🍒 MPC maintains status quo on rates : Amidst rising inflation, the Reserve Bank of India’s Monetary Policy Committee decided to maintain the status quo on key rates. “The MPC voted unanimously to leave the policy rate unchanged at 4 per cent,” said RBI Governor Shaktikanta Das on Friday, adding that it will continue its accommodative stance. The decision was taken at the bi-monthly meeting of the MPC chaired by RBI Governor Shaktikanta Das. It met between December 2-4. The policy repo rate continues to be at four per cent. The MPC had in its last meeting in October also left rates unchanged. - Business Line
🍒 RBI to extend TLTRO to 26 sectors : The Reserve Bank of India (RBI) has decided to bring the 26 stressed sectors – identified by the Kamath Committee – within the ambit of sectors eligible under on-tap Targeted Long-Term Repo Operations (TLTRO). Further, the central bank encouraged banks to synergise on-tap TLTRO scheme and Emergency Credit Line Guarantee Scheme 2.0 (ECLGS 2.0) by availing funds from the RBI under the former and seek guarantee under the latter to provide credit support to stressed sectors. - Business Line
🍒 Bank credit grows by 5.82 percent, deposits by 10.89 percent : Bank credit grew at 5.82 % to Rs 104.34 lakh crore, while deposits rose by 10.89 % to Rs 143.71 lakh crore in the fortnight ended November 20, the RBI data showed. In the fortnight ended November 22, 2019, bank credit stood at Rs 98.60 lakh crore and deposits at Rs 129.58 lakh crore. In the previous fortnight ended November 6, advances grew by 5.67 % and deposits by 10.63 %. In October, non-food credit growth decelerated to 5.6 % compared to a growth of 8.3 % in the same month of the previous year. Growth in loans to agriculture and allied activities accelerated to 7.4 % in the month from a growth of 7.1 % last year. Credit to industry contracted by 1.7 % in October 2020 as compared with 3.4 % growth in October 2019. - economic times
🍒 ED seizes absconding business tycoon Vijay Mallya’s French asset worth Rs 14 crore : Businessman Vijay Mallya’s property worth Rs 14 crore located in France has been seized under the anti-money laundering law, the Enforcement Directorate said on Friday. It said the action was undertaken by French authorities “on the request of the Enforcement Directorate” and the property bears the address: 32 Avenue FOCH in France. The value of the seized asset is Euro 1.6 million that is worth about Rs 14 crore, the central probe agency said in a statement. Investigations conducted under the Prevention of Money Laundering Act revealed that “a large amount was remitted abroad from the bank account of Kingfisher Airlines Ltd (KAL)” for creation of the asset, it said. - financial express
🍒 RBI elevates rural banks while booting risk framework : The central bank Friday sought to both broaden and deepen the size and scope of its financial systems by offering enhanced roles and frameworks to two extreme ends of the complexity spectrum - regional rural banks and credit default swaps (CDS). The market had already factored in an enhanced role for mutual funds and insurance companies in managing surplus liquidity generated by the central bank purchases of bonds and foreign currency. But Mint Road did one better: It allowed in a new participant, the regional rural banks. These were so far not permitted to access the liquidity windows of the Reserve Bank and the call/notice money market. To facilitate more efficient liquidity management by the rural-focused lenders at competitive rates, the central bank said it will also extend the Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) to these lenders. They will also be permitted to participate in the call/notice money market, both as borrowers and lenders. Detailed instructions will be issued shortly. - economic times
🍒 Reserve Bank to consider new framework for its numerous banking proxies : India’s central bank Friday proposed a scale-based regulatory framework for shadow lenders, underscoring their increasing importance in driving financial inclusion, as banking gets increasingly interconnected with the last-mile financiers that are helping millions step on to the consumption ladder. "There are rapid developments in the last few years, which have led to significant increase in size and interconnectedness of the NBFC sector. There is, therefore, a need to review the regulatory framework in line with the changing risk profile of NBFCs,” the central bank said in its statement on developmental and regulatory policies that accompanied Friday’s monetary policy review. A discussion paper on the framework, which will use NBFC size as the primary filter, will be out by January 15 for comments. “It is felt that a scale-based regulatory approach linked to the systemic risk contribution of NBFCs could be the way forward,” the central bank said. “It has been decided to carry out consultation with stakeholders before finalising the revised regulatory framework." Governor Shaktikanta Das also focused on the need for this sector to be robust.- economic times
