The post had fallen vacant after senior-most deputy governor N S Vishwanathan demitted office three months ahead of his extended tenure on March 31 on health grounds after serving the monetary authority for 39 years.
The central bank has written to the Finance Ministry and the letter is under consideration, the officials said, asking not to be identified as the matter is not public. Three of the six-member Monetary Policy Committee are external representatives and their appointment is for a term of four years and they are ineligible for re-appointment, according to rules.
RBI Governor Shaktikanta Das on Saturday said that it is crucial to raise capital and build buffers to ensure credit flow and resilience. Speaking at 7th SBI Banking and Economics Conclave, he also said that Indian economy has started showing signs of normalcy with ease in lockdown restrictions across the country but medium term outlook remains uncertain. Watch!Economy showing signs of returning to normalcy, medium-term outlook remains uncertain: RBI Gov
After 14 years since the MSME Development Act came into existence in 2006, a revision in MSME definition was announced in the Atmanirbhar Bharat package on May 13. As per the revised definition, an enterprise is micro where the investment in plant and machinery or equipment does not exceed Rs 1 crore and turnover does not cross Rs 5 crore.
The government in August 2017 had introduced the Financial Resolution and Deposit Insurance (FRDI) Bill in Parliament which, among other things, proposed setting up of a resolution corporation.
Covid may lead to higher NPAs and capital erosion of banks, while MFs may turn a stress point, Das has said.
In 2008 also, when the world was hit by the global financial crisis following Lehman Brothers going insolvent, the RBI had announced a one-time loan restructuring for several sectors to help them tide over the economic woes.
“The governor and deputy governors briefed the board about the overall macroeconomic conditions – both domestic and global; financial sector situation; and the impact of various monetary, regulatory and other measures taken by the RBI in the context of the Covid-19 pandemic,’’ RBI said in a statement after its board meet.
The RBI release was silent on whether banks' demand for one-time restructuring of loans was discussed at all.
Union Finance Minister Nirmala Sitharaman on Thursday said the government is discussing with the Reserve Bank of India (RBI) for loan restructuring of companies which are stressed owing to the Covid-19 pandemic. Speaking at a webinar organised by the Chennai International Centre (CIC), Sitharaman said that discussions are on with the RBI on the matter of one-time restructuring of loans.Govt discussing with RBI on one-time loan rejig for stressed companies
Many investors have reached out to the RBI claiming that the regulation is creating a spectre of harassment.
The government refrained from availing WMA since the week ended May 29, for three straight weeks. This is significant considering that the economy has been struggling to pick up activity since the nation-wide lockdown following the COVID Pandemic since end March.
The appointment indicates a return to the fold of the finance ministry after Patel resigned as RBI governor in 2018 citing personal reasons, with nine months remaining in his term.
Principal Economic Adviser says the government will undertake measures to boost demand.
Market participants have time till June 30 give their comments and suggestions to RBI on these guidelines.
Removing the clutter and inefficiencies in GST will help raise revenue productivity and collections.
Wholesale prices fell 3.2% last month from a year earlier, the Commerce Ministry said in a statement on Monday. The median of 16 estimates in a Bloomberg survey of economists was for a 1.2% drop.
The finance ministry may assess the capital requirement of public sector banks after the September quarter as there would be greater clarity about a spike in bad loans by that time.
Printing money is better than borrowing at high costs: Pronab Sen, director of International Growth Centre India
"If the stimulus is larger, you will pay a high interest cost, and you are better off printing more money."
The period of appointment would be initially up to three years, which can be extended up to five years, depending on the requirements or till the age of 60 years, whichever is earlier. The chief economist will analyse and submit inputs for various Cabinet Notes, SFC/EFC Notes and any other issues received from line ministries.
Former Reserve Bank of India (RBI) governor Urijit Patel has been appointed as the chairperson of National Institute of Public Finance and Policy (NIPFP), an official statement said on Friday. Patel will start his four-year tenure on June 22, succeeding former NIPFP chairman, Vijay Laxman Kelkar.Former RBI Governor Urjit Patel appointed as NIPFP Chariman, to replace Vijay Kelkar
The rescue ops will, rightly, save fundamentally productive firms, but also, wrongly, create many zombies.
