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Forex reserves fall $113 mn to $479.45 bn

Forex reserves fall $113 mn to $479.45 bn In the previous week, the reserves had increased by $3.09 billion to $479.57 billion. After rising for the past few weeks, the country’s foreign exchange reserves declined $113 million to $479.45 billion in the week to April 24, due to a fall in foreign currency assets, according to the latest data from the Reserve Bank of India. In the previous week, the reserves had increased by $3.09 billion to $479.57 billion. The reserves had touched

RBI gold reserves up 40.4 tonnes in 2019-20

RBI gold reserves up 40.4 tonnes in 2019-20, more than half of total holdings held overseas Context The RBI’s total gold reserves were 612.56 tonnes in the preceding fiscal ended March 2019. With the addition of more stocks, the value of gold reserves rose to $30.57 billion (around Rs 2,32,000 crore) by March 2020 from $23.07 billion in March 2019. News The Reserve Bank of India (RBI) bought 40.45 tonnes of gold in financial year 2019-20, taking its total holdings of the yellow

RBI slashes the lending rates

RBI slashes the lending rates Part of: GS-III- RBI-INFLATION (PT-MAINS-PERSONALITY TEST) The RBI Governor Shaktikanta Das said that the six-member Monetary Policy Committee voted 5:1 in favour of 40 bps cut in interest rate. The RBI Governor said, measures announced can be divided into four categories-to improve functioning of markets, to support exports and imports, to ease financial stress by giving relief on debt servicing and better access to working capital and to ease financia

7.75% RBI Bonds

What RBI discontinuing 7.75% saving bonds means to investors Introduction After the cut in deposit rates by the banks and a cut in small savings rate by the government over the last couple of months, the Reserve Bank of India on Wednesday said the Government of India has discontinued 7.75 per cent savings (taxable) bonds, 2018 for subscription with effect from the close of banking business on Thursday. The move will deprive investors of another saving instrument that yielded relative

RBI to tighten rules for home finance firms

RBI to tighten rules for home finance firms The Reserve Bank of India (RBI) has proposed stringent norms for housing finance companies by mandating 75% of their home loans to individual borrowers by 2024. Housing finance company A housing finance company is considered a non-banking financial company (NBFC) under the RBI’s regulations. A company is treated as an NBFC if its financial assets are more than 50% of its total assets and income

Reinforcing RBI’s accountability

Reinforcing RBI’s accountability Context: The article analyzes the inflation targeting role played by the Reserve Bank of India. Inflation targeting in India: Inflation targeting is a monetary policy strategy used by central banks for maintaining inflation at a certain level or within a specific range. With many central banks adopting it, inflation targeting has emerged as an important monetary policy framework. This approach was in contrast with the multiple indic

Current challenges faced by RBI in COVID Pandemic

Current challenges faced by RBI in COVID Pandemic Duvvuri Subbarao is a former Governor of the Reserve Bank of India The Reserve Bank of India (RBI) embarked on an extraordinary expansionary policy to manage the financial pressures unleashed by COVID-19. It slashed policy interest rates aggressively, flooded the market with an unprecedented amount of liquidity and instituted a slew of measures for targeted assistance to especially distressed sectors. Must be a deliberative process

RBI and Financial Stability Report

RBI and Financial Stability Report On Monday, the Reserve Bank of India (RBI) released the 22nd issue of its biannual Financial Stability Report outlining the risks to financial stability as well as the resilience of the financial system in the contemporary context. In his foreword, RBI Governor Shaktikanta Das flagged the many risks ahead, including the recent, accentuating “disconnect between certain segments of financial markets and the real economy”. Mr. Das warned, &

RBI on prioritising economic growth

RBI on prioritising economic growth Present Stance of RBI The RBI’s Monetary Policy Committee (MPC) has expectedly yet again left benchmark interest rates unchanged and reiterated that it will continue with its accommodative stance (cheap money policy), at least into the next fiscal year, in order to secure a sustained economic recovery. The central bank’s rate setting panel has reasoned that while there are promising signs in the welter of data that it has looked at, the

IDBI Bank out of Prompt Corrective Action Framework

IDBI Bank out of Prompt Corrective Action Framework Reserve Bank of India(RBI) has taken out IDBI Bank from the prompt corrective action(PCA) framework subject to certain conditions. Prompt corrective action Framework: Banks with weak financial metrics are put under the PCA framework by the Reserve Bank of India It aims to check the problem of Non-Performing Assets (NPAs) in the Indian banking sector. When was the PCA framework introduced? The RBI introduced the PCA fram