🍒 RBI yet to take call on working group's suggestion of corporates running banks : The Reserve Bank of India governor Shaktikanta Das on Friday categorically stated that the view of the internal working group (IWG) on private bank ownership should not be seen as the regulator’s view. It emphasised that the RBI is yet to take a call on the suggestions made by the IWG. “It is a report by an internal working group (IWG) of RBI, it should not be seen as RBI’s point of view or decision,” Das said. “The IWG had two external members, who are also members of the RBI central board and they have had their independent deliberations.” Das stressed that RBI will have a consultative stance and will consider stakeholder comments before arriving at any decision. - economic times
🍒 Governor Shaktikanta Das wants banks to improve corporate governance and risk standards : The Reserve Bank of India governor Shaktikanta Das on Friday stressed on the need for banks and other financial institutions to improve their corporate governance and risk standards. In light of the recent system outages at HDFC Bank and State Bank of India the governor also said that all financial institutions should invest more in upgrading their IT infrastructure. “If you want to remain competitive in the coming years, tech is the key, robustness of your IT system is the key,” Das said. “Banks, NBFCs and other financial entities need to invest more in tech and strengthen all their systems so that public confidence is maintained. Going forward the entire financial landscape will be IT-dependent.” - economic times
🍒 RBI asks banks to retain profit, not make any dividend payment for FY20 : In view of the economic shock caused by the COVID-19 pandemic, Reserve Bank of India (RBI) on Friday asked scheduled commercial banks and co-operative banks not to make any dividends for the financial year ended March 2020. In view of the ongoing stress and the heightened uncertainty on account of the pandemic, RBI said it is imperative that banks continue to conserve capital to support the economy and absorb losses, if any. The decision is based on review of the September quarter financial performance of banks. In response to the pandemic, RBI has focused on resolution of stress among borrowers, and facilitating credit flow to the economy, while ensuring financial stability, RBI Governor Shaktikanta Das said. "In continuation of this effort and to help banks conserve capital, while creating room for fresh lending, it has been decided after a review that commercial and co-operative banks will retain the profits and not make any dividend pay-out from the profits pertaining to financial year 2019-20," he said. Guidelines on the above measure will be issued shortly. - economic times
🍒 RBI to come out with digital payment security control directions: Shaktikanta Das : RBI Governor Shaktikanta Das on Friday said the central bank will be introducing digital payment security control directions for regulated entities. Such a move will improve the security of digital payment channels and also convenience for users, Das said in a statement released after the bi-monthly review of the monetary policy in which RBI opted for a status quo in rates. “These directions will contain requirements for robust governance, implementation and monitoring of certain minimum standards on common security controls for channels like internet and mobile banking, card payments, etc,” Das said. - economic times
🍒 RTGS to be made available 24X7 in next few days: RBI Governor : In a business friendly move, the Reserve Bank of India on Friday said that the Real Time Gross Settlement (RTGS) system, used for large value transactions, will be made available round-the-clock in the next few days. In December 2019, the National Electronic Funds Transfer (NEFT) system was made available on a 24x7x365 basis. Currently, RTGS is available for customers from 7.00 am to 6.00 pm on all working days of a week, except second and fourth Saturdays of every month. RBI Governor Shaktikanta Das said RTGS system will soon be made available 24x7 in the next few days... with this enablement, it is proposed to reduce settlement and default risk in the system by facilitating settlement of AePS, IMPS, NETC, NFS, RuPay, UPI transactions on all days of the week instead of five days earlier." - economic times