The Supreme Court on Friday asked the Finance Ministry and the Reserve Bank of India to hold a meeting within three days to decide on waiver of interest on interest for deferred payments of instalments for loans during the moratorium period announced in wake of the coronavirus-induced lockdown. The court was hearing a plea filed by a Agra resident on the issue. A bench of Justices Ashok Bhushan, S K Kaul and M R Shah said the question is not of waiver of complete interest for entire moratorium period but it is limited only to interest charged on interest by banks.EMI moratorium: SC gives 3 days to Centre, RBI to decide on waiver of interest on loans
Maharashtra Appellate Authority of Advance Rulings allows input tax credit for companies using vehicles to transport cash to ATMs
The AAAR said the revenue department’s arguments that money be treated differently from other goods since RBI guidelines are not applicable on other goods, was “devoid of any merit and is not sustainable… erroneous and absurd, and do not merit to be considered.” ET has reviewed a copy of the order.
“Criminalising procedural lapses and minor non-compliances increases burden on businesses and it is essential that one should re-look at provisions which are merely procedural in nature and do not impact national security or public interest at large,” the DFS said in the statement of reasons explaining the rationale behind the proposed move.
The discussion paper released by the Reserve Bank of India (RBI) on Thursday said that chief executive officers (CEOs) and whole time directors (WTDs) belonging to the promoter group should pass on the managerial leadership to professionals after ten years.
A bench of Justices Ashok Bhushan, S K Kaul and M R Shah said the question is not of waiver of complete interest for entire moratorium period but it is limited only to interest charged on interest by banks. It posted the matter for further hearing next week.
The Reserve Bank of India on Friday announced a surprise 40 basis points repo rate cut in an off-cycle policy review. RBI Governor Shaktikanta Das announced the decision of the Monetary Policy Committee at a press conference. He also said that the GDP growth for FY21 is expected to be in negative territory. 40 bps repo rate cut, negative GDP outlook, says Shaktikanta Das at RBI Gov PC
Fitch Director Sovereign Ratings Thomas Rookmaaker said COVID-19 is still in India and it is "very likely" that the government will have to spend a bit more on fiscal measures to support the economy.
The RBI has increased the deployed manpower to 150 in its COVID-19 war-room at a secret facility in Mumbai.
The good thing about the monetary policy change is the signal that this is not the time to fret about inflation. While the RBI does raise the possibility of further supply disruptions due to possible lockdown and insufficient production of pulses raising the rate of inflation, it does not see this as an overriding concern.
On Friday, several state finance ministers had blocked a move to increase GST on garments and footwear as part of the proposal to correct the inverted duty structure — where the finished product has lower levies than inputs — on the grounds that this was "not the right time" when businesses are demanding a stimulus.
Bankers said the blanket ban on new IBC entries leaves restructuring of loans as the only plausible route to cure default but stringent RBI norms will have to be amended.
"The package is not cast-iron...there is scope to finetune the economic package," an EAC-PM member said.
New law will deal a blow to investors, exchanges and other entities dealing in virtual currencies.
Policymakers will now rely on alternative surveys and in-house forecasting models to make sense of price trends.
The government is looking to reclassify several offences under financial sector laws, including the bouncing of cheques, as civil offences rather than criminal ones to improve the ease of doing business and unclog the courts. These will then be punishable only by monetary penalties, not jail time. The Department of Financial Services has sought public comments on decriminalising 39 sections in 19 acts under its administrative purview including the Banking Regulation Act, the Reserve Bank of India (RBI) Act, the Insurance Act and the Negotiable Instruments Act.Centre eyes decriminalising cheque bounce, lesser financial offences; seeks public opinion
It will be interesting to see how RBI manages the domino effect of debt default once the the moratorium on interest and principal repayment is over.
Government measures to deal with coronavirus impact 'very positive': Former RBI Governor Bimal Jalan
Earlier this month, the government announced a Rs 20.97 lakh crore economic package, which included RBI's Rs 8.01 lakh crore worth of liquidity measures.
