Articles by "Reserve Bank of India"
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Hello Jammu News at 7:56:00 PM 0


Mumbai, Mar 27 :  The RBI on Friday put on hold EMI payments on all term loans for three months and cut interest rate by steepest in more than 11 years as it joined the government effort to rescue a slowing economy that has now got caught in coronavirus whirlwind.

The Reserve Bank of India (RBI) cut repo to 4.4 per cent, the lowest in at least 15 years. Also, it reduced the cash reserve ratio maintained by the banks for the first time in over seven years. CRR for all banks was cut by 100 basis points to release Rs 1.37 lakh crore across banking system.

The reverse repo rate was cut by 90 bps to 4 per cent, creating an asymmetrical corridor.

RBI Governor Shaktikanta Das predicted a big global recession and said India will not be immune.

It all depends how India responds to the situation, he said.

Global slowdown could make things difficult for India too, despite some help from falling crude prices, Das said, adding food prices may soften even further on record crop production.

Aggregate demand may weaken and ease core inflation further, he noted.

The liquidity measures announced include auction of targeted long-term repo operation of 3 year tenor for total amount of Rs 1 lakh crore at floating rate and accommodation under Marginal Standing Facility to be increased from 2 per cent to 3 per cent of Statutory Liquidity Ratio (SLR) with immediate effect till June 30.

Combined, these three measures will make available a total Rs 3,74,000 crore to the country's financial system.

After cutting policy rates five times in 2019, the RBI had been on a pause since December in view of high inflation.

The measures announced come a day after the government unveiled a Rs 1.7 lakh crore package of free foodgrains and cash doles to the poor to deal with the economic impact of the unprecedented 21-day nationwide lockdown.

While the Monetary Policy Committee (MPC) of the RBI originally was slated to meet in the first week of April, it was advanced by a week to meet the challenge of coronavirus.
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Hello Jammu News at 8:32:00 PM 0


Mumbai, Mar 24 :  The Reserve Bank, which has been snapping up greenbacks in the past two years, has also been lapping up US treasury bills and the holdings touched a record high in January.

The holdings rose by more than USD 2 billion between December 2019 and January 2020.

At USD 164.3 billion, the Reserve Bank's US treasury holdings is at an all-time high, show the latest data from the US Treasury Department.

The love for dollars and other US government assets began with the collapse of the gold standard or the Bretton Woods principles in the late 1970s and central banks moved to the fractional reserves system. Since then, the US dollar/T-bills have been the safest asset class for any central bank, despite getting one of the lowest returns.

While during the 2008 global credit crisis the return had been close to zero, the coronavirus pandemic has also yanked down the interest rates in the US to 0-0.25 per cent now and so will be the return on investments.

But for central banks, return is not the priority but safety and liquidity of their investments are.

Central banks, including the Reserve Bank of India (RBI), follow the principle of SLR (Safety, Liquidity and Return) for their investment decisions. Like its counterparts in other countries, RBI follows the safety first, liquidity second approach and return on their investment is only the third criteria.

According to the latest data released by the US Treasury, RBI raised its US bond holdings to USD 164.3 billion at the end of January this year, up 13 per cent from USD 144.9 billion a year ago. In December, the holdings were at USD 162 billion.

RBI purchases these bonds on behalf of India. The US Treasury Department releases foreign holdings data on a country-wise basis.

With the holdings worth USD 164.3 billion, India was the 13th largest investor in the American treasury bills after Japan (USD 1.21 trillion), China (USD 1.07 trillion) and the UK (USD 372.7 billion).

Even the Cayman Islands is way ahead with holdings of USD 216.1 billion while Saudi Arabia is just ahead of India with USD 182.9 billion worth holdings.

According to an analyst, one of the major reasons for this massive spike in a month could be the exodus of foreign funds from the country since the beginning of the year. Overseas funds pulled out over Rs 1.13 lakh crore from equities and debt in the Indian market amid the coronavirus scare as they are taking refuge in US assets.

And the way RBI has been lapping up US assets, its clear that the central bank is also chasing safer assets, the analyst said.

In a recent report, Bank of America Securities said RBI has a strong dollar arsenal to defend the rupee with a USD 30 billion fire power.

In March, RBI has done two tranches of dollar-rupee swaps of USD 2 billion each as the rupee was plumbing new lows every day. It has promised to sell more dollars to defend the rupee -- something the central bank is doing for the first time openly.

This had the forex reserves falling for the first time in 25 weeks. For the week to March 13, the forex reserves plunged by USD 5.35 billion to USD 481.89 billion. In the week before, the forex kitty was at an all-time high of USD 487.23 billion.
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Hello Jammu News at 10:45:00 PM 0
Reserve Bank Of India


Mumbai, Feb 3 :  Amid slowing GDP growth and rising inflation, the Reserve Bank of India (RBI) will unveil its last monetary policy for the current financial year on Thursday.

The sixth bi-monthly monetary policy statement for 2019-20 would be the last one for the current financial year.

The Monetary Policy Committee (MPC) will meet during February 4-6 for the policy review, the RBI said in a release on Monday.