🍒 DBS Bank India gets Rs 2,500 cr capital support from parent for LVB merger : DBS Bank India Limited (DBIL) on Friday said it has received capital infusion of Rs 2,500 crore from DBS Bank Limited, Singapore to support its amalgamation with Lakshmi Vilas Bank (LVB). The scheme of amalgamation came into effect on November 27, 2020. DBIL said it is well-capitalised, and its capital adequacy ratios (CAR) remains above regulatory requirements after the amalgamation. "The amalgamation provides stability and better prospects to LVB's depositors, customers and employees following a period of uncertainty," it said in a release. - economic times
🍒 Hike in contactless transaction limit to further digital drive: Industry : The RBI allowing a higher contactless transaction limit of Rs 5,000 against Rs 2,000 currently will drive digital payments further in the country and shows the central bank's commitment to promote a less-cash economy, industry players said on Friday. The Reserve Bank at its bi-monthly monetary policy proposed to enhance the contactless card transaction limit from Rs 2,000 to Rs 5,000 from January 1 in order to further the adoption of digital payments in a safe and secure manner. "This is a welcome step by the RBI to increase transactions and e-mandate limit. The increased limit will also help to boost the average value of transaction and push the adoption of digital payments. This step re-affirms the commitment of the country to become a less-cash economy," said Dilip Asbe - MD & CEO, National Payments Corporation of India (NPCI).- economic times
🍒 RBI revises FY21 GDP growth upwards to -7.5% from -9.5% : The Reserve Bank of India (RBI) expects second half (H2) growth to turn positive as economic recovery has been faster than anticipated. It has revised the FY2021 GDP growth estimate to -7.5 per cent against -9.5 per cent projected earlier. The central bank has projected third quarter (Q3) growth at 0.1 per cent (-5.6 per cent projected earlier) and fourth quarter (Q4) growth at 0.7 per cent (0.5 per cent). In an indication that inflation will continue to remain sticky, the central bank has revised CPI inflation band for H2 to 5.2-4.6 per cent from 5.4-4.5 per cent earlier. - Business Line
🍒 Realtors hail RBI decision to hold rates : The Reserve Bank of India’s (RBI) decision to maintain the policy rate is in line with the real estate sector’s expectations as the sector is just recovering and is yet to bounce back to pre-Covid-19 levels, said Ramesh Nair, CEO & Country Head, JLL. “Residential real estate witnessed initial signs of recovery with sales increasing by 34 per cent in Q3 2020 over Q2 2020. Today’s RBI’s decision to hold the rate will help homebuyers to avail themselves of the benefit of the prevailing lowest mortgage rates. Green shoots of recovery, armed with other incentives such as stamp duty reduction in some States and the flexibility of developers in offering best prices/payment schemes will help in further improving home sales,” he added. - Business Line
🍒 RBI Governor on HDFC Bank action: Public confidence in digital banking has to be maintained : Reserve Bank of India Governor Shaktikanta Das on Friday said the need to maintain people’s confidence in digital banking led to the recent action against HDFC Bank. The RBI team is also studying the outage at State Bank of India, he further said. “In the case of HDFC Bank, there were earlier episodes also. HDFC Bank has an overwhelming presence in the digital payment segment, in the internet banking segment. We have some concerns about certain deficiencies. It is necessary that HDFC Bank strengthens its IT systems before expanding further,” Das told reporters. “We can not have thousands and lakhs of customers who are using digital banking to be in any kind of difficulty for hours together and especially when we are ourselves giving so much emphasis on digital banking. Public confidence on digital banking has to be maintained,” Das further explained. - Business Line
