18 March 2018
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  • RBI may cut key policy rates by 25 bps in August: Report
    Mar 15, 2018
    The Reserve Bank of India (RBI) is expected to cut key policy rates by 25 bps in August, which will lead to lending rate cuts, and in turn support growth, says a report."We continue to expect RBI to cut 25 bps in August, if rains are normal, to cool yields and signal lending rate cuts, BofAML said in a research note.According to global financial services major Bank of America Merrill Lynch (BofAML), risks regarding price rise are overdone and March inflation is likely at 4.2 per cent, well within RBI's 2-6 per cent mandate.As per the global brokerage, fundamentals of the country like growth, money supply and monsoon, point to a benign inflation outlook.
  • RBI does away with letters of undertaking
    Mar 14, 2018
    The Reserve Bank of India (RBI) on Tuesday disallowed banks from issuing letters of undertaking (LoUs) or guarantees for trade credits for imports into India. The move comes in the aftermath of a Rs 14,000-crore LoU-linked fraud unearthed at Punjab National Bank (PNB). However, letters of credit and bank guarantees for trade credits for imports into the country will be permitted provided they meet RBI conditions.
  • RBI caps tenure of trade finance instruments to 1 year
    Mar 13, 2018
    The Reserve Bank on Monday tightened the guidelines for hedging commodity price risks and freight risks in overseas markets, which will come into effect next financial year, by limiting the tenor of all bank instruments in trade finance areas. Accordingly, a central bank circular said, "banks can issue standby letters of credit (SBLCs)/guarantees, for a maximum period of one year, in lieu of making a remittance of margin money for commodity hedging transactions.
  • SMA details exempted from disclosure under RTI
    Mar 13, 2018
    Contradicting its reply to an earlier right to information (RTI) query, the Reserve Bank of India (RBI) has recently said bank-wise information on special mention account (SMA) 1 and 2 is exempt from disclosure under Section 8 (1) (a) & (d) of the RTI Act. While SMA 1 refers to loans where repayments are overdue between 31-60 days, SMA 2 loans are ones where principal or interest is overdue between 61-90 days. Although these are technically not non-performing assets (NPAs), but nonetheless indicate ‘incipient stress’.
  • RBI initiates special audit of PSBs with focus on trade finance
    Mar 12, 2018
    Rattled by spate of banking frauds, RBI has initiated special audit of state-owned lenders with focus on trade financing activities, especially relating to issuance of letters of undertakings (LoUs) by them, banking sources said. In addition, the RBI has asked all banks for details of the LoUs they had written, including the amounts outstanding, and whether the banks had pre-approved credit limits or kept enough cash on margin before issuing the guarantees.
  • RBI may hike repo rate by 0.25% in 2018
    Mar 10, 2018
    The Reserve Bank is likely to increase its key rates by 0.25 per cent this year as inflation is expected to be at a higher range due to wide fiscal deficit and high prices of oil and farm produce, a report said today. The headline consumer price inflation (CPI) will not breach the 6 per cent mark which is the upper end of the target band for RBI, but a moderation towards the 4 per cent target is also "unlikely", Care Ratings said in a report.
  • India needs to grow at 8-9% for next two decades to solve social issues, says former RBI Governor C Rangarajan
    Mar 07, 2018
    India needs to grow at 8 to 9 per cent for the next two decades to be able to address problems related to poverty and healthcare, among others, former RBI Governor C Rangarajan said here today. The eminent economist, however, stressed that growth must be combined with the need to take care of the poorer sections of the society. Citing the example of South Korea, he said by growing at 7 to 8 per cent for three decades, it eliminated poverty and other problems and succeeded in providing better education and health.
  • RBI sets rupee reference rate at 64.9941 against US dollar
    Mar 07, 2018
    The Reserve Bank of India today fixed the reference rate of the rupee at 64.9941 against the US dollar and 80.2092 for the euro. The corresponding rates were 65.0530 and 80.0347,as on yesterday. The according to an RBI statement, the exchange rates for the pound and the yen against the rupee were 89.9063 and 61.20 per 100 yens, respectively, based on reference rates for the dollar and cross-currency quotes at noon. The SDR-rupee figure will be based on this rate, the statement added.
  • RBI to infuse Rs 1 trn into banking system via special auctions in March
    Mar 06, 2018
    The Reserve Bank of India (RBI) will infuse up to Rs 1 trillion into the banking system through special auctions this month to manage additional demand for liquidity as activities of banks and corporate entities pick pace before the close of the financial year. The current financial year (2017-18) ends on March 31. Treasury executives said liquidity in the system has been under pressure, with supply falling short of demand on some days. The RBI has maintained its stance to keep liquidity close to neutral.
  • RBI to inject additional liquidity of Rs 1 lakh crore in March
    Mar 06, 2018
    The Reserve Bank on Monday said it will inject additional liquidity of Rs 1 lakh crore in banks through longer tenor instruments to enable flexibility towards meeting their fund needs. The RBI said in order to address additional demand for liquidity and with a view to provide flexibility to the banking system in its liquidity management towards March-end, "It is prepared to inject adequate additional liquidity using a combination of appropriate instruments."