View: For its own political safety, if not for India’s economy, GoI must fully open the expenditure tap
In politics, as in business, the biggest risk could well be not taking one; why is GoI so afraid to spend?
Among other things, the Ordinance sought to prevent businesses that are experiencing distress on account of unprecedented situation following lockdown, from being pushed into insolvency under the Code.
RBI takes it forward from where FM Sitharaman left, announces 40 bps repo rate cut, loan freeze extension
The RBI has projected negative growth with a pick up in growth impulses in second half.
The central bank has made an initial seed contribution of Rs.250 crore to the PIFD with the other half of the fund expected to be contributed by all card issuing banks and network operators. Fund primarily to be used for development of digital payment infra in rural and north east districts of the country
"Governor Shaktikanta Das says demand has collapsed, growth in 2020-21 headed toward negative territory. Why is he then infusing more liquidity? He should bluntly tell the government 'Do your duty, take fiscal measures'," the former finance minister said in a tweet.
Loan moratorium extended, banks' group exposure limit raised, borrowing rules for states relaxed: Key RBI regulatory announcements
The Reserve Bank of India has announced an extension of the moratorium on loan EMIs by three months, i.e. August 31, 2020, making it a total of six months moratorium on loan EMIs starting from March 1, 2020. The central bank hiked the group exposure limit of banks from 25 per cent to 30 per cent and also eased the rules governing withdrawal from the Consolidated Sinking Fund (CSF) resulting in release of additional Rs 13,300 crore to the states. Watch key regulatory announcements from the RBI governor's Friday presser. (Text: ET Online/PTI)Loan moratorium extended, banks' group exposure limit raised, borrowing rules for states relaxed: Key RBI regulatory announcements
State governments maintain a Consolidated Sinking Fund (CSF) with RBI as a buffer for repayment of their liabilities.
Bajaj replaces Atanu Chakraborty, who retired on April 30.
Stimulus package fails to involve banks as frontline warriors in economic revival: RBI's central board member
Satish Marathe shared a viewpoint from analysts at rating agency Crisil's research wing, which is sceptical about the near-term benefits of the package to make his point. He said the three-month moratorium offered for loan repayments announced by Reserve Bank of India (RBI) is "not enough" and also listed out other expectations for the benefit of the banking sector.
Many lenders, particularly state-owned banks, are not in a hurry to initiate IBC proceedings.
Gandhi, who used to handle the banking regulation function at the central bank, said all the banks put together gave out incremental loans of Rs 6 lakh crore in the entire fiscal year 2019-20, when the growth had not plummeted as it is expected to now.
The Reserve Bank has mandated that all OTC foreign exchange, interest rate and credit derivative transactions, both inter-bank and client, will be reported to CCIL's trade reporting platform, according to a notification.
View: Sharp fall in the latest growth estimates is a wake-up call to GoI to ramp up its stimulus package
It will be a while before we get back anywhere near the 7-8% growth of the go-go years.
The stimulus totals to Rs 20.97 lakh crore, she said, adding this also comprises the Rs 1.92 lakh crore package of free foodgrain and cooking gas to poor and cash to some sections announced in March.
RBI policy measures aimed at calming financial markets have brought down funding costs in the corporate bond market to decadal lows.
The central bank has also sought to open the funding tap for stretched microfinance institutions (MFIs), ease bad-loan recognition norms, help states borrow more as they seek to cope with Covid-19 containment and provide relief to banks on dividend payments as well as other conditions to free up money and ease liquidity.
The central bank has reduced the liquidity coverage ratio (LCR) requirement for banks to 80 per cent from 100 per cent with immediate effect as a relief to these lenders.
RBI says moratorium facility should be extended to all unless a borrower chooses to opt out of it. Many banks are offering the option to defer the payment of loan interest and principal only to borrowers who specifically ask for it. The move could put some of the banks with high credit- deposit ratio and NBFCs struggling to roll over liabilities in a spot.
Indian economy may expand by around 5% in the next financial year,ex-RBI guv Duvvuri Subbarao said.