The RBI said it will place the resolution of the MPC on its website before noon on February 6.

The government has estimated India's gross domestic product (GDP) to be growing at a slower pace of 5 per cent in the current financial year on the back of various factors, domestic and global, including weakening consumption demand in the country.

In December, the retail inflation also peaked to a five-year high of 7.3 per cent, mainly due to costlier vegetables, specifically onion and tomato.

The Economic Survey 2019-20 has projected the Indian economy to grow at around 6-6.5 per cent in the next financial year beginning April 2020.

"With fiscal policy taking a growth-supportive role, on the back of monetary policy being ahead of the curve last year, the calibrated policy mix should bode well for growth.

"We look for the central bank to remain on an extended pause on rates (even as supply-induced shocks dissipate) but maintain an accommodative bias to ensure cost of capital remains stable and favourable," Radhika Rao, senior vice-president and economist, DBS Group Research, said.

Crisil Ratings in its post-Union Budget 2020-21 comment has said, "Monetary policy has done its bit, but with moderate and slow success."

It added that the RBI cut the repo rate cumulatively by 135 basis points (bps) through calendar 2019, but lending rates tarried with just nearly 50-bps decline. "Even as credit demand has fallen, risk aversion and weak sentiment have affected the willingness to supply credit, too."

In its previous monetary policy review in December, the RBI had decided for a status quo, leaving the key repo -- the rate at which it lends to banks -- at 5.15 per cent.
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Hello Jammu News at 11:28:00 PM 0
Reserve Bank Of India


Ahmedabad, Jan 28 :  The Gujarat High Court on Tuesday issued notice to Reserve Bank of India on a PIL filed by eight trade federations in the state seeking the court's direction to the central bank to not allow unions to go on strike.

Bank unions may go on a two-day nationwide strike on January 31 and February 1, followed by a three-day strike from March 11-13, and indefinite strike from April 1, mainly over their demand for wage revision.

The division bench of Chief Justice Vikram Nath and Justice AJ Shastri issued notice to the RBI, returnable on January 30.

The federations have prayed to the court to direct the RBI to not allow banks to go on strike and also take strict action against employees for frequently going on strikes for their own financial benefits.

The PIL said such strikes by bank unions are illegal and are meant only for their own financial benefits at the cost of the public who have to suffer harassment and financial loss.

The bank employees associations are going on strike over issues like salary, leaves, and other benefits, which can be achieved as per the provisions of law and not by declaring strikes, the PIL claimed.

The PIL claimed the strike would cause a loss of Rs 12,700 crore per day.

The PIL has been filed by Gujarat Traders Federation, Rajkot Chamber of Commerce and Industry, Central Gujarat Chamber of Commerce and Industry, Ahmedabad Auto Parts Association among others.

The strike call has been given by United Forum of Bank Unions (UFBU), an umbrella body of the nine unions, including All India Bank Officers' Confederation (AIBOC), All India Bank Employees Association (AIBEA) and National Organisation of Bank Workers (NOBW).
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Hello Jammu News at 9:43:00 PM 0


New Delhi, Jul 1 :  The government is considering strengthening the Reserve Bank's regulatory and supervisory powers over the non-banking finance companies (NBFCs), Finance Minister Nirmala Sitharaman said in the Lok Sabha Monday.

Replying to a question, the minister said RBI was closely monitoring the liquidity position of NBFCs and will continue to monitor the activity and performance of the sector with a focus on major entities and their interlinkages with other sectors.

The central bank, she added, has also informed that with a view to strengthen the NBFCs and maintain stability of the financial system, it has been taking necessary regulatory and supervisory steps.

"Government has received a proposal from RBI to strengthen RBI's regulatory and supervisory powers under the Reserve Bank of India Act, 1934, and the same is under consideration," Sitharaman said in a written reply.

She further said that the government, from time to time, infuses capital in public sector NBFCs based on an objective assessment of requirements.

However, there was no proposal under consideration of the government to recapitalise private NBFCs.

As on June 23, 2019, 9,643 NBFCs were registered with RBI.

To another question, the minister said that gross non-performing assets (NPAs) ratio of NBFCs (deposit-taking and systemically important non-depositing NBFCs) was at 6.6 per cent during 2018-19, up from 5.3 per cent in the preceding financial year.
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Hello Jammu News at 1:00:00 PM 0

Former Economic Affairs Secretary Shaktikanta Das Wednesday assumed charge as the RBI Governor.


New Delhi, Dec 12 (PTI) Former Economic Affairs Secretary Shaktikanta Das Wednesday assumed charge as the RBI Governor.

He replaces Urjit Patel who abruptly resigned amid a face-off with the government over issues related to governance and autonomy of the central bank.

"Assumed charge as Governor, Reserve Bank of India. Thank you each and everyone for your good wishes," Das said in a tweet.

Finance Minister Arun Jaitley termed Das as a person with "right credentials" for the RBI top job.

"Das has been a very senior and an experienced civil servant. He has almost his entire career in the management of finances and economic management of the country both, when he was in the state government of Tamil Nadu and also when he was in the Government of India in the Ministry of Finance," Jaitley said.

