envelopes”. “This systemic failures by banks must be breaching the personal information of very large numbers of People. I had reported this matter at the highest level in SBI..., but as of now no one has even blinked...and breaching of people’s personal information is continuing,” he wrote to the RBI Governor on November 28. He said he had been “pleading” with SBI at the highest level for the past 16 months to ensure compliance with RBI directions, but nothing has changed. After the RBI referred the matter to SBI, the bank responded by saying that “the envelops (window envelops) in which income tax refund orders are being dispatched to various assesses will be redesigned, so that the PAN number is not visible to anyone”.

SBI to redesign envelopes for dispatching tax cheques to protect PAN

The Reserve Bank of India is likely to leave interest rates unchanged at its December policy meeting and through the end of next year, <a href="http://www.wionews.com/india-news/indias-october-retail-inflation-touches-seven-month-high-of-358-percent-24113">despite expectations that&nbsp;inflation</a> will breach its 4 percent target in the next few months, a Reuters poll showed.

The results, from a poll of economists taken over the past week, also found there is a bigger risk the next move is a cut, even though forecasts diverge in three directions starting from the second quarter of next year.

That suggests both that policymakers have little room for manoeuvre and the outlook for rates beyond the next few months is exceptionally fuzzy, with several respondents saying they were unwilling to look much beyond the turn of the year.

The poll comes at a possible turning point for Asia&#39;s third-largest economy, with a separate Reuters survey showing economists now expect a rebound in economic growth after five consecutive quarters of deceleration.

&quot;In the RBI&#39;s perception,&nbsp;inflation&nbsp;is inching up and the risks of that remaining high remain for a longer duration, say a couple of quarters or so, it may be difficult for the RBI to consider a rate cut around that scenario,&quot; said Shubhada Rao, chief economist at Yes Bank in Mumbai.

&quot;In our opinion, a December rate cut is ruled out. Maybe next year (but) a lot depends on how inflation&nbsp;plays out,&quot; said Rao, who was the most accurate forecaster on the Indian economy in Reuters Polls last year.

The latest survey found 52 of 54 economists expected the RBI to hold the repo rate at 6.0 percent on Dec. 6, with just two forecasting a 25-basis-point cut to 5.75 percent.

The RBI&#39;s Monetary Policy Committee at its meeting in October expressed concern about rising inflation, one of the reasons it decided to keep rates steady then.&nbsp;Inflation&nbsp;rose to 3.6 percent at last count, the highest in seven months.

In the poll, 20 of 26 economists who answered an additional question said&nbsp;inflation&nbsp;was likely to rise above the RBI&#39;s 4 percent medium-term target by March, with forecasts split nearly evenly between the current quarter and early 2018.

But not all economists were concerned about&nbsp;inflation, which is still low by historical standards.

Finance ministry officials told Reuters that India&#39;s government is lobbying for a rate cut.

&quot;We expect the RBI to cut policy rates, if not in December then in its next policy review,&quot; one ministry official told Reuters on condition of anonymity.

Prime Minister Narendra Modi&#39;s government has hit the economy with sweeping changes over the past year by removing more than 85 percent of the currency in circulation as well as implementing a new national goods and services tax.

But if the RBI were to cut rates, it would be out of step with the latest trend among major central banks, which are now looking to either tighten policy or move away from ultra-easy policy in place since the financial crisis a decade ago.

The US&nbsp;Federal Reserve has been raising rates for the last two years, the Bank of Canada has lifted them twice this year and even the Bank of England put up borrowing costs earlier this month, in part on&nbsp;inflation&nbsp;concerns.

The global economy is also fairly strong, with most economies growing simultaneously. Yet at its last policy review, the RBI cut its growth outlook for the current fiscal year to 6.7 percent from 7.3 percent, suggesting it is not close to considering raising rates.

The latest Reuters poll found economists overwhelmingly expected no changes to that domestic outlook at the December policy meeting, further evidence that the repo rate is likely to remain on hold at 6.0 percent then and for a while longer.

Sajjid Chinoy, chief India economist at JP Morgan, wrote in a recent note to clients that the significant rise in oil prices over recent months, which will pinch consumers through higherinflation, is a good reason for pause.

&quot;The resulting jump in&nbsp;inflation, which we now see rising to above 4.5 percent next quarter, is likely to keep the RBI cautious at its December review.&quot;

The Reserve Bank of India is likely to leave interest rates unchanged at its December policy meeting and through the end of next year, despite expectations that?inflation will breach its 4 percent target in the next few months, a Reuters poll showed

The Reserve Bank of India is likely to leave interest rates unchanged at its December policy meeting and through the end of next year, despite expectations that inflation will breach its 4 percent target in the next few months, a Reuters poll showed. The results, from a poll of economists taken over the past week, also found there is a bigger risk the next move is a cut, even though forecasts diverge in three directions starting from the second quarter of next year. That suggests both that policymakers have little room for manoeuvre and the outlook for rates beyond the next few months is exceptionally fuzzy, with several respondents saying they were unwilling to look much beyond the turn of the year. The poll comes at a possible turning point for Asia's third-largest economy, with a separate Reuters survey showing economists now expect a rebound in economic growth after five consecutive quarters of deceleration. "In the RBI's perception, inflation is inching up and the risks of that remaining high remain for a longer duration, say a couple of quarters or so, it may be difficult for the RBI to consider a rate cut around that scenario," said Shubhada Rao, chief economist at Yes Bank in Mumbai. "In our opinion, a December rate cut is ruled out. Maybe next year (but) a lot depends on how inflation plays out," said Rao, who was the most accurate forecaster on the Indian economy in Reuters Polls last year. The latest survey found 52 of 54 economists expected the RBI to hold the repo rate at 6.0 percent on Dec. 6, with just two forecasting a 25-basis-point cut to 5.75 percent. The RBI's Monetary Policy Committee at its meeting in October expressed concern about rising inflation, one of the reasons it decided to keep rates steady then. Inflation rose to 3.6 percent at last count, the highest in seven months. In the poll, 20 of 26 economists who answered an additional question said inflation was likely to rise above the RBI's 4 percent medium-term target by March, with forecasts split nearly evenly between the current quarter and early 2018. But not all economists were concerned about inflation, which is still low by historical standards. Finance ministry officials told Reuters that India's government is lobbying for a rate cut. "We expect the RBI to cut policy rates, if not in December then in its next policy review," one ministry official told Reuters on condition of anonymity. Prime Minister Narendra Modi's government has hit the economy with sweeping changes over the past year by removing more than 85 percent of the currency in circulation as well as implementing a new national goods and services tax. But if the RBI were to cut rates, it would be out of step with the latest trend among major central banks, which are now looking to either tighten policy or move away from ultra-easy policy in place since the financial crisis a decade ago. The US Federal Reserve has been raising rates for the last two years, the Bank of Canada has lifted them twice this year and even the Bank of England put up borrowing costs earlier this month, in part on inflation concerns. The global economy is also fairly strong, with most economies growing simultaneously. Yet at its last policy review, the RBI cut its growth outlook for the current fiscal year to 6.7 percent from 7.3 percent, suggesting it is not close to considering raising rates. The latest Reuters poll found economists overwhelmingly expected no changes to that domestic outlook at the December policy meeting, further evidence that the repo rate is likely to remain on hold at 6.0 percent then and for a while longer. Sajjid Chinoy, chief India economist at JP Morgan, wrote in a recent note to clients that the significant rise in oil prices over recent months, which will pinch consumers through higherinflation, is a good reason for pause. "The resulting jump in inflation, which we now see rising to above 4.5 percent next quarter, is likely to keep the RBI cautious at its December review."

India's inflation likely to rise, interest rates won't: Poll

Reserve Bank of India today said biometric identity number Aadhaar linkage with bank accounts is mandatory.

The RBI clarification followed media reports quoting a reply to a Right to Information (RTI) application that suggested the apex bank has not issued any order for mandatory Aadhaar linkage with bank accounts.

&quot;The Reserve Bank clarifies that, in applicable cases, linkage of Aadhaar number to bank account is mandatory under the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017 published in the Official Gazette on June 1, 2017,&quot; the central bank said in a statement.

These rules have statutory force and, as such, banks have to implement them without awaiting further instructions, it said.

The government in June had made Aadhaar mandatory for opening bank accounts as well as for any financial transaction of Rs 50,000 and above.

Existing bank account holders have been asked to furnish the Aadhaar number issued by the Unique Identification Authority of India (UIDAI) by December 31, 2017, failing which the account will cease to be operational, the government notification had said.

There were reports in media quoting an RTI query in which RBI had said it &quot;has not issued any instruction so far regarding mandatory linking of Aadhaar number with bank accounts&quot;.

The government in Budget 2017 had already mandated seeding of Aadhaar number with Permanent Account Number to avoid individuals using multiple PANs to evade taxes.

The notification issued amending the Prevention of Money- laundering (Maintenance of Records) Rules, 2005, mandated quoting of Aadhaar along with PAN or Form 60 by individuals, companies and partnership firms for all financial transactions of Rs 50,000 or above. PTI&nbsp;

The clarification followed media reports suggesting the apex bank has not issued any such order

Reserve Bank of India today said biometric identity number Aadhaar linkage with bank accounts is mandatory. The RBI clarification followed media reports quoting a reply to a Right to Information (RTI) application that suggested the apex bank has not issued any order for mandatory Aadhaar linkage with bank accounts. "The Reserve Bank clarifies that, in applicable cases, linkage of Aadhaar number to bank account is mandatory under the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017 published in the Official Gazette on June 1, 2017," the central bank said in a statement. These rules have statutory force and, as such, banks have to implement them without awaiting further instructions, it said. The government in June had made Aadhaar mandatory for opening bank accounts as well as for any financial transaction of Rs 50,000 and above. Existing bank account holders have been asked to furnish the Aadhaar number issued by the Unique Identification Authority of India (UIDAI) by December 31, 2017, failing which the account will cease to be operational, the government notification had said. There were reports in media quoting an RTI query in which RBI had said it "has not issued any instruction so far regarding mandatory linking of Aadhaar number with bank accounts". The government in Budget 2017 had already mandated seeding of Aadhaar number with Permanent Account Number to avoid individuals using multiple PANs to evade taxes. The notification issued amending the Prevention of Money- laundering (Maintenance of Records) Rules, 2005, mandated quoting of Aadhaar along with PAN or Form 60 by individuals, companies and partnership firms for all financial transactions of Rs 50,000 or above. PTI

Mandatory to link bank accounts to Aadhar, clarifies RBI

Wholesale inflation fell to 2.60 per cent in September as prices of food articles, led by vegetables, softened.

Inflation, based on the wholesale price index (WPI), had soared to a four-month high of 3.24 per cent in August 2017. It was 1.36 per cent in September 2016.

The government data released today showed that inflation in food articles tapered to 2.04 per cent in September, as against 5.75 per cent in August on a yearly basis.

Inflation in vegetable prices cooled to 15.48 per cent in September, as against a high of 44.91 per cent in the previous month.

Onion prices, however, continued to rule high with 79.78 per cent increase in September. In egg, meat and fish segment the rate of price rise was 5.47 per cent.

Inflation in manufactured products witnessed a slight increase at 2.72 per cent, against 2.45 per cent in August.

In fuel and power segment, inflation cooled to 9.01 per cent, against 9.99 per cent in August.

Fuel inflation has remained high in the past two months as petrol and diesel prices continued to rule high relentlessly on global crude oil rates, while power tariffs shot through the roof on lower domestic production.

Pulses continued to witness deflation at 24.26 per cent, likewise in potato at 46.52 per cent and wheat at 1.71 per cent.

The final print of July WPI inflation remained unchanged from provisional estimate of 1.88 per cent.

Data released earlier this week showed retail inflation at 3.28 per cent in September, unchanged from August, even as vegetable and cereal prices softened.

Besides industrial production grew at a nine-month high of 4.3 per cent in August, mainly on account of robust performance of mining and power sectors coupled with higher capital goods output.

Earlier this month, the Reserve Bank kept benchmark interest rate unchanged on fears of rising inflation while lowering growth forecast to 6.7 per cent for the current fiscal.

It also raised its inflation forecast to a range of 4.2 to 4.6 per cent during the remainder of current fiscal as against 4 to 4.5 per cent previously.

WPI was at a four-month high of 3.24% in August

Wholesale inflation fell to 2.60 per cent in September as prices of food articles, led by vegetables, softened. Inflation, based on the wholesale price index (WPI), had soared to a four-month high of 3.24 per cent in August 2017. It was 1.36 per cent in September 2016. The government data released today showed that inflation in food articles tapered to 2.04 per cent in September, as against 5.75 per cent in August on a yearly basis. Inflation in vegetable prices cooled to 15.48 per cent in September, as against a high of 44.91 per cent in the previous month. Onion prices, however, continued to rule high with 79.78 per cent increase in September. In egg, meat and fish segment the rate of price rise was 5.47 per cent. Inflation in manufactured products witnessed a slight increase at 2.72 per cent, against 2.45 per cent in August. In fuel and power segment, inflation cooled to 9.01 per cent, against 9.99 per cent in August. Fuel inflation has remained high in the past two months as petrol and diesel prices continued to rule high relentlessly on global crude oil rates, while power tariffs shot through the roof on lower domestic production. Pulses continued to witness deflation at 24.26 per cent, likewise in potato at 46.52 per cent and wheat at 1.71 per cent. The final print of July WPI inflation remained unchanged from provisional estimate of 1.88 per cent. Data released earlier this week showed retail inflation at 3.28 per cent in September, unchanged from August, even as vegetable and cereal prices softened. Besides industrial production grew at a nine-month high of 4.3 per cent in August, mainly on account of robust performance of mining and power sectors coupled with higher capital goods output. Earlier this month, the Reserve Bank kept benchmark interest rate unchanged on fears of rising inflation while lowering growth forecast to 6.7 per cent for the current fiscal. It also raised its inflation forecast to a range of 4.2 to 4.6 per cent during the remainder of current fiscal as against 4 to 4.5 per cent previously.

Wholesale inflation falls to 2.6% in September

Indian banks&rsquo; sour loans hit a record $145.56 billion&nbsp;at the end of June, unpublished data shows, suggesting Asia&rsquo;s third-largest economy is no nearer to bringing its bad debt problems under control.