The highlights of the seventh bi-monthly monetary statement for 2019-20 by the RBI amid COVID-19 pandemic.
Underlining that the PAC should widely examine the Centre's actions and approach in handling the COVID-19 crisis, Chowdhury said, "The panel will study both health and economic aspects of this pandemic."
Ministry sources said that in the present economic scenario during the COVID-19 pandemic, any purported proposal of introducing a calamity cess would be nothing less than an adversity itself. This would prove to be counter-productive, as sales are already at low volume and the industry is facing a deep crisis for want of demand and likely labour challenges, a source said.
On February 20, 2020, Deputy Chief Minister O Paneerselvam who holds the finance portfolio, announced that an expert committee would be constituted to improve the tax: GSDP ratio of Tamil Nadu.
The government has already announced a Rs 20.97 lakh crore economic package, which includes Reserve Bank's Rs 8.01 lakh crore worth of liquidity measures till May 17. FM Nirmala Sitharaman said making a "realistic assessment" of economic growth would be difficult at this point of time as there is no clarity on when the pandemic would retreat.
Raghuram Rajan says migrant workers need money for vegetables, cooking oil, shelter; foodgrains not enough
India's stimulus is inadequate in providing recovery of an economy pummelled by COVID-19, Rajan said.
The central bank intervention meant it ended a tad weaker at 74.69 to the dollar.
RBI horses around with incentives for banks to buy corporate bonds by offering to not force the banks to mark these bonds to the market, and treat them as being held to maturity. This is a disincentive for active trading. If one bank with a good trading desk makes good profits on corporate bonds, it wants the trading profits recognised, not put into some accounting cubbyhole.
The RBI on Friday further eased bad-loan rules, froze dividend payment by lenders and pushed banks to lend more by cutting the reverse repo rate by 25 basis points, as it unveiled a second set of measures to support the economy hit hard by coronavirus-led slowdown.
The RBI today announced the second tranche of liquidity boost for the economy with a 25 basis point reverse repo cut. The move has been taken to allow banks to lend more. These liquidity measures are over and above the Rs 3.74 lakh liquidity boost announced in the last week of March. The RBI Governor said that the RBI continues to monitor the situation closely.RBI’s liquidity boost: Here are all the major announcements
Addressing media for a second time within a month, RBI Governor Shaktikanta Das said that the macroeconomic landscape had deteriorated severely in some areas. He also added that India still is among a handful of countries, projecting positive growth. He hoped that robust tractor sales will offset farm labour shortage and a normal monsoon will bode well for rural demand. Economic situation bleak with few ‘slivers of brightness’: RBI Governor Shaktikanta Das
The most interesting idea, however, that has emerged recently is that of a fiat cryptocurrency. This seems counter-intuitive. Digital tokens were devised to avoid the centralised payment system.
RBI Governor Shaktikanta Das announced Rs 50000 crore targeted long term repo operation (TLTRO 2.0) and mandated banks to invest at least 50% of the fund in investment-grade papers issued by smaller non-bank lenders.
Highlighting a series of reforms, including moderation in corporate tax rate, announced by the government in the last six tears to encourage investment, the minister said that the investment by local companies would instil confidence into foreign companies to put money into India.
The RBI has been conducting the OBICUS of the manufacturing sector on a quarterly basis since 2008. The RBI further said that the company level data collected during the survey are treated as confidential and never disclosed.
RBI announces second tranche of liquidity boost; cuts reverse repo by 25 basis points, Rs 50,000 crore TLTRO 2.0 for NBFCs
The Governor announced a second tranche of liquidity for NBFCs, refinancing institutions.
Banking sources said discussions are under way on the possible relief steps.
Prime Minister Narendra Modi outlined a Rs 20-lakh-crore which is 9.7 per cent of GDP support package.
The idea of self-reliance should come with the caveat of key sector focus and not an economy-wide spread. The latter would simply take us back to pre-1980 India. The final pillar of Modi’s agenda for self-reliance, demand, also needs an amendment. The idea should not be to build growth upon domestic demand alone.