Das, who becomes 25th governor of the RBI, is a former IAS officer of Tamil Nadu cadre.

Jaitley said his appointment was necessitated by the resignation of Urjit Patel as Governor of the RBI on Monday.

"I think, he (Das) has the right credentials. He has been extremely professional, has worked under various governments and has excelled himself. I am sure, in meeting the challenges before India's economy as Governor of Reserve Bank, he will certainly act," the finance minister said.


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Hello Jammu News at 6:15:00 PM 0


Mumbai, Oct 1 (PTI) The Reserve Bank is likely to increase the repo rate by 25 basis points in the upcoming monetary policy review as inflation is expected to accelerate further due to higher crude prices and the weakness in rupee.


The monetary policy committee will start its three- day meeting from October 3 to decide on the fourth bi-monthly monetary policy.

After two successive hikes, the repo rate currently stands at 6.50 per cent.

"With petrol and diesel prices moving up, there is a strong expectation that inflation will also move up. So, they (RBI) may take a pre-emptive action. I feel there will be an increase of 25 basis points in the repo rate," Union Bank of India managing director and chief executive Rajkiran Rai G said.

Despite the rise in oil prices, the headline inflation number came down to 3.69 per cent for August as against 4.17 per cent for July.


If the RBI increases repo rate by 25 basis points (bps), then it would be the third consecutive rate hike.

Experts says the weaker trend in the rupee may also prompt the central bank to raise repo rate.


"Given where currency level is at this point of time, I think they will increase the interest rate by quarter basis points," HDFC vice chairman and chief executive Keki Mistry said.

Tracking global developments, the rupee has become weak and is hovering around 73 against the dollar.

The SBI, in its research report, Ecowrap, said the RBI should raise the policy repo rate at least 25 basis points to arrest the rupee's fall.

"We rule out a hike of 50 basis points, as it may spook the market. However, there is a probability of change in neutral stance too, as three successive rate hikes with a neutral stance could contradict RBI message," the research report said.

Morgan Stanley in a report said it expects the RBI to hike the short term rates at its October meeting.

It said it remains bearish on the rupee despite the recent emerging market (EM) stabilisation as there are concerns about the recent default of a local financial institution, oil prices and a widening fiscal deficit persist.


"The default has led to a rise in corporate spreads and increases the refinancing pressure on domestic financial institutions at a time when our economist expects the RBI to hike at its October meeting," the Morgan Stanley report said.

A Kotak Economic Research report said the MPC will likely increase the repo rate by 25 bps in the October policy based on the implied impact of expected cyclical recovery in growth, rupee depreciation, and crude price movement on the medium term inflation trajectory.

Bankers, however, do not expect the RBI to reduce cash reserve ratio (CRR), in the upcoming policy, despite liquidity condition remaining tight.

"The RBI has taken a few measures to ease the liquidity condition. I don't think they will reduce CRR," said a senior treasury official of a state-run bank.

After conducting two open market operations (OMOs), the apex bank Monday announced to conduct more such purchases to ease the liquidity condition in the banking system. Monday it announced a new OMO of Rs 36,000 crore.

"Based on an assessment of the durable liquidity needs going forward and the seasonal growth in currency in circulation observed in build-up to the festive season, we have decided to conduct purchase of government securities under OMOs worth Rs 36,000 crore in October 2018," the RBI said in a release Monday.

The auctions would be conducted during the second, third and fourth week of October, it said.
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Hello Jammu News at 12:34:00 PM 0




New Delhi, Aug 29 : As many as 99.3 per cent of the old 500 and 1,000 rupee notes, that were banned overnight in November 2016, have been returned, the Reserve Bank of India said in its annual report.
Of the Rs 15.41 lakh crore worth 500 and 1,000 rupee notes in circulation before November 8, 2016, notes worth Rs 15.31 lakh crore have been returned.

The "humungous task of processing and verification of specified bank notes (SBNs) was successfully achieved," it said.

The SBNs received were verified, counted and processed in the sophisticated high speed currency verification and processing system (CVPS) for accuracy and genuineness and then shredded, it added.

SBNs refer to the demonetised old 500 and 1,000 rupee.

RBI said the processing of SBNs has since been completed. "The total SBNs returned from circulation is Rs 15,310.73 billion." PTI
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Hello Jammu News at 2:29:00 PM 0
The Reserve Bank of India (RBI) today fixed the reference rate at 64.3666 against the US Dollar, down by 18.73 paise over the previous rate of 64.4539. The Euro was fixed 73.6933 up by 12.56 paise over its previous rate of 73.5677. The Pound was registered a 84.2173 (83.5451) and Yen at 57.12 (56.90), an RBI release said


Mumbai, Jul 17 :  The Reserve Bank of India (RBI) today fixed the reference rate at 64.3666 against the US Dollar, down by 18.73 paise over the previous rate of 64.4539. The Euro was fixed 73.6933 up by 12.56 paise over its previous rate of 73.5677. The Pound was registered a 84.2173 (83.5451) and Yen at 57.12 (56.90), an RBI release said .UNI 

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