A review of Reserve Bank of India (RBI) data obtained through right-to-information requests shows banks&rsquo; total stressed loans, including non-performing and restructured or rolled over loans, rose 4.5 per cent in the six months to end-June. In the previous six months, they had risen 5.8 per cent.

While banks remain the main source of funding for India&rsquo;s companies, the stubborn bad debt problem has eaten into bank profits and choked off new lending, especially to smaller firms, at a time when an economy that depends on them is stalling.

India grew at its slowest pace in three years in April-June, a concern for the government of Prime Minister Narendra Modi, who faces elections in 2019 and has pledged to create millions of new jobs before then.

Banks are having to take higher provisions to account for more defaulters being pushed into bankruptcy. And margins are likely to be squeezed further by proposed new rules to encourage commercial banks to pass on central bank interest rate cuts.

To be sure, the bulk of India&rsquo;s sour loans are in the state banks and stem from lending to large conglomerates, especially in steel and infrastructure. But analysts say the rise in bad loans among small firms, and even retail borrowing, is worrying and will do little to encourage new loans to help fuel growth.

&ldquo;On the corporate side, we think it&rsquo;s a recognition cycle which is nearing an end,&rdquo; said Alka Anbarasu, senior analyst at Moody&rsquo;s Investor Service, referring to more bad loans being recognised as such, as banks come under pressure from the RBI and other regulators. &ldquo;But it&rsquo;s really those data points beyond corporate that are causing some worry.&rdquo;

Anbarasu forecasts weak quarters ahead for banks before profitability picks up, and several senior bankers from public sector lenders, which account for more than two-thirds of Indian banking assets - agreed the months ahead would be strained.

Stressed loans as a percentage of total loans reached 12.6 per cent at end-June, according to the RBI data, the highest level in at least 15 years.

Part of the issue for banks and the government is a strict provisioning regime, the RBI wants banks to provide for at least 50 per cent of the secured loans to companies taken to bankruptcy proceedings, and 100 per cent for the unsecured part.

A dozen of the biggest such cases account for nearly 1.78 trillion rupees, or a quarter of total non-performing assets.

For those companies, banks will need to provide 180 billion rupees on top of existing provisions, according to July estimates from India Ratings and Research, the local affiliate of Fitch Ratings.

More than 20 other sizeable companies are at risk of being taken to bankruptcy court.

Bankers say these and other pressures, including rising government bond yields that forced banks to post mark-to-market losses, have added to the squeeze, and hit new loans.

According to RBI data, new loans grew at just about 5 per cent in the year to March, the lowest growth rate in more than six decades. Several banks have already cut back their loan books to conserve capital.

&ldquo;What are they (RBI) thinking while they&rsquo;re taking these steps all at the same time?&rdquo; said a treasurer at a state-run bank, who didn&rsquo;t want to be named due to the sensitivity of the issue. &ldquo;Do they want banks to wind up their businesses, or do they want to save the banks?&rdquo;

Treasury income accounted for 22.7 per cent of banks&rsquo; operating profits in the last financial year, doubling its share from a year earlier, India Ratings estimates.

&ldquo;The almost zero treasury income will hit provisioning ability and, in turn, make it more difficult for weaker banks to give loans as capital becomes more scarce,&rdquo; said Soumyajit Niyogi, an associate director at the rating agency.

A senior policymaker, who requested anonymity as the discussions are not public, said the government would have to help to sufficiently capitalise the banks.

Fitch Ratings estimates Indian banks will need $65 billion of additional capital by March 2019 to meet Basel III global banking rules. Moody&rsquo;s expects the top 11 state lenders alone will need nearly $15 billion. The government has just $3 billion left in its budget for bank recapitalisation.

&ldquo;We think capitalisation is the biggest challenge for the banks at the moment, given that earnings will remain subdued and will not support any capital generation,&rdquo; said Moody&rsquo;s Anbarasu.

A review of Reserve Bank of India (RBI) data obtained through right-to-information requests shows banks? total stressed loans, including non-performing and restructured or rolled over loans, rose 4.5 per cent in the six months to end-June. In the previous six months, they had risen 5.8 per cent

Indian banks’ sour loans hit a record $145.56 billion at the end of June, unpublished data shows, suggesting Asia’s third-largest economy is no nearer to bringing its bad debt problems under control. A review of Reserve Bank of India (RBI) data obtained through right-to-information requests shows banks’ total stressed loans, including non-performing and restructured or rolled over loans, rose 4.5 per cent in the six months to end-June. In the previous six months, they had risen 5.8 per cent. While banks remain the main source of funding for India’s companies, the stubborn bad debt problem has eaten into bank profits and choked off new lending, especially to smaller firms, at a time when an economy that depends on them is stalling. India grew at its slowest pace in three years in April-June, a concern for the government of Prime Minister Narendra Modi, who faces elections in 2019 and has pledged to create millions of new jobs before then. Banks are having to take higher provisions to account for more defaulters being pushed into bankruptcy. And margins are likely to be squeezed further by proposed new rules to encourage commercial banks to pass on central bank interest rate cuts. To be sure, the bulk of India’s sour loans are in the state banks and stem from lending to large conglomerates, especially in steel and infrastructure. But analysts say the rise in bad loans among small firms, and even retail borrowing, is worrying and will do little to encourage new loans to help fuel growth. “On the corporate side, we think it’s a recognition cycle which is nearing an end,” said Alka Anbarasu, senior analyst at Moody’s Investor Service, referring to more bad loans being recognised as such, as banks come under pressure from the RBI and other regulators. “But it’s really those data points beyond corporate that are causing some worry.” Anbarasu forecasts weak quarters ahead for banks before profitability picks up, and several senior bankers from public sector lenders, which account for more than two-thirds of Indian banking assets - agreed the months ahead would be strained. Stressed loans as a percentage of total loans reached 12.6 per cent at end-June, according to the RBI data, the highest level in at least 15 years. Part of the issue for banks and the government is a strict provisioning regime, the RBI wants banks to provide for at least 50 per cent of the secured loans to companies taken to bankruptcy proceedings, and 100 per cent for the unsecured part. A dozen of the biggest such cases account for nearly 1.78 trillion rupees, or a quarter of total non-performing assets. For those companies, banks will need to provide 180 billion rupees on top of existing provisions, according to July estimates from India Ratings and Research, the local affiliate of Fitch Ratings. More than 20 other sizeable companies are at risk of being taken to bankruptcy court. Bankers say these and other pressures, including rising government bond yields that forced banks to post mark-to-market losses, have added to the squeeze, and hit new loans. According to RBI data, new loans grew at just about 5 per cent in the year to March, the lowest growth rate in more than six decades. Several banks have already cut back their loan books to conserve capital. “What are they (RBI) thinking while they’re taking these steps all at the same time?” said a treasurer at a state-run bank, who didn’t want to be named due to the sensitivity of the issue. “Do they want banks to wind up their businesses, or do they want to save the banks?” Treasury income accounted for 22.7 per cent of banks’ operating profits in the last financial year, doubling its share from a year earlier, India Ratings estimates. “The almost zero treasury income will hit provisioning ability and, in turn, make it more difficult for weaker banks to give loans as capital becomes more scarce,” said Soumyajit Niyogi, an associate director at the rating agency. A senior policymaker, who requested anonymity as the discussions are not public, said the government would have to help to sufficiently capitalise the banks. Fitch Ratings estimates Indian banks will need $65 billion of additional capital by March 2019 to meet Basel III global banking rules. Moody’s expects the top 11 state lenders alone will need nearly $15 billion. The government has just $3 billion left in its budget for bank recapitalisation. “We think capitalisation is the biggest challenge for the banks at the moment, given that earnings will remain subdued and will not support any capital generation,” said Moody’s Anbarasu.

India's bad loans hit record 9.5 lakh crore

The RBI announced Wednesday that it was keeping the repo rate unchanged at 5.75%.&nbsp;

It said that it was also keeping the reverse repo rate unchanged at 6.25%.&nbsp;

And it added that India would grow at 6.7% in 2017-18.

There would it said be an acceleration in growth in the second half, to 7.1% in the third quarter and to 7.7% in the fourth quarter.&nbsp;

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Projection of growth of 6.7 % for 2017-18 as a whole is consistent with an acceleration in second half to 7.1% in Q3 &amp; 7.7% in Q4: RBI
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/915588740050952192?ref_src=twsrc%5Etfw">October 4, 2017</a></blockquote>
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&nbsp;

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RBI decides to keep repo rate unchanged,reverse repo rate remains at 5.75% and bank rate at 6.25%
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/915502077178109952?ref_src=twsrc%5Etfw">October 4, 2017</a></blockquote>
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<a href="https://twitter.com/hashtag/WATCH?src=hash&amp;ref_src=twsrc%5Etfw">#WATCH</a> Reserve Bank of India Governor Urjit Patel briefs the media on monetary policy <a href="https://t.co/xNflo6LD3d">https://t.co/xNflo6LD3d</a>
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/915505843503734784?ref_src=twsrc%5Etfw">October 4, 2017</a></blockquote>
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The central bank added that inflation is expected to rise from its current levels to between 4.2 to 4.6% in the second half of 2017.&nbsp;

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Inflation is expected to rise from its current level&amp; range b/w 4.2-4.6 % in 2nd half of 2017, including house rent allowance by Centre: RBI
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/915504055736082433?ref_src=twsrc%5Etfw">October 4, 2017</a></blockquote>
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The bank added that it had revised the country&#39;s real Gross Value Added growth projection downwards to 6.7% from 7.3%.&nbsp;

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The projection of real Gross Value Added (GVA) growth for 2017-18 has been revised down to 6.7 % from August 2017 projection of 7.3 %: RBI
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/915505640612622336?ref_src=twsrc%5Etfw">October 4, 2017</a></blockquote>
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RBI governor Urjit Patel said the RBI expressed concern about the &quot;weakening of the manufacturing sector in the first half of the year.&quot;

He added that measures need to be undertaken to encourage growth.&nbsp;&nbsp;

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Measures need to be undertaken to support growth&amp;achieve faster closure of output gap incl. restarting stalled investment projects: RBI(1/2) <a href="https://t.co/xxAUcHib53">pic.twitter.com/xxAUcHib53</a>
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/915510137107836928?ref_src=twsrc%5Etfw">October 4, 2017</a></blockquote>
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Enhancing ease of doing business,including by further simplification of GST; &amp;ensuring faster rollout of affordable housing program-RBI(2/2)
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/915510941734674432?ref_src=twsrc%5Etfw">October 4, 2017</a></blockquote>
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And that &quot;factors that have affected growth in the second quarter, some of them will dissipate.&quot;&nbsp;

Leaving the repo rate and the reverse repo rate unchanged means there will be no change in people&#39;s EMIs.&nbsp;

Commentators said the Reserve Bank of India is at the moment in wait-and-watch mode.&nbsp;

We have just entered the festive season, which is also peak demand season.&nbsp;

This is when people plan large new buys, and also when sellers offer their largest discounts.&nbsp;

The commentators said the RBI would decide in December -- depending on what the figures then say about demand now -- on a change in rates.&nbsp;

Should demand stay low, there might be a downward revision in rates and vice versa.&nbsp;

The central bank said there would be an acceleration in growth in the second half to 7.1% in the third quarter and to 7.7% in the fourth quarter

The RBI announced Wednesday that it was keeping the repo rate unchanged at 5.75%. It said that it was also keeping the reverse repo rate unchanged at 6.25%. And it added that India would grow at 6.7% in 2017-18. There would it said be an acceleration in growth in the second half, to 7.1% in the third quarter and to 7.7% in the fourth quarter. Projection of growth of 6.7 % for 2017-18 as a whole is consistent with an acceleration in second half to 7.1% in Q3 & 7.7% in Q4: RBI — ANI (@ANI) October 4, 2017 × RBI decides to keep repo rate unchanged,reverse repo rate remains at 5.75% and bank rate at 6.25% — ANI (@ANI) October 4, 2017 × #WATCH Reserve Bank of India Governor Urjit Patel briefs the media on monetary policy https://t.co/xNflo6LD3d — ANI (@ANI) October 4, 2017 × The central bank added that inflation is expected to rise from its current levels to between 4.2 to 4.6% in the second half of 2017. Inflation is expected to rise from its current level& range b/w 4.2-4.6 % in 2nd half of 2017, including house rent allowance by Centre: RBI — ANI (@ANI) October 4, 2017 × The bank added that it had revised the country's real Gross Value Added growth projection downwards to 6.7% from 7.3%. The projection of real Gross Value Added (GVA) growth for 2017-18 has been revised down to 6.7 % from August 2017 projection of 7.3 %: RBI — ANI (@ANI) October 4, 2017 × RBI governor Urjit Patel said the RBI expressed concern about the "weakening of the manufacturing sector in the first half of the year." He added that measures need to be undertaken to encourage growth. Measures need to be undertaken to support growth&achieve faster closure of output gap incl. restarting stalled investment projects: RBI(1/2) pic.twitter.com/xxAUcHib53 — ANI (@ANI) October 4, 2017 × Enhancing ease of doing business,including by further simplification of GST; &ensuring faster rollout of affordable housing program-RBI(2/2) — ANI (@ANI) October 4, 2017 × And that "factors that have affected growth in the second quarter, some of them will dissipate." Leaving the repo rate and the reverse repo rate unchanged means there will be no change in people's EMIs. Commentators said the Reserve Bank of India is at the moment in wait-and-watch mode. We have just entered the festive season, which is also peak demand season. This is when people plan large new buys, and also when sellers offer their largest discounts. The commentators said the RBI would decide in December -- depending on what the figures then say about demand now -- on a change in rates. Should demand stay low, there might be a downward revision in rates and vice versa.

RBI says India will grow at 6.7% in 2017-18

A man in Mumbai has been found in possession of the new Rs. 50 note which is yet to be released by the Reserve Bank of India (RBI). In what can be considered a serious security breach, this news comes after RBI announced the introduction of new currency notes for the already in use Rs. 50 denomination.&nbsp;

As reported by The Indian Express, the man was spotted in Mumbai posing with the new note clenching it between his fingers. However, the origin of the note is yet to be determined.&nbsp;

Speaking to the English daily, government officials have&nbsp;confirmed&nbsp;that the new Rs 50 note of the Mahatma Gandhi (new) series will be issued by the RBI soon.&nbsp;

The new bank notes will have the signature of the incumbent RBI Governor Urjit Patel.

