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[hfe_template id='11223'] [ad_1] The Reserve Bank of India (RBI) has reduced interest rates by 25 basis points and shifted its stance from neutral to accommodative, as was anticipated. The tone of the announcement suggested a cautious approach, indicating that the RBI is keeping its options open for future action should the global situation deteriorate. The RBI has further revised its projection for the real Gross Domestic Product (GDP) in FY26 to 6.5%, down from the previous estimate of 6.7%. While India is somewhat insulated from global tariffs, the potential effects of a worldwide recession cannot be completely overlooked. India’s retail inflation eased to a seven-month low of 3.61% in February 2025, falling below the RBI’s medium-term target of 4% for the first time since August 2024. Assuming a normal monsoon, the consumer price index (CPI) inflation is now projected at 4%, revised downward from the earlier forecast of 4.2%. The trade war can create excesses in the ...

[hfe_template id='11223'] [ad_1] Shares of Indian information technology companies fell sharply on Wednesday, with Coforge, Wipro and other major IT firms declining as much as 5.4%, amid a broader global equity sell-off triggered by renewed U.S.-China trade tensions. The Nifty IT index slid 2.4%, emerging as the biggest drag on benchmark indices, as investors reacted to Washington’s confirmation of steep 104% tariffs on Chinese imports, which are set to take effect after midnight. The tariff escalation, announced by former U.S. President Donald Trump, stoked fears of a protracted trade war and potential global stagflation, rattling equity markets across Asia and Wall Street. Shares of IT firms, which earn a significant portion of their revenue in U.S. dollars, including Coforge, Wipro, Mphasis, Tech Mahindra and Persistent Systems dropped between 3% and 5.4%. Other IT players like LTIMindtree, Infosys, HCL Technologies and Tata Consultancy Services declined between 1.5% ...

[hfe_template id='11223'] [ad_1] Mumbai: The Reserve Bank of India (RBI) has asked commercial banks to provide information on the impact of the proposed liquidity coverage (LCR) norms following pushback from banks over the move to make the norms more stringent, said people with knowledge of the matter. The draft norms are to be reviewed by governor Sanjay Malhotra, who succeeded Shaktikanta Das on December 9, before being finalised, they said. The rules, which are to take effect on April 1, will require lenders to set aside more money in high quality liquid assets (HQLAs), squeezing their lending capacity. Such assets are used to meet unexpected demands for liquidity in the event of a disruption. The LCR norms are aimed at mitigating risk arising from a likelihood of substantial online withdrawals. Banks had given feedback to the finance ministry that the revised norms could impact their ability to lend, as reported by ET on September 19 last year. The banking regulator ...

[hfe_template id='11223'] [ad_1] Mumbai: India's most-valued lender, HDFC Bank, could consider bringing down its stake in HDB Financial Services to below 20% or segregate products between both entities if a draft central bank circular on the overlap of similar businesses is mandated as applicable guidelines, said an analysis by brokerage house Macquarie Capital. While HDFC Bank also has the option of merging HDB Financial Services with itself, Macquarie believes the bank may not consider this route due to the operational challenges associated with asset-liability mismatch and other reserve requirements mandated by the Reserve Bank of India . Currently, HDFC Bank owns 94.4% of the non-banking financial company (NBFC). The RBI recently released a draft circular on forms of business and prudential regulations on investments. That circular clearly states that multiple group entities within a bank would not be allowed to conduct similar business and that there should be n...

[hfe_template id='11223'] [ad_1] As yet another Finance Ministry insider and revenue secretary Sanjay Malhotra takes charge of the Reserve Bank of India (RBI) from Wednesday, market experts say the selection of two career bureaucrats as RBI Governor in a row indicates the government's comfort with having a bureaucrat rather than a technocrat at the central bank's helm. "In the past, when bureaucrats have joined the RBI, we have observed a greater alignment with the government’s way of thinking in the initial period, but over time this changes with more alignment seen with the RBI’s institutional thinking," Nomura's Sonal Varma said. Pointing out that a whole lot is known about Malhotra’s views on current economic issues, the brokerage firm said three potential changes could occur under the new RBI Governor. 1) Shift towards more accommodative monetary policy With the new RBI governor from the Finance Ministry and with fresh thinking at hand, a rate ...

[hfe_template id='11223'] [ad_1] ETMarkets.com In the Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) meeting on December 6, 2024, the cash reserve ratio (CRR) was reduced from 4.5% to 4%, releasing additional liquidity into the banking system. This move is expected to enhance the lending capacity of banks, supporting credit growth and economic recovery. On the other hand, the repo rate was maintained at 6.5%, reflecting a balanced approach to managing inflation, but the subdued GDP projections and ongoing inflationary pressures may limit the broader economic recovery. The CRR cut is expected to boost systemic liquidity, enabling banks to meet credit demand across key sectors. As systemic credit growth moderates to an estimated 10.5% YoY for FY25, the additional funds are poised to play a critical role in revitalising demand, particularly in retail and small business segments. Furthermore, the anticipated start of a rate-cut cycle in early 2025 could prov...