🍒 ‘Investor response to PMC Bank resolution positive’ : Potential investors’ response to the Expression of Interest (EoI) floated by the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank for investment/ equity participation for reconstructing the bank looks positive at this point of time, according to Reserve Bank of India (RBI) Governor Shaktikanta Das. To a specific question as to why YES Bank and Lakshmi Vilas Bank could be resolved quickly but not PMC Bank, Das said the situation in PMC Bank was completely different. “The last date for submission of EoI is December 15. Let us see what is the response and after that we can take a view on this,” said the Governor. - Business Line
🍒 ADB approves $190 million loan to upgrade power distribution in Bengaluru : The Asian Development Bank (ADB) has approved a combined sovereign and non-sovereign loan of $190 million to modernise and upgrade the power distribution system in Bengaluru. Though ADB has supported several power distribution projects in India since 2010, this combination of sovereign and non-sovereign loans is being deployed on a pilot basis for the first time. “The ADB assistance for the Bengaluru Smart Energy Efficient Power Distribution Project includes $100 million sovereign loans and $90 million without sovereign guarantee loan to Bangalore Electricity Supply Company Limited (BESCOM), one of five state-owned distribution utilities and the largest in the State,” an ADB statement said. - Business Line
🍒 Nifty, Sensex up ahead of monetary policy decision : Indian shares edged up on Friday, ahead of a central bank decision that would potentially leave interest rates unchanged in the face of stubbornly high inflation and a slowing economic contraction. All 53 analysts and economists in a Reuters poll conducted in November said they do not expect any change in rates at the three-day policy meeting ending Friday, with the next rate cut now seen in the April-June quarter. The NSE Nifty 50 index rose 0.31 per cent to 13,174.65 as of 0345 GMT, while the S&P BSE Sensex was up 0.29 per cent at 44,763.11. - Business Line
🍒 Sensex hits 45,000 on massive FPI buying : The BSE Sensex, a key barometer of India’s stock markets, scaled the 45,000 mark on Friday. The exuberance it has witnessed in recent days comes on the back of massive buying of stocks by foreign portfolio investors (FPI). Covid-related nervousness has been discounted by the street in India as well in the global stock markets. On Friday, more than 400 stocks hit the upper circuit as investors rushed to buy even small and mid-cap counters The Sensex closed at 45,079 points after gaining 446 points, or 1 per cent. The broader index Nifty gained 0.95 per cent, or 124 points, to reach 13,258. The RBI move to keep key rates unchanged was also cheered by the market. PSU stocks including GAIL, HPCL and BPCL have witnessed a strong rally in the past couple of trading sessions. - Business Line
🍒 Rupee settles 13 paise higher at 73.80 against US dollar : The rupee snapped its two-day losing streak to close 13 paise higher at 73.80 (provisional) against the US dollar on Friday as the Reserve Bank of India maintained status quo on the benchmark interest rate for the third time in a row. At the interbank forex market, the domestic unit opened at 73.81 and saw an intra-day high of 73.70 and a low of 73.81.
🍒 Forex reserves down $469 mn to $574.82 bn : After touching a lifetime high in previous week, the country’s foreign exchange reserves declined $469 million to $574.821 billion in the week ended November 27, RBI data showed. In the previous week ended November 20, the reserves had increased by $2.518 billion to touch a record high of $575.29 billion. In the reporting week, the reserves declined despite an increase in foreign currency assets (FCA), a major component of the overall reserves. FCA rose by $352 million to $533.455 billion, according to the weekly data by the Reserve Bank of India (RBI).
🍒 Gold Prices Slide Rs 116 To Rs 49,316 Per 10 Gram, Silver Declines : Gold prices declined by Rs 116 to Rs 49,316 per 10 gram in the Mumbai retail market on rupee appreciation and subdued global trend. The precious metal prices traded flat to positive during the day around $1,840 in overseas market tracking weakness in the US dollar. The rate of 10 gram 22-carat gold in Mumbai was Rs 45,173 plus 3 percent GST, while 24-carat 10 gram was Rs 49,316 plus GST. The 18-carat gold quoted at Rs 36,987 plus GST in the retail market. Silver prices eased Rs 54 to Rs 63,064 per kg from its closing on December 3..
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