RBI&nbsp;has informed that the note&nbsp;will have the motif of Hampi with Chariot on the reverse, depicting the country&rsquo;s cultural heritage. The colour will be a fluorescent blue and it will also have other designs like geometric patterns aligning with the overall colour scheme. The note will be of a dimension of 66 mm x 135 mm.&nbsp;

All old Rs 50 banknotes will continue to be legal tender.

Meanwhile, the <a href="http://www.wionews.com/india-news/rs-200-note-to-be-introduced-by-rbi-today-19431">new Rs 200 note has been introduced</a> to aid in the day-to day transactions and to help replenish the reduction of the new Rs 500 notes which were introduced post demonetisation. These Rs 200 notes will have bright yellow base colour and a motif of Sanchi Stupa, as per the RBI.

(WION)

&nbsp;

This can be considered a serious security breach in India

A man in Mumbai has been found in possession of the new Rs. 50 note which is yet to be released by the Reserve Bank of India (RBI). In what can be considered a serious security breach, this news comes after RBI announced the introduction of new currency notes for the already in use Rs. 50 denomination. As reported by The Indian Express, the man was spotted in Mumbai posing with the new note clenching it between his fingers. However, the origin of the note is yet to be determined. Speaking to the English daily, government officials have confirmed that the new Rs 50 note of the Mahatma Gandhi (new) series will be issued by the RBI soon. The new bank notes will have the signature of the incumbent RBI Governor Urjit Patel. RBI has informed that the note will have the motif of Hampi with Chariot on the reverse, depicting the country’s cultural heritage. The colour will be a fluorescent blue and it will also have other designs like geometric patterns aligning with the overall colour scheme. The note will be of a dimension of 66 mm x 135 mm. All old Rs 50 banknotes will continue to be legal tender. Meanwhile, the new Rs 200 note has been introduced to aid in the day-to day transactions and to help replenish the reduction of the new Rs 500 notes which were introduced post demonetisation. These Rs 200 notes will have bright yellow base colour and a motif of Sanchi Stupa, as per the RBI. (WION)

Mumbai man has new Rs 50 note even before RBI released it

India&#39;s central bank, the Reserve Bank of India unveiled the design of its Rs 200 currency note and said the new denomination will be introduced in the market on today.

The notes, which bear the signature of Urjit Patel, will be issued&nbsp;from select offices of the RBI and some banks.

The base colour of the note is bright yellow and it has motif of the historical icon, the Sanchi Stupa on the reverse. The obverse side has the portrait of Mahatma Gandhi at the centre and the country&#39;s national emblem, the Ashoka Pillar embossed on the right.

The note also features Prime Minister Narendra Modi&#39;s &#39;Swachh Bharat&#39; logo and slogan.

The designs and geometric patterns of the 66 mm&times;146 mm note align with the overall colour scheme, both at the obverse and reverse.

The note also features the micro letters &quot;RBI, &quot;India&quot; and &quot;200&quot;.&nbsp;

The RBI says the design was chalked out keeping in consideration factors like the ease of transactions, replacement of soiled banknotes, inflation and the need for combating counterfeiting.&nbsp;The Mahatma Gandhi portrait and the Ashoka Pillar emblem have been raised to help the visually impaired.

The Rs 400 note is the fourth new note to be introduced by the RBI since it scrapped Rs 500 and Rs 1000 currency last year in November.

Following demonetisation, the RBI has introduced new Rs 2000, Rs 500 and Rs 50 notes.

&nbsp;

The base colour of the note is bright yellow and it has motif of the historical icon, the Sanchi Stupa on the reverse

India's central bank, the Reserve Bank of India unveiled the design of its Rs 200 currency note and said the new denomination will be introduced in the market on today. The notes, which bear the signature of Urjit Patel, will be issued from select offices of the RBI and some banks. The base colour of the note is bright yellow and it has motif of the historical icon, the Sanchi Stupa on the reverse. The obverse side has the portrait of Mahatma Gandhi at the centre and the country's national emblem, the Ashoka Pillar embossed on the right. The note also features Prime Minister Narendra Modi's 'Swachh Bharat' logo and slogan. The designs and geometric patterns of the 66 mm×146 mm note align with the overall colour scheme, both at the obverse and reverse. The note also features the micro letters "RBI, "India" and "200". The RBI says the design was chalked out keeping in consideration factors like the ease of transactions, replacement of soiled banknotes, inflation and the need for combating counterfeiting. The Mahatma Gandhi portrait and the Ashoka Pillar emblem have been raised to help the visually impaired. The Rs 400 note is the fourth new note to be introduced by the RBI since it scrapped Rs 500 and Rs 1000 currency last year in November. Following demonetisation, the RBI has introduced new Rs 2000, Rs 500 and Rs 50 notes.

Rs 200 note to be introduced by RBI today

The Reserve Bank of India (RBI) on Friday announced circulation of new currency denomination of Rs. 50 banknotes in the Mahatma Gandhi (New) Series.

Bearing signature of RBI Governor Urjit Patel, the new denomination has motif of Hampi with Chariot on the reverse, depicting the country`s cultural heritage.

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<a href="https://twitter.com/hashtag/FLASH?src=hash">#FLASH</a> RBI to shortly issue 50 denomination banknotes with motif of Hampi with Chariot on reverse, depicting country&rsquo;s cultural heritage <a href="https://t.co/Ao4MnMMNUG">pic.twitter.com/Ao4MnMMNUG</a>
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/898532465647599616">August 18, 2017</a></blockquote>
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With base colour in fluorescent blue, the note has other designs, geometric patterns aligning with the overall colour scheme, both at the obverse and reverse.

All the banknotes in the denomination of Rs. 50 issued by the RBI in the earlier series will continue to be legal tender.

Last year in December, the central bank had announced issue of Rs. 50 denomination banknotes in the Mahatma Gandhi Series-2005, without inset letter in both the number panels, bearing signature of Patel and the year of printing `2016` printed on the reverse of the banknote.

It added that the design and security features of the new notes will be similar to the old tender, which will continue in circulation.&nbsp;

The new note has a picture of Gandhi on the front and Hampi on the back

The Reserve Bank of India (RBI) on Friday announced circulation of new currency denomination of Rs. 50 banknotes in the Mahatma Gandhi (New) Series. Bearing signature of RBI Governor Urjit Patel, the new denomination has motif of Hampi with Chariot on the reverse, depicting the country`s cultural heritage. #FLASH RBI to shortly issue 50 denomination banknotes with motif of Hampi with Chariot on reverse, depicting country’s cultural heritage pic.twitter.com/Ao4MnMMNUG — ANI (@ANI) August 18, 2017 × With base colour in fluorescent blue, the note has other designs, geometric patterns aligning with the overall colour scheme, both at the obverse and reverse. All the banknotes in the denomination of Rs. 50 issued by the RBI in the earlier series will continue to be legal tender. Last year in December, the central bank had announced issue of Rs. 50 denomination banknotes in the Mahatma Gandhi Series-2005, without inset letter in both the number panels, bearing signature of Patel and the year of printing `2016` printed on the reverse of the banknote. It added that the design and security features of the new notes will be similar to the old tender, which will continue in circulation.

RBI introduces new Rs 50 note

The Reserve Bank of India will likely cut its main policy rate on Wednesday by a quarter percentage point to a more than 6-1/2 year low after inflation slumped. The question is whether the cautious central bank will signal readiness to ease more.

Forty of 56 economists polled by Reuters predicted the RBI will cut its repo rate by 25 basis points to 6.00 per cent - the lowest since November 2010 - as a slump in food prices sent June consumer inflation to a more than five-year low of 1.54 per cent.

That&#39;s well below the RBI&#39;s 4 per cent target and its projection of 2.0-3.5 per cent in April-September, sparking pressure from the government and others to cut rates by 50 bps on Wednesday or signal another 25 bps easing later this year.

The central bank has previously warned that inflation could accelerate due to a seasonal rebound in food prices and factors such as planned pay hikes for government employees.

Retaining a cautious stance could cause tension with a government keen to lift the economic growth from January-March&#39;s 6.1 per cent - fast by global standards but the lowest in over two years.

Proponents of more rate cuts argue these would make loans cheaper and help companies refinance their debt, while potentially helping reduce some of the $30.3 billion in capital inflows into stocks and debt markets lifting the rupee by 5.6 per cent against the dollar this year.

These arguments were seemingly given a boost after a private survey on Tuesday showed Indian factory activity suffered its deepest contraction in more than nine years after confusion about the new goods and services tax battered output and demand.

&#39;Benign&#39;&nbsp;trajectory

Shubhada Rao, YES Bank chief economist, said a 50 bps rate cut &quot;will be more effective&quot; and that inflation is on a &quot;benign&quot; trajectory though she added that the RBI may adopt a measured approach. YES Bank has cut its 2017/18 average inflation projection to 3.5 perc ent from 4 per cent.

Yet markets are unwilling to wager strongly on more aggressive rate cuts, with most analysts polled by Reuters expecting the repo to stay at 6.00 per cent for a long time after Wednesday.

Doubts about the RBI&#39;s policy path reflect its longstanding caution on inflation.

After a 25 bp cut in October, the RBI has kept rates at 6.25 per cent and shocked markets by changing its stance to &quot;neutral&quot; from &quot;accommodative&quot; in February.

The RBI sharply cut its inflation forecasts at its last meeting, in June, but it still believes consumer prices in October-March will rise 3.5-4.5 per cent from a year earlier.

The government&#39;s chief economic adviser, Arvind Subramanian, and others call the projections too high, as efforts to curb food prices and low energy prices will keep inflation low for some time to come.

The RBI&#39;s stance has its defenders, including IDFC Bank chief economist Indranil Pan who, like the central bank, believes inflation will accelerate in two months. He said it should not cut rates on Wednesday.

&quot;Given that the central bank is under an inflation targeting regime, it doesn&#39;t make sense to cut rates when you know that inflation will rise going ahead,&quot; Pan said.

Doubts about the RBI's policy path reflect its longstanding caution on inflation

The Reserve Bank of India will likely cut its main policy rate on Wednesday by a quarter percentage point to a more than 6-1/2 year low after inflation slumped. The question is whether the cautious central bank will signal readiness to ease more. Forty of 56 economists polled by Reuters predicted the RBI will cut its repo rate by 25 basis points to 6.00 per cent - the lowest since November 2010 - as a slump in food prices sent June consumer inflation to a more than five-year low of 1.54 per cent. That's well below the RBI's 4 per cent target and its projection of 2.0-3.5 per cent in April-September, sparking pressure from the government and others to cut rates by 50 bps on Wednesday or signal another 25 bps easing later this year. The central bank has previously warned that inflation could accelerate due to a seasonal rebound in food prices and factors such as planned pay hikes for government employees. Retaining a cautious stance could cause tension with a government keen to lift the economic growth from January-March's 6.1 per cent - fast by global standards but the lowest in over two years. Proponents of more rate cuts argue these would make loans cheaper and help companies refinance their debt, while potentially helping reduce some of the $30.3 billion in capital inflows into stocks and debt markets lifting the rupee by 5.6 per cent against the dollar this year. These arguments were seemingly given a boost after a private survey on Tuesday showed Indian factory activity suffered its deepest contraction in more than nine years after confusion about the new goods and services tax battered output and demand. 'Benign' trajectory Shubhada Rao, YES Bank chief economist, said a 50 bps rate cut "will be more effective" and that inflation is on a "benign" trajectory though she added that the RBI may adopt a measured approach. YES Bank has cut its 2017/18 average inflation projection to 3.5 perc ent from 4 per cent. Yet markets are unwilling to wager strongly on more aggressive rate cuts, with most analysts polled by Reuters expecting the repo to stay at 6.00 per cent for a long time after Wednesday. Doubts about the RBI's policy path reflect its longstanding caution on inflation. After a 25 bp cut in October, the RBI has kept rates at 6.25 per cent and shocked markets by changing its stance to "neutral" from "accommodative" in February. The RBI sharply cut its inflation forecasts at its last meeting, in June, but it still believes consumer prices in October-March will rise 3.5-4.5 per cent from a year earlier. The government's chief economic adviser, Arvind Subramanian, and others call the projections too high, as efforts to curb food prices and low energy prices will keep inflation low for some time to come. The RBI's stance has its defenders, including IDFC Bank chief economist Indranil Pan who, like the central bank, believes inflation will accelerate in two months. He said it should not cut rates on Wednesday. "Given that the central bank is under an inflation targeting regime, it doesn't make sense to cut rates when you know that inflation will rise going ahead," Pan said.

RBI may cut interest rates today

The 30-share BSE Sensex surged past the 32,000 mark for the first time closing at a record high of 32,037.&nbsp;

The broader 50-share Nifty also closed at a record high of 9,892.&nbsp;

The rally came on the back of retail inflation figures which hit a record low.&nbsp;

The retail inflation data, which came out on Wednesday, saw inflation dropping to a record low of 1.54 per cent. The lower inflation figures offer the Reserve Bank of India enough room for bringing the key interest rates down.

Asian and European indices were also trading higher on the back of Federal Reserve chair Janet Yellen testifying before the US Congress that the rate hike will be steady.

Foreign Portfolio Investors (FPI) took the opportunity to pour more money into the Indian equities.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 361.25 crore yesterday, PTI reported.

The market rally was led primarily by banking and consumer goods stocks.

ITC was the top gainer among the pack surging 3.03 per cent. Other top gainers included Bharti Airtel, ICICI Bank and Sun Pharma.&nbsp;

The rally came on the back of lower inflation figures which were released on Wednesday offering RBI enough room to bring down interest rates

The 30-share BSE Sensex surged past the 32,000 mark for the first time closing at a record high of 32,037. The broader 50-share Nifty also closed at a record high of 9,892. The rally came on the back of retail inflation figures which hit a record low. The retail inflation data, which came out on Wednesday, saw inflation dropping to a record low of 1.54 per cent. The lower inflation figures offer the Reserve Bank of India enough room for bringing the key interest rates down. Asian and European indices were also trading higher on the back of Federal Reserve chair Janet Yellen testifying before the US Congress that the rate hike will be steady. Foreign Portfolio Investors (FPI) took the opportunity to pour more money into the Indian equities. Foreign portfolio investors (FPIs) bought shares worth a net Rs 361.25 crore yesterday, PTI reported. The market rally was led primarily by banking and consumer goods stocks. ITC was the top gainer among the pack surging 3.03 per cent. Other top gainers included Bharti Airtel, ICICI Bank and Sun Pharma.