Reserve Bank Governor Shaktikanta Das on Friday said about Rs 3.74 lakh crore liquidity on aggregate basis will be infused into the financial system to deal with the COVID-19 pandemic.RBI to infuse Rs 3.74 lakh cr liquidity into financial system
Subbarao asserted that India's economic recovery would be far better than most of the other countries.
According to sources, the meeting has been deferred and the new date will be informed shortly. The meeting, to be held via video-conferencing, was to discuss various issues, including credit offtake, as part of efforts to prop up the economy hit by the COVID-19 crisis.
State governments who have been facing cash-flow mismatches, get another breather from the Reserve Bank of India, after enhanced limits of liquidity support from the central bank, it has elongated the tenor and frequency of such a facility.
In an interview to PTI, Basu said inequality in India is already very high and coronavirus pandemic will make it rise further. He also suggested that the government may need monetisation by the Reserve Bank of India.
Data indicates banks are rebalancing their loan portfolio more towards retail secured lending.
Rajan says ‘monetisation’ is a good option in the short-term and within reasonable limits.
RBI deployed several conventional and unconventional tools to restore orderly conditions in financial markets and maintain normal functioning of financial intermediaries.
The central bank could, instead, have been more forthcoming on regulatory forbearances.
Chandrasekaran is learnt to have suggested that policymakers needed to go the extra mile
In relief to borrowers and banks, RBI exempts accounts with moratorium benefits from asset recognition norms for 90 days
On March 27, it had given term-loan borrowers the option of a moratorium on loan repayments for 90 days for the money due in March, April and May with the assurance that it will not affect credit scores.
The picture for non-listed firms isn’t so good, with leverage rising to 43% from 37% in 2008. The last thing one wants is to make these medium and small firms borrow more and emerge out of the Covid-19 crisis with unsustainable debt levels.
Reserve Bank of India slashed policy repo rate -- the rate at which RBI lends short term money to banks-- by a massive 75 basis points to 4.40% from 5.15% earlier, keeping in view the current lockdown situation to combat the spread of Covid-19. RBI Governor Shaktikanta Das in a remote address said that the MPC committee advanced their meeting to March 24-March 27 as compared to April1-3 scheduled earlier.RBI cuts repo rate by 0.75% to 4.40% amid Covid-19 outbreak
Make no mistake, it is a fight never seen before, Das warned while outlining the risks to Indian economy .
"In such a situation, it has become a lot more important that the banks have to improve their governance, sharpen their risk management skills and banks have to raise capital on an anticipatory basis instead of waiting for a situation to arise. "Proactively, it is necessary for both public and private sector banks to build up adequate capital buffers," Das said at SBI's banking and economic conclave.
In a statement, the RBI said presently value of goods or software exports made by the exporters is required to be realised fully and repatriated to the country within a period of 9 months from the date of exports.
A severe rate cut would not help when the demand in the economy is deficient, instead a fiscal stimulus package from the tax side would help revive the economy, Ghate indicated in the minutes of the March meetings of the monetary policy committee, released by the Reserve Bank on Monday.
It is crucial to raise capital and build buffers to ensure credit flow and resilience.
Finance Minister Nirmala Sitharaman said that to ease the worries of MSMEs that are in danger of becoming NPA accounts, it has now been decided that the NPA classification norms will exclude the 3-month moratorium window that banks are allowed to give on loan repayments.
The RBI's guidelines come after reports that app-based lenders are using underhand methods for recovery of loans during the lockdown.
The ordinance approved on Wednesday also empowers the RBI to bring cooperative banks under its supervisory powers.
Seven prominent cooperative leaders would be part of the forum. They are C P Yadav, MP and President of NCUI; U S Awasthi, MD of IFFCO; Dileep Bhai Sanghani, Chairman of NAFSCOB; Jyotindra Mehta, Chairman of NAFCUB; Satish Marathe, Director on RBI Central Board; Mangal Jit Rai, Chairman of NCDFI and Uday Joshi- National General Secretary of Sahakar Bharati.
Urban cooperative banks and multi-state cooperative banks will be brought under the RBI supervision process applicable to commercial banks, Information and Broadcasting Minister Prakash Javadekar said while briefing media about the Cabinet decisions.