RBI announced measures to protect Small businesses, MSMEs to get relief

RBI announced measures to protect Small businesses, and MSMEs to get relief RBI announced measures to protect small and medium businesses and individual borrowers from the adverse impact of the intense second wave of COVID-19 buffeting the country. In an unscheduled address, RBI Governor Shaktikanta Das unveiled a Resolution Framework 2.0 for COVID-related stressed assets of individuals, small businesses and MSMEs and also expressed the central bank’s resolve to do everything at it

RBI measures against COVID-19

RBI measures against COVID-19 The RBI Governor Shri Shaktikanta Das today announced a series of measures to support the nation’s fight against the second wave of COVID-19 infections. 1. Term Liquidity Facility of 50,000 crore to Ease Access to Emergency Health Services Term Liquidity Facility of Rs. 50,000 crores with tenure of up to 3 years, at repo rate, to ease access to emergency health services, for ramping up COVID-related health infrastructure & services. Ba

Consumer Confidence Survey- RBIs policy statement

Consumer Confidence Survey- RBIs policy statement Introduction The RBI’s latest policy statement underscores the diminishing options available to it to address the economic fallout from the COVID-19 pandemic. Accommodative monetary policy The bank’s Monetary Policy Committee left benchmark interest rates and reiterated that it would keep its policy stance accommodative ‘as long as necessary to revive and sustain growth on a durable basis’. Since it

RBI gives Rs. 99,122 crore surplus to Government

RBI gives Rs. 99,122 crore surplus to the Government The Reserve Bank of India’s board approved a significantly higher-than-expected surplus transfer to the government on Friday but it may not be enough to cushion the damage from a crippling second wave of the novel coronavirus. The surplus distribution policy of the RBI is determined in accordance with Section 47 of the RBI Act, 1934. The RBI announced a surplus transfer of ?99,122 crore for the 9-month period from July 2020 to

Payment Aggregator Cross Border (PA-CB)

Recently, the Reserve Bank of India (RBI) announced that it would directly regulate entities facilitating cross border payment transactions. Payment Aggregators – Entities that enable e-commerce sites and merchants to accept various instruments from customers to complete their payment obligations without the need for the merchants to create their own systems. Payment Aggregator-Cross Border (PA-CB) – Entities that facilitate cross-border online payments for import a

Risk Weights

Reserve Bank of India (RBI) has increased the risk weight of commercial banks and non-banking financial companies’ (NBFC) unsecured loans from 100% to 125% as a preventive measure against possible NPAs. Risk Weights – It is the risk associated with every rupee lent by the bank on its capital position. Risk Asset Ratio System – It was introduced by RBI in 1992 for banks including foreign banks as a capital adequacy measure in line with the Capital Adequacy

RBI on Rs. 2000 bank notes

More than 97% of the Rs. 2,000 bank notes have returned on the deadline (October 31, 2023) of circulation withdrawn of Rs. 2,000 bank notes by RBI. However, the window for deposit and/or exchange the Rs. 2,000 banknotes continues to be available at the 19 Issue Offices of RBI. The RBI reiterated that Rs. 2000 bank notes continue to be legal tender.

UPI Payment Limit

The Reserve Bank of India (RBI) recently enhanced the UPI payment limits for healthcare and education from Rs.1 lakh to Rs.5 lakh. The limit on recurring e-payment mandates for credit card and insurance premia payments as well as mutual fund investments to Rs.1 lakh from the current limit of Rs.15,000.

Connected Lending (CL)

RBI’s move to consolidate the scattered laws on connected lending is welcome. CL refers to persons who are in the position to control the decision of the lender. CL is the extension of credit to individuals or firms connected through ownership or the ability to exert control, whether direct or indirect. CL refers to cases where the director of a bank borrows from the same bank and can have some influence. Examples of connected parties include a firm’s parent, major sha

Inoperative account by RBI

A savings or current account is treated as inoperative, if there are no ‘customer induced transactions’ in the account for a period of over 2 years. A customer induced transaction can be a financial transaction initiated by or done at the Behest of the account holder by the bank or third party, or A non-financial transaction, or A KYC (know your customer) updation done in face-to-face physical mode or through digital channels such as internet b