Sensex closes at record high, crosses 32,000

The Reserve Bank of India will soon come up with new Rs 200 notes and they have already placed a printing order for the same, sources told ANI. 
&nbsp; 
&quot;Printing order has been placed,&quot; A top Government official, who was reportedly a part of the decision-making process, told ANI.

In its report, ANI said the decision was taken by the RBI with the consultation of Finance Ministry in March.

It further says that a notification may be issued by the Reserve Bank of India on the same. 
&nbsp; 
After the announcement of demonetisation in November last year, the RBI had introduced new notes of Rs. 500 and 2,000.&nbsp;

India&#39;s top court today gave the Indian government and the central bank another two weeks to consider the option to grant a window to those who want to exchange their demonetised Rs 500 and Rs 1,000 notes.

Also read:&nbsp;<a href="http://www.wionews.com/south-asia/why-bar-a-person-from-depositingdemonetised-notes-supreme-court-to-government-17585">Why bar a person from depositing&nbsp;demonetised notes? Supreme Court to government</a> 
&nbsp;

The decision to introduce Rs. 200 notes was taken by the RBI with the consultation of Finance Ministry in March

The Reserve Bank of India will soon come up with new Rs 200 notes and they have already placed a printing order for the same, sources told ANI. "Printing order has been placed," A top Government official, who was reportedly a part of the decision-making process, told ANI. In its report, ANI said the decision was taken by the RBI with the consultation of Finance Ministry in March. It further says that a notification may be issued by the Reserve Bank of India on the same. After the announcement of demonetisation in November last year, the RBI had introduced new notes of Rs. 500 and 2,000. India's top court today gave the Indian government and the central bank another two weeks to consider the option to grant a window to those who want to exchange their demonetised Rs 500 and Rs 1,000 notes. Also read: Why bar a person from depositing demonetised notes? Supreme Court to government

RBI to soon unveil new Rs 200 notes, printing order placed: Report

The Reserve Bank of India (RBI) kept its key interest rate unchanged at 6.25 per cent on Wednesday, as widely expected, while lowering projections for inflation and striking a less hawkish tone in a policy statement.

The central bank&#39;s decision to leave the repo rate at a 6-1/2 year low had been expected by 56 of the 60 analysts surveyed by Reuters ahead of the monetary policy committee (MPC) meeting.

The reverse repo rate was also left unchanged at 6 per cent.

At the same time, the RBI cut banks&#39; statutory liquidity ratio - the amount of bonds they must set aside - by 50 basis points to 20 per cent of total deposits starting on June 24.

Significantly, however, the RBI cut its projection for consumer inflation to 2-3.5 per cent in April to September, down from 4.5 per cent earlier, and to 3.5-4.5 per cent in October to March, down from 5 per cent earlier.

The change in forecast comes after consumer prices rose in April at their lowest annual rate in at least five years, slowing to 2.99 per cent from 3.89 per cent in March, well below the RBI&#39;s target of 4.0 per cent.

The RBI said the risks to its inflation were &quot;evenly balanced,&quot; a tweak in its language from its statement in April when it cited &quot;upside risks&quot; to inflation.

&quot;The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth,&quot; the RBI said in a statement.

The vote by the central bank&#39;s monetary policy committee was 5-1, the first split in the five meetings that have taken place since the MPC was formed last September. The statement did not say how the dissenting member, Ravindra H. Dholakia, a professor, voted.

RBI last changed the policy rate with a 25 basis points cut in October, though it surprised analysts with a 25 basis point hike in its reverse repo rate in April.

Bonds gained, with the benchmark 10-year bond yield down 2 basis points to 7.44 per cent from its previous close, while the broader NSE share index rose up 0.2 per cent.

Several factors are pointing to more benign inflation, including the likelihood of above-average monsoon rains, falling commodity prices, and a 5 per cent rally in the rupee that has made imports cheaper.

The RBI said it wanted to see more evidence that the easing of inflation seen in April would endure, citing for example, sticky core inflation due to rising rural wage growth and strong consumption demand.

Inflation data for May will be released next week.

India&#39;s economy grew a slower-than-expected 6.1 per cent in the January-March quarter, its slowest pace in more than two years and down from 7 per cent in the previous quarter, although analysts expect growth to accelerate this year.

The slowdown was largely attributable to the government&#39;s shock decision last November to remove large denomination banknotes from circulation in a bid to combat rampant tax avoidance.

As a result, the RBI adjusted its projection for growth value-added, a measure of growth it prefers, to 7.3 per cent in the year to March 2018, down from its previous projection of 7.4 per cent, with &quot;risks evenly balanced&quot;.

(Reuters)

The interest rate was unchanged at 6.25 per cent on Wednesday

The Reserve Bank of India (RBI) kept its key interest rate unchanged at 6.25 per cent on Wednesday, as widely expected, while lowering projections for inflation and striking a less hawkish tone in a policy statement. The central bank's decision to leave the repo rate at a 6-1/2 year low had been expected by 56 of the 60 analysts surveyed by Reuters ahead of the monetary policy committee (MPC) meeting. The reverse repo rate was also left unchanged at 6 per cent. At the same time, the RBI cut banks' statutory liquidity ratio - the amount of bonds they must set aside - by 50 basis points to 20 per cent of total deposits starting on June 24. Significantly, however, the RBI cut its projection for consumer inflation to 2-3.5 per cent in April to September, down from 4.5 per cent earlier, and to 3.5-4.5 per cent in October to March, down from 5 per cent earlier. The change in forecast comes after consumer prices rose in April at their lowest annual rate in at least five years, slowing to 2.99 per cent from 3.89 per cent in March, well below the RBI's target of 4.0 per cent. The RBI said the risks to its inflation were "evenly balanced," a tweak in its language from its statement in April when it cited "upside risks" to inflation. "The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth," the RBI said in a statement. The vote by the central bank's monetary policy committee was 5-1, the first split in the five meetings that have taken place since the MPC was formed last September. The statement did not say how the dissenting member, Ravindra H. Dholakia, a professor, voted. RBI last changed the policy rate with a 25 basis points cut in October, though it surprised analysts with a 25 basis point hike in its reverse repo rate in April. Bonds gained, with the benchmark 10-year bond yield down 2 basis points to 7.44 per cent from its previous close, while the broader NSE share index rose up 0.2 per cent. Several factors are pointing to more benign inflation, including the likelihood of above-average monsoon rains, falling commodity prices, and a 5 per cent rally in the rupee that has made imports cheaper. The RBI said it wanted to see more evidence that the easing of inflation seen in April would endure, citing for example, sticky core inflation due to rising rural wage growth and strong consumption demand. Inflation data for May will be released next week. India's economy grew a slower-than-expected 6.1 per cent in the January-March quarter, its slowest pace in more than two years and down from 7 per cent in the previous quarter, although analysts expect growth to accelerate this year. The slowdown was largely attributable to the government's shock decision last November to remove large denomination banknotes from circulation in a bid to combat rampant tax avoidance. As a result, the RBI adjusted its projection for growth value-added, a measure of growth it prefers, to 7.3 per cent in the year to March 2018, down from its previous projection of 7.4 per cent, with "risks evenly balanced". (Reuters)

RBI keeps key interest rate unchanged, cuts inflation projections

New one rupee notes with predominantly pink-green on obverse and reverse in combination with other colours will be soon put into circulation.

The notes bearing the rupee symbol have been printed by the Government of India.

At present, one rupee coins are minted. Printing of one rupee notes was discontinued in 1994 but was relaunched in 2015.

&quot;The Reserve Bank of India will soon put into circulation currency notes in one rupee denomination,&quot; the central bank said in a statement.

The note will bear the signature of Shaktikanta Das, Secretary in the Ministry of Finance. Rest other currency notes bear the signature of the RBI Governor.

The numbering will be in black at right hand bottom portion of the note.

On the reverse side, the year &#39;2017&#39; is mentioned. There is also representation of One Rupee coin with rupee symbol having floral design and the surrounding design consists of the picture of &#39;Sagar Samrat&#39; the oil exploration platform.

&quot;The colour of One Rupee Currency Note shall be predominantly pink green on obverse and reverse in combination with others,&quot; the RBI said.

(PTI)

Printing of one rupee notes was discontinued in 1994 but was relaunched in 2015

New one rupee notes with predominantly pink-green on obverse and reverse in combination with other colours will be soon put into circulation. The notes bearing the rupee symbol have been printed by the Government of India. At present, one rupee coins are minted. Printing of one rupee notes was discontinued in 1994 but was relaunched in 2015. "The Reserve Bank of India will soon put into circulation currency notes in one rupee denomination," the central bank said in a statement. The note will bear the signature of Shaktikanta Das, Secretary in the Ministry of Finance. Rest other currency notes bear the signature of the RBI Governor. The numbering will be in black at right hand bottom portion of the note. On the reverse side, the year '2017' is mentioned. There is also representation of One Rupee coin with rupee symbol having floral design and the surrounding design consists of the picture of 'Sagar Samrat' the oil exploration platform. "The colour of One Rupee Currency Note shall be predominantly pink green on obverse and reverse in combination with others," the RBI said. (PTI)

New one rupee note to come out soon

Under Governor Urjit Patel, the Reserve Bank of India (RBI) will target inflation of 4 percent, three officials familiar with its thinking said, adopting a narrower reading of its mandate than markets in a bid to stamp out rampant price rises of the past.

The differing interpretations of amendments to last year&#39;s RBI Act reflect sometimes strained relations between the market and the central bank, and are proving a test for Patel some eight months into his tenure.

The amendments were part of landmark changes to India&#39;s monetary policy pushed by Patel, then deputy governor, and his predecessor as governor, Raghuram Rajan, and require the RBI &quot;to contain inflation within the specified target level&quot; of 4 percent, but within a tolerated band of 2-6 percent.

Markets have interpreted that as the range of 2-6 percent, arguing that pursuing a specific 4 percent target takes away the flexibility needed in an economy that must grow by at least 8 percent a year to allow for full employment.

But the RBI is determined to chase the 4 percent figure, the officials said, as Patel and the other five members of his monetary policy committee (MPC) seek to defend the RBI&#39;s credibility on inflation.

&quot;Markets should read the Act carefully and think as if they are a member of the MPC, and then think: how would they conduct policy?&quot; said one of the officials.

&quot;The Act clearly says 4 percent is the target and the 2-6 percent band has been given only to absorb temporary or one-time shocks.&quot;

All three officials spoke on condition of anonymity, because they were not authorised to speak to the press on sensitive policy issues.

The RBI did not give official comment.

Such a stance could open the prospect of earlier interest rate hikes than expected by markets, should prices start to move higher unexpectedly and remain there for some time.

The officials stressed, however, that the RBI was also mindful of growth, in line with an Act that tasks the MPC with &quot;maintaining price stability, while keeping in mind the objective of growth.&quot;

Consumer inflation stood at 3.81 percent in March, but weaker-than-expected monsoon rains and planned hikes to government employee salaries could easily see the 4 percent target under threat.

But any move to hike the repo rate of 6.25 percent would need to be balanced by concerns among market participants that the economy is weaker than the 7.0 percent growth in the October-December quarter, as India&#39;s move last year to ban higher-valued bank notes continues to reverberate.

&quot;So far as the 4 percent target goes, the MPC has to decide how to go ahead in a calibrated way, balancing out the costs associated with that stance,&quot; said the second of the three officials.

RBI VERSUS MARKETS

The pursuit of the 4 percent target will likely continue to remain a source of disagreement between the RBI and some market players, even as investors begin to adjust to a more hawkish monetary policy.

A Reuters poll last month showed only seven out of 38 economists expected a rate cut this year, down from 21 out of 36 earlier.

However, Indranil Sengupta, economist and co-head of India Research at Bank of America Merrill Lynch, said inflation was &quot;a long, long way&quot; from becoming an issue since the economy has yet to accelerate meaningfully.

&quot;In our opinion there is a case for a 25 bps rate cut in August,&quot; he said.

The differing views reflect how markets are still adjusting to the changes to the monetary policy framework over the past two years in a country with a history of volatile and double-digit inflation.

Patel started his tenure by cutting rates in October, priming investors to believe he would soften his focus on inflation, only to then stun investors by changing the monetary policy stance to &quot;neutral&quot; from &quot;accommodative&quot; in February and adopting a much more hawkish tone.

Since then, the 10-year benchmark government bond yield has risen about 50 basis points.

The officials defended the actions as consistent with the RBI&#39;s views on the trajectory of inflation, which hit as low as 3.17 percent in January.

But it has since accelerated, and becoming too tolerant could dent the bank&#39;s credibility, the officials argued.