[hfe_template id='11223'] [ad_1] The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Friday reduced the Cash Reserve Ratio (CRR) by 50 basis points to 4%, bringing it back to the level before the policy tightening cycle began in April 2022. The announcement was made by Governor Shaktikanta Das in his final speech of this term. "It has been decided to reduce the cash reserve ratio (CRR) of all banks by 50 bps in two equal tranches of 25 bps each to 4% of net demand and time liabilities (NDTL) with effect from the fortnight beginning December 14, 2024 and December 28, 2024, respectively. This will restore the CRR to 4% of NDTL, which was prevailing before the commencement of the policy tightening cycle in April 2022. This reduction in the CRR would release primary liquidity of about Rs 1.16 lakh crore to the banking system," the policy speech said. Also read | RBI cuts CRR by 50 bps: FD investors set to see interest rate cuts in 2025, know w...

[hfe_template id='11223'] [ad_1] Shares of PSU bank stocks like UCO Bank and Central Bank of India rallied up to 8% on Wednesday as a three-day meeting of the Reserve Bank of India (RBI)'s rate-setting panel began today in which brokerages expect Governor Shaktikanta Das to cut cash reserve ratio (CRR). Global brokerage firm Citi said that if the CRR is cut by 50 basis points, the biggest NII (net interest income) benefit would be for PSU banks like PNB, SBI and Bank of Baroda. Within private banks, it said lenders like Federal Bank, HDFC Bank, and Axis Bank will gain. Nifty PSU Bank index was up around 1% with UCO Bank leading the upside with an 8% rally. Central Bank, Indian Overseas Bank, and Punjab & Sind Bank were up about 5-6% each. Among private banks, HDFC Bank was up around 2% and was one of the biggest gainers in Nifty and Sensex. In the RBI MPC meeting, the decision of which would be announced on December 6, a rate cut is not expected but the central b...

[hfe_template id='11223'] [ad_1] Shares of One 97 Communications-owned Paytm jumped 5% to an intraday high of Rs 722.50 on the BSE after the National Payments Corporation of India (NPCI) granted the company approval to onboard new UPI users, subject to adherence to all procedural guidelines and circulars. "We would like to inform you that vide letter dated October 22, 2024, the National Payments Corporation of India (NPCI) has granted approval to the company to onboard new UPI users, with adherence to all NPCI procedural guidelines and circulars," the company stated in a stock exchange filing. This comes after the Reserve Bank of India on January 31 this year directed Paytm Payments Bank to stop deposits, credit transactions, or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc after February 29, 2024, other than any interest, cashback, or refunds that may be credited anytime. This approval, communicated via a letter dated...

[hfe_template id='11223'] [ad_1] Mumbai: Shares of gold loan companies lost sheen on Tuesday after the Reserve Bank of India (RBI) called for these companies to take corrective measures for the lapses in loan sanctioning practices in the next three months. Muthoot Finance fell 3.9% and Manappuram Finance declined 1.9% as analysts see the central bank's action weighing on their ROAs (return on assets) - a key profitability ratio for lenders. The issues highlighted by RBI include improper valuation, breaches of loan-to-value (LTV) ratios, and inadequate governance in partnerships with fintech entities, said Shrikant Chouhan, head of equity research at Kotak Securities. IIFL Finance was up nearly 0.5%. Shares of private banks like Federal Bank, CSB Bank, South Indian Bank and Dhanlaxmi Bank, which also are also major lenders against gold, ended either flat or lower. Agencies "Our prognosis suggests that specialised financiers like Muthoot and Manappuram Finance re...

[hfe_template id='11223'] [ad_1] Mauritius-based IndusInd International Holdings (IIHL), through its subsidiary Cyqure India, plans to raise ₹3,000 crore by issuing 14.50% non-convertible debentures (NCDs) maturing in 2028. These NCDs, set to be zero-coupon, senior secured, listed, rated, and redeemable, will be used to finance IIHL's acquisition of Anil Ambani-promoted Reliance Capital (RCap). The issuance will have a 42-month tenor, with bidding open and closing on September 16, 2024. The Hinduja Group, looking to raise a total debt of ₹7,300 crore, had split its fundraising efforts into domestic and overseas segments, with plans to raise part of it from private credit funds, offering returns of around 15%. 360 One and Barclays are helping in the fundraising as reported. The acquisition of RCap follows a long process, with the committee of creditors approving the Hinduja Group's ₹9,650 crore bid in July 2023. Around ₹2,700 crore is equity brought in by the Hind...

[hfe_template id='11223'] [ad_1] The Reserve Bank of India on Tuesday released draft regulations to rationalise norms for export-import transactions, proposing discretionary powers for banks when it comes to a 'caution list' for exporters who fail to bring in foreign exchange on time. "Where an export amount is outstanding in EDPMS (export data processing and monitoring system) for a period of more than two years from the due date of realization (including extension of the period granted by authorised dealer bank, if any), AD banks shall ensure that exporter is flagged as 'caution listed' in the EDPMS," the RBI said in the draft regulations and directions. The draft regulations, which are under the Foreign Exchange Management Act (FEMA), are available for public response and feedback may be forwarded to the RBI via email by September 1, the central bank said. The RBI said that the proposed regulations are intended to promote ease of doing busine...