  • RBI to bring interoperability for e-wallets within the promised time frame
    Mar 05, 2018
    The Reserve Bank of India (RBI) is likely to stick to its target of making digital wallets interoperable by April despite allowing payment companies two additional months to comply with its customer verification requirement, said two bankers aware of the matter. RBI extended its deadline to February for digital wallet providers to meet its full know-your-customer (KYC) norms, which it deems as necessary to eliminate any potential for misuse before allowing people holding different wallets to transact.
  • Consumers may use wallet balances post Feb 28, says RBI
    Feb 27, 2018
    The Reserve Bank of India (RBI) on Monday clarified that customers using mobile wallets and other prepaid payment instruments (PPIs) will be able to use their existing wallet balances to make purchases even if full KYC norms have not been carried out by February 28. Reloading of the wallet and remittances, however, will only be permitted after compliance with KYC requirements. The central bank also made it clear that there will be no further extension of the deadline for PPI issuers to complete KYC for their users.
  • RBI raises currency derivative trade limit to $100 mn
    Feb 27, 2018
    The Reserve Bank today raised the exposure limit under exchange traded currency derivatives (ETCD) trading for residents and foreign portfolio investors (FPIs) to $100 million across all currency pairs involving the Indian rupee. The RBI’s decision to raise the limit will help entities engaged in forex transactions to maintain their currency risks in a better manner. Earlier, the RBI had imposed a limit of $15 million for USD-INR and $5 million for other currency pairs of Indian rupee with Euro, Japanese Yen and British Pound.
  • RBI launches Ombudsman Scheme for NBFCs
    Feb 24, 2018
    The RBI today launched 'Ombudsman Scheme' for non-banking financial companies (NBFC) for redressal of complaints against them. "The scheme will provide a cost-free and expeditious complaint redressal mechanism relating to deficiency in the services by NBFCs covered under the Scheme," the central bank said. The offices of the NBFC ombudsmen will function at four metro centres -- Chennai, Kolkata, Mumbai and New Delhi.
  • RBI tells banks to link SWIFT with CBS by 30 April
    Feb 24, 2018
    The Reserve Bank of India (RBI) has set 30 April as the deadline for banks to integrate SWIFT (Society for Worldwide Interbank Financial Telecommunication) with core banking solutions (CBS) as it looks to strengthen internal controls in banks following the Rs11,400 crore PNB fraud. “That (30 April) could be a deadline but it is an outer limit. Today, the urgency is such that everyone wants this project to be on fast track,” Usha Ananthasubramanian, managing director and chief executive officer of Allahabad Bank, and chairman of the Indian Banks’ Association (IBA), said on the sidelines of an IBA event on Friday.
  • Expect rate hike from RBI in second half of FY19: UBS
    Feb 22, 2018
    We got a slew of macro data overnight – goods and services tax (GST) collections which didn’t impress most of the economists, the Indian Monetary Policy Committee Members also expressed discomfort over the rising inflation and the US yield has hit a 4-year high post the release of hawkish Federal Open Market Committee (FOMC) minutes. In an interview to CNBC-TV18, Tanvee Gupta Jain of UBS and Abhishek Upadhyay of ICICI Securities Primary Dealership shared their views and readings on the data.
  • India Is Said to Tighten Approvals for Offshore Borrowing
    Feb 21, 2018
    India’s central bank is reviewing its process for allowing companies to raise money overseas due to concern that any increase in rupee volatility may hurt borrowers’ ability to repay debt, a person familiar with the matter said. The Reserve Bank of India is spending more time scrutinizing companies’ hedging practices, vetting borrowers more closely to prepare for any financial-market fallout from an increase in U.S. interest rates, the person said, asking not to be named as the matter is private.
  • Reserve Bank to maintain status quo through 1st half of this year: Report
    Feb 19, 2018
    According to Kotak Institutional Equities, besides rising retail inflation, the other factors that are expected to keep RBI's Monetary Policy Committee (MPC) on guard include clarity on monsoons, MSP hike decisions and crude oil prices.The Reserve Bank is expected to be in wait-and-watch mode in the near term, and is likely to maintain status quo, through the first half of this year, says a report.According to Kotak Institutional Equities, besides rising retail inflation, the other factors that are expected to keep RBI's Monetary Policy Committee (MPC) on guard include clarity on monsoons, MSP hike decisions and crude oil prices.
  • RBI asks banks to accept coins of all denominations from public
    Feb 16, 2018
    Banks should not refuse to accept coins of all denominations from customers and any non-compliance may result into penal action, the Reserve Bank said today. Despite advisory that none of the bank branches should refuse to accept small denomination notes or coins tendered at their counters, complaints keep coming about non-acceptance of coins by bank branches, RBI said. Denial to accept coins, either for exchange or deposit, leads to refusal on the part of the shopkeepers and small traders which causes inconvenience to the public at large, the bank said.
  • In late night notification, RBI orders immediate and complete overhaul of bank NPA cleanup
    Feb 14, 2018
    Late Monday night, in a notification, the Reserve Bank of India (RBI) announced a complete overhaul of the stressed asset resolution framework by immediately withdrawing existing schemes and asking lenders to resolve defaults within 180 days. Further, the central bank asked that starting February 23, all banks will identify defaults weekly make a disclosure every Friday to the RBI credit registry. In a 20-page notification issued on Monday, the RBI said that it is substituting the existing guidelines with a “harmonised and simplified generic framework” for asset resolution in view of the enactment of the Insolvency and Bankruptcy Code (IBC).
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