&quot;If people start doubting RBI&#39;s credibility in controlling inflation, then producers will start raising prices, which in turn will push up inflation expectations. It is very important to keep inflation expectations well anchored,&quot; said the second official.&nbsp;

(Reuters)

The stance could open the prospect of earlier interest rate hikes than expected by markets

Under Governor Urjit Patel, the Reserve Bank of India (RBI) will target inflation of 4 percent, three officials familiar with its thinking said, adopting a narrower reading of its mandate than markets in a bid to stamp out rampant price rises of the past. The differing interpretations of amendments to last year's RBI Act reflect sometimes strained relations between the market and the central bank, and are proving a test for Patel some eight months into his tenure. The amendments were part of landmark changes to India's monetary policy pushed by Patel, then deputy governor, and his predecessor as governor, Raghuram Rajan, and require the RBI "to contain inflation within the specified target level" of 4 percent, but within a tolerated band of 2-6 percent. Markets have interpreted that as the range of 2-6 percent, arguing that pursuing a specific 4 percent target takes away the flexibility needed in an economy that must grow by at least 8 percent a year to allow for full employment. But the RBI is determined to chase the 4 percent figure, the officials said, as Patel and the other five members of his monetary policy committee (MPC) seek to defend the RBI's credibility on inflation. "Markets should read the Act carefully and think as if they are a member of the MPC, and then think: how would they conduct policy?" said one of the officials. "The Act clearly says 4 percent is the target and the 2-6 percent band has been given only to absorb temporary or one-time shocks." All three officials spoke on condition of anonymity, because they were not authorised to speak to the press on sensitive policy issues. The RBI did not give official comment. Such a stance could open the prospect of earlier interest rate hikes than expected by markets, should prices start to move higher unexpectedly and remain there for some time. The officials stressed, however, that the RBI was also mindful of growth, in line with an Act that tasks the MPC with "maintaining price stability, while keeping in mind the objective of growth." Consumer inflation stood at 3.81 percent in March, but weaker-than-expected monsoon rains and planned hikes to government employee salaries could easily see the 4 percent target under threat. But any move to hike the repo rate of 6.25 percent would need to be balanced by concerns among market participants that the economy is weaker than the 7.0 percent growth in the October-December quarter, as India's move last year to ban higher-valued bank notes continues to reverberate. "So far as the 4 percent target goes, the MPC has to decide how to go ahead in a calibrated way, balancing out the costs associated with that stance," said the second of the three officials. RBI VERSUS MARKETS The pursuit of the 4 percent target will likely continue to remain a source of disagreement between the RBI and some market players, even as investors begin to adjust to a more hawkish monetary policy. A Reuters poll last month showed only seven out of 38 economists expected a rate cut this year, down from 21 out of 36 earlier. However, Indranil Sengupta, economist and co-head of India Research at Bank of America Merrill Lynch, said inflation was "a long, long way" from becoming an issue since the economy has yet to accelerate meaningfully. "In our opinion there is a case for a 25 bps rate cut in August," he said. The differing views reflect how markets are still adjusting to the changes to the monetary policy framework over the past two years in a country with a history of volatile and double-digit inflation. Patel started his tenure by cutting rates in October, priming investors to believe he would soften his focus on inflation, only to then stun investors by changing the monetary policy stance to "neutral" from "accommodative" in February and adopting a much more hawkish tone. Since then, the 10-year benchmark government bond yield has risen about 50 basis points. The officials defended the actions as consistent with the RBI's views on the trajectory of inflation, which hit as low as 3.17 percent in January. But it has since accelerated, and becoming too tolerant could dent the bank's credibility, the officials argued. "If people start doubting RBI's credibility in controlling inflation, then producers will start raising prices, which in turn will push up inflation expectations. It is very important to keep inflation expectations well anchored," said the second official. (Reuters)

RBI to target 4 per cent inflation

The Reserve Bank (RBI) will soon issue Rs 10 denomination notes with enhanced security features for circulation.

The RBI &nbsp;said on Thursday that &nbsp;the banknotes in the Mahatma Gandhi series-2005 are to carry inset letter &#39;L&#39; on both number panels, bearing the signature of Governor Urjit Patel.

The year of printing, 2017, will be on the reverse of the note. Among other features, numerals on both the panels will be in ascending size from left to right.

The first three alpha-numeric characters (prefix) will remain constant in size.

&quot;All the banknotes in the denomination of Rs 10 issued by the Bank in the past will continue to be legal tender,&quot; the central bank said in a notification.&nbsp;

(PTI)

The existing ten-rupee notes will continue to be legal tender, RBI said

The Reserve Bank (RBI) will soon issue Rs 10 denomination notes with enhanced security features for circulation. The RBI said on Thursday that the banknotes in the Mahatma Gandhi series-2005 are to carry inset letter 'L' on both number panels, bearing the signature of Governor Urjit Patel. The year of printing, 2017, will be on the reverse of the note. Among other features, numerals on both the panels will be in ascending size from left to right. The first three alpha-numeric characters (prefix) will remain constant in size. "All the banknotes in the denomination of Rs 10 issued by the Bank in the past will continue to be legal tender," the central bank said in a notification. (PTI)

New ten-rupee notes with additional security features to be introduced: RBI

Indian shares retreated on Tuesday from four-month highs hit in the previous session as investors stayed on the sidelines ahead of the Reserve Bank of India&#39;s policy meeting.

Analysts expect the RBI to cut the repo rate by 25 basis points on Wednesday after December inflation hit a two-year low. But they warn it will be a close call since the central bank may even opt to maintain status quo until its next review in April.

RBI may keep rates unchanged as it continues to assess the impact of the crackdown on high-value notes on inflation, some analysts said.

Most Indian automakers were down, contributing to over three-fourths of Nifty&#39;s decline, with Tata Motors Ltd and Mahindra &amp; Mahindra Ltd falling as much as 2.4 per cent and 1.7 per cent respectively.

Banks have already slashed lending rates this year after deposits surged following the ban on high-denomination currency notes, reducing the need for further rate cuts.

&quot;I don&#39;t think that the RBI will cut interest rates this time,&quot; says Sangeeth V, an institutional sales trader with Paterson Securities.

&quot;Banks are already flush with funds post-demonetisation.&quot;

The broader Nifty was down 0.28 per cent at 8,777.30 as of 6:04 GMT while the benchmark 30-stock Sensex was trading 0.24 per cent lower at 28,371.40.

On Monday, both the indexes hit their highest since late September.

Among the gainers, ITC Ltd rose to a record high. Government-owned Specified Undertaking Of The Unit Trust Of India sold a two-percent stake in the country&#39;s biggest cigarette maker via block deals.

Railway coach maker Titagarh Wagons Ltd rose as much as 7 per cent after getting a contract worth one billion rupees from the Ministry of Earth Sciences. ($14.84 million).

(Reuters)

Analysts expect the RBI to cut the repo rate by 25 basis points on Wednesday after December inflation hit a two-year low

Indian shares retreated on Tuesday from four-month highs hit in the previous session as investors stayed on the sidelines ahead of the Reserve Bank of India's policy meeting. Analysts expect the RBI to cut the repo rate by 25 basis points on Wednesday after December inflation hit a two-year low. But they warn it will be a close call since the central bank may even opt to maintain status quo until its next review in April. RBI may keep rates unchanged as it continues to assess the impact of the crackdown on high-value notes on inflation, some analysts said. Most Indian automakers were down, contributing to over three-fourths of Nifty's decline, with Tata Motors Ltd and Mahindra & Mahindra Ltd falling as much as 2.4 per cent and 1.7 per cent respectively. Banks have already slashed lending rates this year after deposits surged following the ban on high-denomination currency notes, reducing the need for further rate cuts. "I don't think that the RBI will cut interest rates this time," says Sangeeth V, an institutional sales trader with Paterson Securities. "Banks are already flush with funds post-demonetisation." The broader Nifty was down 0.28 per cent at 8,777.30 as of 6:04 GMT while the benchmark 30-stock Sensex was trading 0.24 per cent lower at 28,371.40. On Monday, both the indexes hit their highest since late September. Among the gainers, ITC Ltd rose to a record high. Government-owned Specified Undertaking Of The Unit Trust Of India sold a two-percent stake in the country's biggest cigarette maker via block deals. Railway coach maker Titagarh Wagons Ltd rose as much as 7 per cent after getting a contract worth one billion rupees from the Ministry of Earth Sciences. ($14.84 million). (Reuters)

Sensex, Nifty trade lower ahead of RBI policy meet

The rate-setting Monetary Policy Committee (MPC) today began its third review meeting amid mixed expectations of possible rate cut by the Reserve Bank of India.

Expert opinions were divided if the RBI Governor-led panel will recommend cut in interest rate by 0.25 per cent to give fillip to growth or maintain status quo because of inflationary pressure from rising oil prices.

Banks are flush with low cost deposits on account of demonetisation of high value currency notes of Rs 500 and 1,000, as a result of which their lending rates fell by up to 1 per cent last month.

Although banks and industry have been pitching for cut in benchmark repo rate (short-term lending rate), the six-member Monetary Policy Committee (MPC) headed by RBI Governor Urjit Patel may adopt a cautious approach on February 8, especially in view of spike in crude oil prices and growing protectionist sentiment with Donald Trump taking charge as the US President.

Oil (Brent) prices have risen to USD 56.8 per barrel, while President Trump has announced a host of protectionist measures which will impact the global economy, including India.

According to PNB Managing Director Usha Ananthasubramanian there is an all-round expectation of 25 basis points cut in interest rate.

However, the transmission has already taken place and the further rate cut would depend on how long this low cost deposits stays with the bank.

&quot;Most of the banks have already front-loaded rate cut and if need be there would be further rate cut,&quot; she said.

In Patel&#39;s first policy review as RBI Governor in October, which was also the maiden review of the MPC, the repo rate was reduced by 0.25 per cent to 6.25 per cent.

In the following policy meet in December, the repo rate was retained at 6.25 per cent. However, RBI has cut repo by 1.75 per cent since January 2015.

&quot;We are expecting 25 basis points cut in repo rate because macroeconomic factors like inflation, fiscal deficit are conducive for reduction. Given the growth-oriented budget, there is a widespread speculation that RBI would respond in the same spirit,&quot; Bank of Maharashtra Executive Director R K Gupta said.

There are expectations of 25 basis point rate cut as there is excess liquidity in the system, UCO Bank MD CEO R K Takkar said.

Bandhan Bank Chairman and Managing Director Chandra Shekhar Ghosh said that the RBI is unlikely to cut rate as banks are flush with funds.

According to industry body Ficci, the RBI is likely to maintain status quo in the upcoming monetary policy meet and cut rates in the first half of fiscal year 2017-18.

Rising for the fifth straight month, retail inflation or CPI quickened to 5.61 per cent in December, mainly on costlier vegetables and cereals, limiting the headroom for the RBI to lower rates.

However, WPI or wholesale inflation fell in December but the rate of decline at 0.73 per cent was the slowest in last one year as food prices shot up, indicating return of inflationary pressures.&nbsp;

(PTI)

Banks are flush with low-cost deposits on account of demonetisation as a result of which their lending rates fell by up to 1% last month

The rate-setting Monetary Policy Committee (MPC) today began its third review meeting amid mixed expectations of possible rate cut by the Reserve Bank of India. Expert opinions were divided if the RBI Governor-led panel will recommend cut in interest rate by 0.25 per cent to give fillip to growth or maintain status quo because of inflationary pressure from rising oil prices. Banks are flush with low cost deposits on account of demonetisation of high value currency notes of Rs 500 and 1,000, as a result of which their lending rates fell by up to 1 per cent last month. Although banks and industry have been pitching for cut in benchmark repo rate (short-term lending rate), the six-member Monetary Policy Committee (MPC) headed by RBI Governor Urjit Patel may adopt a cautious approach on February 8, especially in view of spike in crude oil prices and growing protectionist sentiment with Donald Trump taking charge as the US President. Oil (Brent) prices have risen to USD 56.8 per barrel, while President Trump has announced a host of protectionist measures which will impact the global economy, including India. According to PNB Managing Director Usha Ananthasubramanian there is an all-round expectation of 25 basis points cut in interest rate. However, the transmission has already taken place and the further rate cut would depend on how long this low cost deposits stays with the bank. "Most of the banks have already front-loaded rate cut and if need be there would be further rate cut," she said. In Patel's first policy review as RBI Governor in October, which was also the maiden review of the MPC, the repo rate was reduced by 0.25 per cent to 6.25 per cent. In the following policy meet in December, the repo rate was retained at 6.25 per cent. However, RBI has cut repo by 1.75 per cent since January 2015. "We are expecting 25 basis points cut in repo rate because macroeconomic factors like inflation, fiscal deficit are conducive for reduction. Given the growth-oriented budget, there is a widespread speculation that RBI would respond in the same spirit," Bank of Maharashtra Executive Director R K Gupta said. There are expectations of 25 basis point rate cut as there is excess liquidity in the system, UCO Bank MD CEO R K Takkar said. Bandhan Bank Chairman and Managing Director Chandra Shekhar Ghosh said that the RBI is unlikely to cut rate as banks are flush with funds. According to industry body Ficci, the RBI is likely to maintain status quo in the upcoming monetary policy meet and cut rates in the first half of fiscal year 2017-18. Rising for the fifth straight month, retail inflation or CPI quickened to 5.61 per cent in December, mainly on costlier vegetables and cereals, limiting the headroom for the RBI to lower rates. However, WPI or wholesale inflation fell in December but the rate of decline at 0.73 per cent was the slowest in last one year as food prices shot up, indicating return of inflationary pressures. (PTI)

RBI monetary policy review: Rising oil prices could dampen rate cut hopes

The chief of India&#39;s central bank, Urjit Patel, received support from the most unlikely quarter while he was being grilled by an opposition party leader Digvijay Singh during a meeting with the parliamentary committee about demonetisation on Wednesday.

When asked by Digvijay Singh, a member of the Congress party, as to whether there would be chaos when the withdrawal limit is removed, former prime minister Manmohan Singh, who is also a Congress member, told Patel that he need not answer that question.

The government yesterday (January&nbsp;17) raised the withdrawal limit from Rs 4,500 per day to Rs 10,000 per day, although the weekly limit remains Rs 24,000.

It was an unexpected show of support because Singh is not only a member of the same party as Digivijay Singh is, the renowned economist has in the past flayed the government&#39;s decision to scrap old banknotes as he believes the move will pare down India&#39;s economy by two percentage points.

During the Wednesday meeting, Patel, who is the governor of Reserve Bank of India, was chastised for not satisfactorily replying to questions regarding demonetisation, nearly three weeks after the deadline for people to exchange their old currency notes with new ones elapsed.

Saugata Roy, a member of the panel and a lawmaker affiliated to Trinamool Congress, said Patel was &quot;unable to tell us how much money (old currency) has come back to the banks&quot;.

One of the members of the standing committee of finance, wishing anonymity, confirmed to WION that when asked as to when the details would be available, the RBI officials replied that they were calculating at the moment and could not give a timeline to the committee.

The federal government had given the public time till December 30 to replace their old currency notes with new ones.

As of December 14, various media reports stated that the banks in India had received 80 per cent of the old bank notes amounting to Rs 12.44 lakh crores (roughly $184 billion).

But Patel did inform the quantum of amount infused into the economy. He said Rs 9.2 lakh crore (approximately $135 billion) worth of new currency notes has been injected back into the economy so far.

The Standing Committee of Finance, headed by Veerapa Moily, grilled the finance ministry officials and Patel for nearly two hours. Overall, the meeting lasted for four&nbsp;hours but Patel joined the briefing session in the second half.

When one of the members questioned Patel on the emphasis been given by the prime minister and finance minister on turning India into a cash-less economy, Patel replied: &quot;The demand will be met with supply and it is the prerogative of the Reserve Bank of India.&rdquo;

Government officials also informed the committee that demonetisation was a well thought-out decision and preparations were on since January 2016.

India&#39;s central bank had earlier given a seven-page reply that it received advisory instructions from the government to consider the government&#39;s plan to replace the hitherto currency notes.&nbsp;But several questions were raised when it came to light that the RBI had received the advisory on November 7, barely 24 hours before the government rolled out the nationwide scheme.

India&#39;s central bank came under a deluge of criticism as many felt that the institution&#39;s autonomy had been undermined. The theme of RBI&#39;s autonomy dominated the Wednesday meeting as well, with Patel fielding a raft of questions about the issue, another member of the panel told WION.&nbsp;

Meanwhile, WION has learnt that Patel will be summoned again either during the Budget Session (February 1) or just after it as a&nbsp;lot of questions remained pending due to paucity of time.&nbsp;

But problems&nbsp;don&#39;t end for Patel there as he is expected to depose before the Public Accounts Committee on January 20, where opposition parties are expected to ask him uncomfortable questions about how the decision on demonetisation was reached upon. The very debate on demonetisation and the RBI&#39;s autonomy has become extremely political as regional elections in five states of India are merely 20 days away.&nbsp;

(WION with inputs from ANI)

&nbsp;

The former premier told Urjit Patel that he need not answer the question when asked if there would be chaos once withdrawal limit is lifted

The chief of India's central bank, Urjit Patel, received support from the most unlikely quarter while he was being grilled by an opposition party leader Digvijay Singh during a meeting with the parliamentary committee about demonetisation on Wednesday. When asked by Digvijay Singh, a member of the Congress party, as to whether there would be chaos when the withdrawal limit is removed, former prime minister Manmohan Singh, who is also a Congress member, told Patel that he need not answer that question. The government yesterday (January 17) raised the withdrawal limit from Rs 4,500 per day to Rs 10,000 per day, although the weekly limit remains Rs 24,000. It was an unexpected show of support because Singh is not only a member of the same party as Digivijay Singh is, the renowned economist has in the past flayed the government's decision to scrap old banknotes as he believes the move will pare down India's economy by two percentage points. During the Wednesday meeting, Patel, who is the governor of Reserve Bank of India, was chastised for not satisfactorily replying to questions regarding demonetisation, nearly three weeks after the deadline for people to exchange their old currency notes with new ones elapsed. Saugata Roy, a member of the panel and a lawmaker affiliated to Trinamool Congress, said Patel was "unable to tell us how much money (old currency) has come back to the banks". One of the members of the standing committee of finance, wishing anonymity, confirmed to WION that when asked as to when the details would be available, the RBI officials replied that they were calculating at the moment and could not give a timeline to the committee. The federal government had given the public time till December 30 to replace their old currency notes with new ones. As of December 14, various media reports stated that the banks in India had received 80 per cent of the old bank notes amounting to Rs 12.44 lakh crores (roughly $184 billion). But Patel did inform the quantum of amount infused into the economy. He said Rs 9.2 lakh crore (approximately $135 billion) worth of new currency notes has been injected back into the economy so far. The Standing Committee of Finance, headed by Veerapa Moily, grilled the finance ministry officials and Patel for nearly two hours. Overall, the meeting lasted for four hours but Patel joined the briefing session in the second half. When one of the members questioned Patel on the emphasis been given by the prime minister and finance minister on turning India into a cash-less economy, Patel replied: "The demand will be met with supply and it is the prerogative of the Reserve Bank of India.” Government officials also informed the committee that demonetisation was a well thought-out decision and preparations were on since January 2016. India's central bank had earlier given a seven-page reply that it received advisory instructions from the government to consider the government's plan to replace the hitherto currency notes. But several questions were raised when it came to light that the RBI had received the advisory on November 7, barely 24 hours before the government rolled out the nationwide scheme. India's central bank came under a deluge of criticism as many felt that the institution's autonomy had been undermined. The theme of RBI's autonomy dominated the Wednesday meeting as well, with Patel fielding a raft of questions about the issue, another member of the panel told WION. Meanwhile, WION has learnt that Patel will be summoned again either during the Budget Session (February 1) or just after it as a lot of questions remained pending due to paucity of time. But problems don't end for Patel there as he is expected to depose before the Public Accounts Committee on January 20, where opposition parties are expected to ask him uncomfortable questions about how the decision on demonetisation was reached upon. The very debate on demonetisation and the RBI's autonomy has become extremely political as regional elections in five states of India are merely 20 days away. (WION with inputs from ANI)

Demonetisation: Ex-PM Manmohan Singh comes to central bank chief's help

Countries with higher public debt levels like India should continue to implement their medium-term plans to reduce debt and deficits, an IMF official has said.

&quot;Countries with higher public debt levels, like India, should continue to implement their medium-term plans to reduce debt and deficits. Japan and Malaysia should develop plans in these areas,&quot; IMF deputy managing director Zhang Tao said in his address at the Asian Financial Forum, Hong Kong.

&quot;Asia continues to lead global growth. We expect the economies in the region to grow above 5 per cent both in 2017 and 2018, compared with around three-and-a-half per cent for the world in the next two years,&quot; an IMF statement quoted Tao as saying.

Noting that Asia overall managed well the market surprises in 2016, and Asian financial markets were resilient for most of the year, Tao said Asia is expected to continue to make the largest contribution to growth in the world, by generating around two thirds of global growth.

Yesterday, IMF cut India&#39;s growth rate for the current fiscal year to 6.6 per cent from its previous estimate of 7.6 per cent due to the &quot;temporary negative consumption shock&quot; of demonetisation, days after the World Bank also decelerated India&#39;s growth estimates.&nbsp;

(PTI)

The IMF official said that countries like India with higher public debt should continue with their plans to reduce debt and deficits

Countries with higher public debt levels like India should continue to implement their medium-term plans to reduce debt and deficits, an IMF official has said. "Countries with higher public debt levels, like India, should continue to implement their medium-term plans to reduce debt and deficits. Japan and Malaysia should develop plans in these areas," IMF deputy managing director Zhang Tao said in his address at the Asian Financial Forum, Hong Kong. "Asia continues to lead global growth. We expect the economies in the region to grow above 5 per cent both in 2017 and 2018, compared with around three-and-a-half per cent for the world in the next two years," an IMF statement quoted Tao as saying. Noting that Asia overall managed well the market surprises in 2016, and Asian financial markets were resilient for most of the year, Tao said Asia is expected to continue to make the largest contribution to growth in the world, by generating around two thirds of global growth. Yesterday, IMF cut India's growth rate for the current fiscal year to 6.6 per cent from its previous estimate of 7.6 per cent due to the "temporary negative consumption shock" of demonetisation, days after the World Bank also decelerated India's growth estimates. (PTI)

Countries with higher public debt levels should bring it down, says IMF deputy managing director

The Reserve Bank of India (RBI) increased the daily cash withdrawal limit from Rs 4,500 to Rs 10,000 ($146.84) from ATMs on Monday, effective immediately.&nbsp;

The central bank also increased the withdrawal limit&nbsp;from current accounts to Rs 100,000 per week from Rs 50,000, and will also include overdraft as well as cash credit accounts. However, the overall weekly withdrawal limit of Rs 24,000&nbsp;per card will remain the same.&nbsp;

After demonetisation, the withdrawal limit had been set at Rs 2,500 per day and per&nbsp;card, and was increased to Rs 4,500 on January 1.&nbsp;

According to analysts, the withdrawal limits are likely to remain in place until the RBI is able to supply a sufficient amount of notes.&nbsp;

(WION with inputs from Reuters)

&nbsp;

The Reserve Bank of India hiked the daily withdrawal limit from Rs 4,500 to Rs 10,000, but the weekly limit remains at Rs 24,000 per card

The Reserve Bank of India (RBI) increased the daily cash withdrawal limit from Rs 4,500 to Rs 10,000 ($146.84) from ATMs on Monday, effective immediately. The central bank also increased the withdrawal limit from current accounts to Rs 100,000 per week from Rs 50,000, and will also include overdraft as well as cash credit accounts. However, the overall weekly withdrawal limit of Rs 24,000 per card will remain the same. After demonetisation, the withdrawal limit had been set at Rs 2,500 per day and per card, and was increased to Rs 4,500 on January 1. According to analysts, the withdrawal limits are likely to remain in place until the RBI is able to supply a sufficient amount of notes. (WION with inputs from Reuters)

Demonetisation: Cash withdrawal limit increased to Rs 10,000

Inflation in India is expected to have cooled to a two-year low in December as the government&#39;s surprise currency crackdown rattled the economy and severely hurt consumption, a Reuters poll found.

Retail inflation likely eased to 3.57 per cent from a year earlier, from 3.63 per cent in November, the poll of over 30 economists showed.

That would be the lowest since November 2014, and well below the Reserve Bank of India&#39;s near-term target of 5 per cent by March 2017.

Prime Minister Narendra Modi&#39;s decision on November 8 to outlaw high-value banknotes, aimed at curbing corruption and tax evasion, has forced the nation&#39;s 1.2 billion people to scramble to exchange old notes for new and left many companies&#39; cash-reliant supply chains in tatters.

The government insists the impact from the move will be short-lived, but many private economists are trimming their GDP forecasts, reckoning it will linger for one more year.

&quot;We expect headline CPI inflation to fall, primarily due to a significant sequential fall in the prices of several food items and many other perishables on account of the cash crunch created by demonetisation,&quot; said Rupa Rege Nitsure, group chief economist at L&amp;T Financial Services in Mumbai.

India&#39;s central bank unexpectedly left its repo rate unchanged at 6.25 per cent last month, saying the blow from the cash squeeze may be transitory and expressing concern over the rising risk of inflation from higher global oil prices.

If inflation remains below the near-term target, it will give the central bank room to make a rate cut at its next meeting on February 8.

Industrial output likely accelerated 1.3 per cent in November from a year ago, after falling 1.9 per cent in October, the poll also forecast.

&quot;The impact of the demonetisation drive will be better reflected in weak December readings,&quot; wrote Radhika Rao, an&nbsp;economist at DBS Bank, in a note.

&quot;Subdued capital goods output is likely to be accompanied by a slow patch in consumer durables and non-durables production as inventories build on slower demand.&quot;

Wholesale price inflation is expected to have picked up last month to 3.50 per cent from 3.15 per cent in November, according to the poll.

(Reuters)

Retail inflation likely eased to 3.57 per cent from a year earlier, from 3.63 per cent in November, the poll of over 30 economists showed

Inflation in India is expected to have cooled to a two-year low in December as the government's surprise currency crackdown rattled the economy and severely hurt consumption, a Reuters poll found. Retail inflation likely eased to 3.57 per cent from a year earlier, from 3.63 per cent in November, the poll of over 30 economists showed. That would be the lowest since November 2014, and well below the Reserve Bank of India's near-term target of 5 per cent by March 2017. Prime Minister Narendra Modi's decision on November 8 to outlaw high-value banknotes, aimed at curbing corruption and tax evasion, has forced the nation's 1.2 billion people to scramble to exchange old notes for new and left many companies' cash-reliant supply chains in tatters. The government insists the impact from the move will be short-lived, but many private economists are trimming their GDP forecasts, reckoning it will linger for one more year. "We expect headline CPI inflation to fall, primarily due to a significant sequential fall in the prices of several food items and many other perishables on account of the cash crunch created by demonetisation," said Rupa Rege Nitsure, group chief economist at L&T Financial Services in Mumbai. India's central bank unexpectedly left its repo rate unchanged at 6.25 per cent last month, saying the blow from the cash squeeze may be transitory and expressing concern over the rising risk of inflation from higher global oil prices. If inflation remains below the near-term target, it will give the central bank room to make a rate cut at its next meeting on February 8. Industrial output likely accelerated 1.3 per cent in November from a year ago, after falling 1.9 per cent in October, the poll also forecast. "The impact of the demonetisation drive will be better reflected in weak December readings," wrote Radhika Rao, an economist at DBS Bank, in a note. "Subdued capital goods output is likely to be accompanied by a slow patch in consumer durables and non-durables production as inventories build on slower demand." Wholesale price inflation is expected to have picked up last month to 3.50 per cent from 3.15 per cent in November, according to the poll. (Reuters)

India: Inflation seen cooling to two-year low in December as cash crunch hit demand

As the 50-day window to deposit scrapped higher denomination notes in banks ended today, less rush was witnessed at various city banks.

A senior executive with a private sector bank said only few people visited their branch in South Mumbai here today on the last day&nbsp;of depositing old Rs 500 and Rs 1,000 notes as compared to the initial days of demonetisation.

&quot;Situation from last one week is just like any other regular day at the bank,&quot; he said.

&quot;I deposited all my savings in the first two weeks after demonetisation was announced. I wish I would have been more patient and&nbsp;deposited it in the last few days as there is no rush at my nearest bank branch,&quot; Ghatkopar resident Shyamlal Dhulia said.

Meanwhile, queues to withdraw cash also truncated as many ATMs continued to remain shut.

Dhulia said three ATMs in the vicinity of his house have been functioning intermittently in the last one month.

Juhu-based entrepreneur Sunil Sharma said panic among people during the initial days (of demonetisation) had led customers&nbsp;rushing to banks and deposit their money.

&quot;Honest tax payers should have been provided with some arrangement or should have been given preferential treatment to deposit&nbsp;or exchange their cash,&quot; he said.

A grocery shop owner in suburban Andheri said, &quot;Though there is no maddening queues outside ATMs, but cash crunch still persists, specifically for current account holders.&quot;

Nagesh Dubey, a chartered accountant, said the step will prove to be beneficial in the long run and that it was needed for the&nbsp;overhaul the currency management.

&quot;The demonetisation process is going to overhaul the entire currency management and will also bring unaccounted money into the system which will provide a road-map to the government to launch and execute developmental projects. This is going to be beneficial in the long run.&quot;&nbsp; 
 
(PTI)

Queues to withdraw cash also truncated as many ATMs continued to remain shut.

As the 50-day window to deposit scrapped higher denomination notes in banks ended today, less rush was witnessed at various city banks. A senior executive with a private sector bank said only few people visited their branch in South Mumbai here today on the last day of depositing old Rs 500 and Rs 1,000 notes as compared to the initial days of demonetisation. "Situation from last one week is just like any other regular day at the bank," he said. "I deposited all my savings in the first two weeks after demonetisation was announced. I wish I would have been more patient and deposited it in the last few days as there is no rush at my nearest bank branch," Ghatkopar resident Shyamlal Dhulia said. Meanwhile, queues to withdraw cash also truncated as many ATMs continued to remain shut. Dhulia said three ATMs in the vicinity of his house have been functioning intermittently in the last one month. Juhu-based entrepreneur Sunil Sharma said panic among people during the initial days (of demonetisation) had led customers rushing to banks and deposit their money. "Honest tax payers should have been provided with some arrangement or should have been given preferential treatment to deposit or exchange their cash," he said. A grocery shop owner in suburban Andheri said, "Though there is no maddening queues outside ATMs, but cash crunch still persists, specifically for current account holders." Nagesh Dubey, a chartered accountant, said the step will prove to be beneficial in the long run and that it was needed for the overhaul the currency management. "The demonetisation process is going to overhaul the entire currency management and will also bring unaccounted money into the system which will provide a road-map to the government to launch and execute developmental projects. This is going to be beneficial in the long run." (PTI)

Demonetisation: No mad rush in banks on last day of depositing old notes

The Indian government has appointed Viral V. Acharya, a professor of economics at New York University, as one of the Reserve Bank of India&#39;s four deputy governors for a term of three years, according to a statement on Wednesday.

The RBI had a vacancy for deputy governor after Urjit Patel was promoted to the post of governor earlier this year.

The statement did not mention which portfolio Acharya would be assigned. Patel had headed the prestigious monetary policy, which is now overseen by RBI Deputy Governor R. Gandhi as part of a widened remit.

Acharya teaches at the Stern School of Business in New York university. According to his resume, he has research interests in regulation of banks, corporate finance, credit risk and asset pricing.

&nbsp;

(Reuters)

Acharya is a professor at the Stern School of Business and will be one of the four deputy governors of the RBI

The Indian government has appointed Viral V. Acharya, a professor of economics at New York University, as one of the Reserve Bank of India's four deputy governors for a term of three years, according to a statement on Wednesday. The RBI had a vacancy for deputy governor after Urjit Patel was promoted to the post of governor earlier this year. The statement did not mention which portfolio Acharya would be assigned. Patel had headed the prestigious monetary policy, which is now overseen by RBI Deputy Governor R. Gandhi as part of a widened remit. Acharya teaches at the Stern School of Business in New York university. According to his resume, he has research interests in regulation of banks, corporate finance, credit risk and asset pricing. (Reuters)

Viral Acharya appointed deputy governor of Reserve Bank of India

The Reserve Bank of India&nbsp;has modified&nbsp;old currency deposit rules once again,&nbsp;Know-Your-Customer (KYC) compliant account holders can now deposit over Rs 5,000 without any questions asked.

RBI had said on Monday old notes exceeding Rs 5,000 can be deposited only once per account till December 30. It said that the depositor will also have to give an explanation as to why the old notes were not deposited earlier, according to PTI.&nbsp;

RBI added that the explanation should be kept on record to facilitate an audit trail at a later stage.&nbsp;

Further, RBI said that even if deposits are below Rs 5,000, if the cumulative deposit exceeds Rs 5,000, &quot;they may be subject to the procedure to be followed in case of tenders above Rs 5,000&quot;.&nbsp;

RBI also said that deposits above Rs 5,000 can be credited only into KYC-compliant accounts and &quot;if the accounts are not KYC compliant credits may be restricted up to Rs 50,000 subject to the conditions governing the conduct of such accounts&quot;, PTI reports.

However, RBI has said that the restrictions shall not apply to deposits under the Pradhan Mantri Garib Kalyan scheme, 2016.

&quot;It has been decided to place certain restrictions on deposits of specified bank notes into bank accounts while encouraging the deposits of the same under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016,&quot; RBI said in a notification.

Under the scheme, black money holders can deposit unaccounted cash in an account which will be subject to 50 per cent tax, which breaks down into 30 per cent&nbsp;tax, 33 per cent&nbsp;surcharge and 10 per cent&nbsp;penalty, and 4-year interest-free lock-in for the remaining 25 per cent of the amount.

(WION with inputs from PTI)

&nbsp;

Know-Your-Customer (KYC) compliant account holders can now deposit over Rs 5000 without any questions asked

The Reserve Bank of India has modified old currency deposit rules once again, Know-Your-Customer (KYC) compliant account holders can now deposit over Rs 5,000 without any questions asked. RBI had said on Monday old notes exceeding Rs 5,000 can be deposited only once per account till December 30. It said that the depositor will also have to give an explanation as to why the old notes were not deposited earlier, according to PTI. RBI added that the explanation should be kept on record to facilitate an audit trail at a later stage. Further, RBI said that even if deposits are below Rs 5,000, if the cumulative deposit exceeds Rs 5,000, "they may be subject to the procedure to be followed in case of tenders above Rs 5,000". RBI also said that deposits above Rs 5,000 can be credited only into KYC-compliant accounts and "if the accounts are not KYC compliant credits may be restricted up to Rs 50,000 subject to the conditions governing the conduct of such accounts", PTI reports. However, RBI has said that the restrictions shall not apply to deposits under the Pradhan Mantri Garib Kalyan scheme, 2016. "It has been decided to place certain restrictions on deposits of specified bank notes into bank accounts while encouraging the deposits of the same under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016," RBI said in a notification. Under the scheme, black money holders can deposit unaccounted cash in an account which will be subject to 50 per cent tax, which breaks down into 30 per cent tax, 33 per cent surcharge and 10 per cent penalty, and 4-year interest-free lock-in for the remaining 25 per cent of the amount. (WION with inputs from PTI)

Demonetisation: Reserve Bank of India changes old currency deposit rules for 60th time

The Reserve Bank of India has imposed restrictions on the amount of scrapped 500 and 1,000 rupee notes that can be deposited in bank accounts, news agency Press Trust of India reports.

RBI said on Monday old notes exceeding Rs 5,000 can be deposited only once per account till December 30. It said that the depositor will also have to give an explanation as to why the old notes were not deposited earlier, according to PTI.&nbsp;

RBI added that the explanation should be kept on record to facilitate an audit trail at a later stage.&nbsp;

Further, RBI said that even if deposits are below Rs 5,000, if the cumulative deposit exceeds Rs 5000, &quot;they may be subject to the procedure to be followed in case of tenders above Rs 5000&quot;.&nbsp;

RBI also said that deposits above Rs 5,000 can be credited only into KYC-compliant accounts and &quot;if the accounts are not KYC compliant credits may be restricted up to Rs 50,000 subject to the conditions governing the conduct of such accounts&quot;, PTI reports.

However, RBI has said that the restrictions shall not apply to deposits under the Pradhan Mantri Garib Kalyan scheme, 2016.

&quot;It has been decided to place certain restrictions on deposits of specified bank notes into bank accounts while encouraging the deposits of the same under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016,&quot; RBI said in a notification.

Under the scheme, black money holders can deposit unaccounted cash in an account which will be subject to 50 per cent tax, which breaks down into 30% tax, 33% surcharge and 10% penalty, and 4-year interest-free lock-in for the remaining 25 per cent of the amount.

(WION with inputs from PTI)

The RBI said people will also have to explain why the demonetised 500- and 1,000-rupee notes have not been deposited so far

The Reserve Bank of India has imposed restrictions on the amount of scrapped 500 and 1,000 rupee notes that can be deposited in bank accounts, news agency Press Trust of India reports. RBI said on Monday old notes exceeding Rs 5,000 can be deposited only once per account till December 30. It said that the depositor will also have to give an explanation as to why the old notes were not deposited earlier, according to PTI. RBI added that the explanation should be kept on record to facilitate an audit trail at a later stage. Further, RBI said that even if deposits are below Rs 5,000, if the cumulative deposit exceeds Rs 5000, "they may be subject to the procedure to be followed in case of tenders above Rs 5000". RBI also said that deposits above Rs 5,000 can be credited only into KYC-compliant accounts and "if the accounts are not KYC compliant credits may be restricted up to Rs 50,000 subject to the conditions governing the conduct of such accounts", PTI reports. However, RBI has said that the restrictions shall not apply to deposits under the Pradhan Mantri Garib Kalyan scheme, 2016. "It has been decided to place certain restrictions on deposits of specified bank notes into bank accounts while encouraging the deposits of the same under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016," RBI said in a notification. Under the scheme, black money holders can deposit unaccounted cash in an account which will be subject to 50 per cent tax, which breaks down into 30% tax, 33% surcharge and 10% penalty, and 4-year interest-free lock-in for the remaining 25 per cent of the amount. (WION with inputs from PTI)

Demonetisation: Old notes worth more than Rs 5,000 can now be deposited only once till Dec 30

Taking markets by surprise, RBI Governor Urjit Patel today kept short term lending rate unchanged even as the central bank lowered GDP growth rate to 7.1 per cent and short term disruption in economic activities due to demonetisation.

Patel-led 6-member Monetary Policy Committee, which had in its first policy review cut interest rate by 0.25 per cent in October, belied expectations to keep benchmark repo rate unchanged at 6.25 per cent unanimously.

In view of disruption in economic activities due to demonetisation, RBI lowered growth forecast from 7.6 per cent to 7.1 per cent for the current fiscal.

The headline inflation is projected at 5 per cent by the fourth quarter of 2016-17 with risks tilted to the upside but lower than in the October policy review.

The fuller effects of the house rent allowances under the Seventh Pay Commission award are yet to be assessed, pending implementation, and have not been reckoned in this baseline inflation path, the fifth bi-monthly monthly monetary policy said.

On demonetisation, it said, the withdrawal of old high value currency notes could transiently interrupt some part of industrial activity in November-December due to delays in payments of wages and purchases of inputs, although a fuller assessment is awaited.

&quot;In the services sector, the outlook is mixed with construction, trade, transport, hotels and communication impacted by temporary old currency notes effects, while public administration, defence and other services would continue to be buoyed by the 7th Central Pay Commission (CPC) award and one rank one pension (OROP),&quot; it added.

The central bank also said that almost Rs 12 lakh crore out of total Rs 14.5 lakh crore in scrapped notes have already been deposited in banks.

RBI has also withdraw 100 per cent incremental Cash Reserve Ratio (CRR) from December 10, a move that would allow banks to retain the deposits coming to them as part of demonetisation.

All the six members of Monetary Policy Committee headed by the RBI Governor voted in favour of the today&#39;s decision. 
In the view of the Committee, this bi-monthly review is set against the backdrop of heightened uncertainty.

&quot;Globally, the imminent tightening of monetary policy in the US is triggering bouts of high volatility in financial markets, with the possibility of large spillovers that could have macroeconomic implications for emerging markets,&quot; it said.

While supply disruptions in the backdrop of currency replacement may drag down growth this year in India, it is important to analyse more information and experience before judging their full effects and their persistence, RBI said, adding that short-term developments that influence the outlook disproportionately warrant caution with respect to setting the monetary policy stance.

&quot;On balance, therefore, it is prudent to wait and watch how these factors play out and impinge upon the outlook. Accordingly, the policy repo rate has been kept on hold in this review, while retaining an accommodative policy stance,&quot; it said.&nbsp;

 
Highlights of RBI&#39;s fifth bi-monthly monetary policy statement, 2016-17:

<ul>
	<li>&nbsp;Repo rate unchanged at 6.25%, Reverse Repo at 5.75%</li>
	<li>&nbsp;Cash reserve ratio or CRR unchanged at 4%</li>
	<li>&nbsp;Cuts growth forecast to 7.1%, from 7.6% for this fiscal</li>
	<li>&nbsp;Inflation target remains 5% for March 2017, upside risk</li>
	<li>&nbsp;Demonetisation to lower prices of perishables</li>
	<li>Could reduce inflation by 10-15 basis points by December</li>
	<li>&nbsp;All MPC members voted in favour of status quo in policy</li>
	<li>&nbsp;Demonetisation to result in short-run disruptions in Cash-intensive sectors</li>
	<li>Crude price volatility, surge in financial market</li>
	<li>Turbulence could put March end inflation target at risk</li>
	<li>&nbsp;Foreign exchange reserve rose to all-time high of</li>
	<li>USD 364 billion on December 2</li>
	<li>&nbsp;RBI injected Rs 1.1 lakh crore liquidity through OMO purchases this fiscal</li>
	<li>Next monetary policy on February 8</li>
</ul>

(PTI)

The RBI's monetary policy committee voted 6-0 to leave the repo rate unchanged, after cutting it by 25 basis points (bps) last October

Taking markets by surprise, RBI Governor Urjit Patel today kept short term lending rate unchanged even as the central bank lowered GDP growth rate to 7.1 per cent and short term disruption in economic activities due to demonetisation. Patel-led 6-member Monetary Policy Committee, which had in its first policy review cut interest rate by 0.25 per cent in October, belied expectations to keep benchmark repo rate unchanged at 6.25 per cent unanimously. In view of disruption in economic activities due to demonetisation, RBI lowered growth forecast from 7.6 per cent to 7.1 per cent for the current fiscal. The headline inflation is projected at 5 per cent by the fourth quarter of 2016-17 with risks tilted to the upside but lower than in the October policy review. The fuller effects of the house rent allowances under the Seventh Pay Commission award are yet to be assessed, pending implementation, and have not been reckoned in this baseline inflation path, the fifth bi-monthly monthly monetary policy said. On demonetisation, it said, the withdrawal of old high value currency notes could transiently interrupt some part of industrial activity in November-December due to delays in payments of wages and purchases of inputs, although a fuller assessment is awaited. "In the services sector, the outlook is mixed with construction, trade, transport, hotels and communication impacted by temporary old currency notes effects, while public administration, defence and other services would continue to be buoyed by the 7th Central Pay Commission (CPC) award and one rank one pension (OROP)," it added. The central bank also said that almost Rs 12 lakh crore out of total Rs 14.5 lakh crore in scrapped notes have already been deposited in banks. RBI has also withdraw 100 per cent incremental Cash Reserve Ratio (CRR) from December 10, a move that would allow banks to retain the deposits coming to them as part of demonetisation. All the six members of Monetary Policy Committee headed by the RBI Governor voted in favour of the today's decision. In the view of the Committee, this bi-monthly review is set against the backdrop of heightened uncertainty. "Globally, the imminent tightening of monetary policy in the US is triggering bouts of high volatility in financial markets, with the possibility of large spillovers that could have macroeconomic implications for emerging markets," it said. While supply disruptions in the backdrop of currency replacement may drag down growth this year in India, it is important to analyse more information and experience before judging their full effects and their persistence, RBI said, adding that short-term developments that influence the outlook disproportionately warrant caution with respect to setting the monetary policy stance. "On balance, therefore, it is prudent to wait and watch how these factors play out and impinge upon the outlook. Accordingly, the policy repo rate has been kept on hold in this review, while retaining an accommodative policy stance," it said. Highlights of RBI's fifth bi-monthly monetary policy statement, 2016-17: Repo rate unchanged at 6.25%, Reverse Repo at 5.75% Cash reserve ratio or CRR unchanged at 4% Cuts growth forecast to 7.1%, from 7.6% for this fiscal Inflation target remains 5% for March 2017, upside risk Demonetisation to lower prices of perishables Could reduce inflation by 10-15 basis points by December All MPC members voted in favour of status quo in policy Demonetisation to result in short-run disruptions in Cash-intensive sectors Crude price volatility, surge in financial market Turbulence could put March end inflation target at risk Foreign exchange reserve rose to all-time high of USD 364 billion on December 2 RBI injected Rs 1.1 lakh crore liquidity through OMO purchases this fiscal Next monetary policy on February 8 (PTI)

Reserve Bank of India keeps repo rate unchanged at 6.25%

By Saurabh Goenka

How would you feel if a friend whom you owed money never took it back? Let&#39;s say Rs 10,000.&nbsp;

Now, how would you feel if that amount were Rs 3 lakh crore?&nbsp;

That could happen to the Reserve Bank of India on December 30, the last date to deposit old Rs 500 and 1,000 notes. According to the RBI, before demonetisation, the now-old Rs 500 and 1,000 notes added up to a total of Rs 14 lakh crore. Till November 28, only Rs 8 lakh crore in old notes were deposited in banks. It is further expected that not more than another Rs 3 lakh crore in old notes will be deposited by December 30, the last date to do so.&nbsp;

That leaves Rs 3 lakh crore worth of old notes that might never be exchanged for new. &nbsp;

Should that happen, the RBI will become richer by Rs 3 lakh crore, since it will then not be obliged to pay the persons holding the old notes.&nbsp;

Before moving on to an example, let&rsquo;s check the definition of a currency note.&nbsp;

A currency note is a &quot;promissory&quot; note or bill issued by a country&#39;s central bank. Promissory means implying a promise. The currency we use as money then is basically a piece of paper, but backed by the RBI with the promise of paying the person holding the note the value of the note. (Bear with me.)&nbsp;

Now the example:

Let&#39;s say Mohan goes to his friend Sohan&rsquo;s shop and picks up a cellphone for Rs 2,000.&nbsp;

But he currently does not have the money to pay for it. Sohan agrees to take the Rs 2,000 from him two months later and makes Mohan write on a piece of paper that he will pay anybody who holds the paper Rs 2,000 after two months.&nbsp;

A few days later, Sohan has to pay the wholesaler Mr Mukesh Rs 10,000. Sohan pays him Rs 8,000 in cash and hands over the paper signed by Mohan (promising Rs 2,000). Mukesh can now take this &quot;promissory note&quot; and collect Rs 2,000 from Mohan on the specified date (two months later) or use it to further &quot;pay&quot; someone else.

In the Indian economy, the RBI undertakes this &quot;promise&quot;.&nbsp;

Take out any note from your wallet and check for yourself. For example, take out a 100-rupee note and read what is written on it above the RBI governor&rsquo;s signature. It says: &quot;I promise to pay the bearer the sum of one hundred rupees&quot;.&nbsp;

Now say Sohan does not use the paper signed by Mohan, nor does he pass it on to anybody else. In that case, in two months, Mohan becomes richer by Rs 2,000.&nbsp;

Exactly the same thing -- albeit on a much, much larger case -- could happen with the RBI and the old currency notes. The Rs 3 lakh crore that might not&nbsp;be deposited with the banks will no longer have to be backed up by the RBI, making it richer by that much.&nbsp;

A Rs 3 lakh crore windfall!&nbsp;

What will happen with all this money?

The RBI will transfer it to the government of India in the form of dividend. This will in turn reduce the government&rsquo;s budgetary deficits; in simple terms, the government could use the money to pay for public expenditure, ie build roads and hospitals, add to its rail network, etc etc.

Would the public benefit from this?

Yes of course. Greater government expenditure on public infrastructure would mean better facilities for the public. Plus, the actual building and running of this infrastructure would create more jobs -- possibly offsetting any loss of jobs and recessionary trends witnessed in the immediate aftermath of the demonetisation. All this potential infrastructure building will require raw material to feed it, which would mean more production, which in turn could mean a possibly higher GDP.&nbsp;

(WION)

It is expected old Rs 500 and 1,000 notes worth that much will never be exchanged, in turn making the RBI richer by that much. Here's how

By Saurabh Goenka How would you feel if a friend whom you owed money never took it back? Let's say Rs 10,000. Now, how would you feel if that amount were Rs 3 lakh crore? That could happen to the Reserve Bank of India on December 30, the last date to deposit old Rs 500 and 1,000 notes. According to the RBI, before demonetisation, the now-old Rs 500 and 1,000 notes added up to a total of Rs 14 lakh crore. Till November 28, only Rs 8 lakh crore in old notes were deposited in banks. It is further expected that not more than another Rs 3 lakh crore in old notes will be deposited by December 30, the last date to do so. That leaves Rs 3 lakh crore worth of old notes that might never be exchanged for new. Should that happen, the RBI will become richer by Rs 3 lakh crore, since it will then not be obliged to pay the persons holding the old notes. Before moving on to an example, let’s check the definition of a currency note. A currency note is a "promissory" note or bill issued by a country's central bank. Promissory means implying a promise. The currency we use as money then is basically a piece of paper, but backed by the RBI with the promise of paying the person holding the note the value of the note. (Bear with me.) Now the example: Let's say Mohan goes to his friend Sohan’s shop and picks up a cellphone for Rs 2,000. But he currently does not have the money to pay for it. Sohan agrees to take the Rs 2,000 from him two months later and makes Mohan write on a piece of paper that he will pay anybody who holds the paper Rs 2,000 after two months. A few days later, Sohan has to pay the wholesaler Mr Mukesh Rs 10,000. Sohan pays him Rs 8,000 in cash and hands over the paper signed by Mohan (promising Rs 2,000). Mukesh can now take this "promissory note" and collect Rs 2,000 from Mohan on the specified date (two months later) or use it to further "pay" someone else. In the Indian economy, the RBI undertakes this "promise". Take out any note from your wallet and check for yourself. For example, take out a 100-rupee note and read what is written on it above the RBI governor’s signature. It says: "I promise to pay the bearer the sum of one hundred rupees". Now say Sohan does not use the paper signed by Mohan, nor does he pass it on to anybody else. In that case, in two months, Mohan becomes richer by Rs 2,000. Exactly the same thing -- albeit on a much, much larger case -- could happen with the RBI and the old currency notes. The Rs 3 lakh crore that might not be deposited with the banks will no longer have to be backed up by the RBI, making it richer by that much. A Rs 3 lakh crore windfall! What will happen with all this money? The RBI will transfer it to the government of India in the form of dividend. This will in turn reduce the government’s budgetary deficits; in simple terms, the government could use the money to pay for public expenditure, ie build roads and hospitals, add to its rail network, etc etc. Would the public benefit from this? Yes of course. Greater government expenditure on public infrastructure would mean better facilities for the public. Plus, the actual building and running of this infrastructure would create more jobs -- possibly offsetting any loss of jobs and recessionary trends witnessed in the immediate aftermath of the demonetisation. All this potential infrastructure building will require raw material to feed it, which would mean more production, which in turn could mean a possibly higher GDP. (WION)

Demonetisation: RBI could get Rs 3 lakh crore richer, as could the government

The Reserve Bank of India (RBI) on Sunday announced it would be printing new Rs 20 and Rs 50 notes in the Mahatma Gandhi 2005 series.&nbsp;

Both notes will have numerals in ascending size in the number panels and without intaglio printing. They will bear the signature of RBI Governor Urijit Patel

India&#39;s central bank has also announced that Rs 20 and Rs 50 notes issued in the past will continue to be legal.

The RBI took the decision following the shortfall in currency which has gripped the nation and left people inconvenienced following the Narendra Modi-led BJP government&#39;s decision to demonetise Rs 500 and Rs 1000 notes on November 8.

The new Rs 20 notes will have the inset letter &#39;L&#39; in both number panels, while the Rs 50 currency will be without the letter. The year &#39;2016&#39; will be printed on the reverse of the banknotes.

&quot;The Reserve Bank of India will shortly issue Rs 20 denomination banknotes in the Mahatma Gandhi Series-2005, with inset letter L in both the number panels, bearing signature of Dr Urjit R Patel, Governor, Reserve Bank of India, and the year of printing &#39;2016&#39; printed on the reverse of the banknote,&quot; RBI said in a statement.&quot; RBI said about the Rs 20 notes in a press release.

&quot;The Reserve Bank will shortly issue Rs 50 denomination banknotes in the Mahatma Gandhi Series-2005, without inset letter in both the number panels, bearing signature of Dr Urjit R Patel, Governor, Reserve Bank of India, and the year of printing &#39;2016&#39; printed on the reverse of the banknote,&quot;&nbsp;the central bank about the design of the Rs 50 currency.

(WION)&nbsp;

 
&nbsp;

The RBI has taken the decision following the shortfall in currency after the demonetisation of Rs 500 and Rs 1000 notes last month

The Reserve Bank of India (RBI) on Sunday announced it would be printing new Rs 20 and Rs 50 notes in the Mahatma Gandhi 2005 series. Both notes will have numerals in ascending size in the number panels and without intaglio printing. They will bear the signature of RBI Governor Urijit Patel India's central bank has also announced that Rs 20 and Rs 50 notes issued in the past will continue to be legal. The RBI took the decision following the shortfall in currency which has gripped the nation and left people inconvenienced following the Narendra Modi-led BJP government's decision to demonetise Rs 500 and Rs 1000 notes on November 8. The new Rs 20 notes will have the inset letter 'L' in both number panels, while the Rs 50 currency will be without the letter. The year '2016' will be printed on the reverse of the banknotes. "The Reserve Bank of India will shortly issue Rs 20 denomination banknotes in the Mahatma Gandhi Series-2005, with inset letter L in both the number panels, bearing signature of Dr Urjit R Patel, Governor, Reserve Bank of India, and the year of printing '2016' printed on the reverse of the banknote," RBI said in a statement." RBI said about the Rs 20 notes in a press release. "The Reserve Bank will shortly issue Rs 50 denomination banknotes in the Mahatma Gandhi Series-2005, without inset letter in both the number panels, bearing signature of Dr Urjit R Patel, Governor, Reserve Bank of India, and the year of printing '2016' printed on the reverse of the banknote," the central bank about the design of the Rs 50 currency. (WION)

Demonetisation: India's central bank to print new Rs 20, Rs 50 notes

As the cash crunch at bank branches across India continues to persist, the Indian government has further scaled up the printing of new 500 rupee notes, The Times of India reports.

Four currency printing presses --&nbsp;two owned by Reserve Bank of India at Mysuru and Salboni&nbsp;and two government-owned ones at Nashik and Devas, which were operating two shifts --&nbsp;have now started working three shifts, sources told The Times of India.&nbsp;

The focus now is on augmenting the supply of Rs 500 notes, the sources said.

&quot;Supply to other banks will definitely improve. We are airlifting 500 rupee notes. There will be some pressure initially but in the next few days it will ease,&quot; a government source told TOI.

With the RBI increasing the supply of cash, the position in bank branches and ATMs of large lenders is expected to improve substantially on Thursday.&nbsp;

Banks will be using the money to make available funds in centres where they have a&nbsp;large number of salary accounts, TOI said in its report.

ATMs loaded with Rs 100 notes run out of money quickly because the machines only have space to hold&nbsp;so many notes,&nbsp;so&nbsp;100 notes are the least efficient way to dispense cash.

However the Rs 2000 notes&nbsp;were seldom accepted because so few vendors or stores have enough Rs 100 notes to provide the necessary&nbsp;change.

Inserting Rs 500 notes into circulation should help&nbsp;ease the situation further.

(WION)

Sources told the Times of India that four different currency printing presses have gone from operating in two shifts to three

As the cash crunch at bank branches across India continues to persist, the Indian government has further scaled up the printing of new 500 rupee notes, The Times of India reports. Four currency printing presses -- two owned by Reserve Bank of India at Mysuru and Salboni and two government-owned ones at Nashik and Devas, which were operating two shifts -- have now started working three shifts, sources told The Times of India. The focus now is on augmenting the supply of Rs 500 notes, the sources said. "Supply to other banks will definitely improve. We are airlifting 500 rupee notes. There will be some pressure initially but in the next few days it will ease," a government source told TOI. With the RBI increasing the supply of cash, the position in bank branches and ATMs of large lenders is expected to improve substantially on Thursday. Banks will be using the money to make available funds in centres where they have a large number of salary accounts, TOI said in its report. ATMs loaded with Rs 100 notes run out of money quickly because the machines only have space to hold so many notes, so 100 notes are the least efficient way to dispense cash. However the Rs 2000 notes were seldom accepted because so few vendors or stores have enough Rs 100 notes to provide the necessary change. Inserting Rs 500 notes into circulation should help ease the situation further. (WION)

Demonetisation: Indian government scales up printing of 500 rupee notes in bid to ease cash crunch

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