Latest rbi News | Top rbi News Headlines Today | Today India news | Breaking rbi News Today | English rbi News Headlines - TheDailyGuardian

Stalin thanked the Finance Ministry for addressing his concerns on RBI’s draft gold loan guidelines

May 30, 2025, 10:45 pm

Stalin thanked Finance Ministry for addressing gold loan concerns. DFS suggested excluding small borrowers; RBI reviewing feedback with state consultations planned.

Tamil Nadu Chief Minister MK Stalin on Friday thanked the Union Finance Ministry for responding to his concerns regarding Reserve Bank of India’s draft guidelines on gold loans.

In a post on X, the Chief Minister said, “Glad to note that Finance Ministry of India has responded to the concerns raised by me in my letter to the Union Finance Minister regarding RBI’s draft guidelines on gold loans.”

“Protecting the interests of small borrowers, especially those seeking loans below Rs. 2 lakh such as farmers and daily earners and ensuring timely and accessible credit has been my consistent demand,” Stalin said.

His remarks came after the Finance Ministry in a post on X said, “Draft Directions on Lending Against Gold Collateral issued by the RBI have been examined by DFS under guidance of Union Minister for Finance and Corporate Affairs Nirmala Sitharaman.

The Department of Financial Services (DFS) has given suggestions to the RBI to ensure that the requirements of the small gold loan borrowers are not adversely affected, the Ministry stated.

It said that DFS has also stated that such guidelines will need time to implement at the field level and hence may be suitable for implementation from January 1, 2026 only.

“Further, DFS has suggested that small ticket borrowers below Rs 2 lakh may be excluded from the requirements of these proposed directions to ensure timely and speedy disbursement of loans for such small ticket borrowers. RBI is reviewing the feedback received on the Draft guidelines,” it said.

“It is expected that concerns raised by various stakeholders, as well as the feedback received from the public, will be duly considered by the RBI before finalising the Directions on the same. The suggestions have been duly forwarded to RBI,” it said.

It also stated that while appreciating the positive consideration given to this issue, we emphasize that such policies having significant impact on poor should be arrived after due prior consultation with States.

RBI Projects 6.5% Growth for India in FY26, Warns of Global Risks

May 29, 2025, 2:52 pm

According to the Reserve Bank of India’s (RBI) most recent annual report, India is expected to continue to be the fastest-growing major economy globally in 2025–26, with a forecast growth rate of 6.5 percent. This optimism stems from a strong economy, a strong financial sector, and ongoing government support in sustainable development.

However, the central bank also issued a warning: global trade conflicts, continuing geopolitical uncertainty, and market volatility could jeopardize both inflation and growth goals.

Domestic Capabilities Drive the Development Forecast

The RBI drew attention to several internal causes driving India’s robust growth. Private spending is consistently increasing. Corporates and banks have good balance sheets, therefore enabling confident lending and investing. Along with softer financial circumstances, the government’s ongoing capital expenditure push keeps supporting economic activity. These drivers advance India ahead of other major countries taken together.

Between 2024 and 2025, the RBI’s financial footprint grew by 8.2 percent; its balance sheet as of March 31, 2025 totaled ₹76.25 lakh crore. The central bank could distribute a historic ₹2.69 lakh crore dividend to the government thanks to this rise. Gold reserves increased by a remarkable 52.09 percent on the asset side, whereas domestic investments rose by 14.32 percent. Foreign investments increased somewhat by 1.70%.

Outstripping a 7.76 percent growth in expenses, the RBI’s income grew 22.77 percent during the year. This produced a sizable surplus of Rs 2.68 lakh crore, up 27.37 percent from Rs 2.10 lakh crore the year before. The document confirms the main duties of the central bank: managing reserves, issuing currency, and guiding monetary policy.

What Lies Behind the Asset and Liability Change?

Currency in circulation jumped by 6.03 percent. Other liabilities increased 23.31 percent, but revaluation reserves climbed 17.32 percent. Domestic assets comprised 25.73% of the RBI’s whole assets as of March 2025. Foreign currency holdings, gold including deposits, and foreign loans to financial institutions made up the other 74.27 percent. This combination reflects a modest change from the ratios of last year.

₹44,861.70 crore was moved this year from the RBI to its Contingency Fund. This initiative improves the bank’s capacity to absorb economic shocks and guarantees preparation in unpredictable times. It also emphasizes the RBI’s deliberate attitude toward harmonizing stability with expansion.

Growth with Vigilance

With the economy expected to head world growth once more in FY26, India’s growth story inspires still. Strong basics at work are shown in the RBI’s report—and a central bank ready to assist the rise of the economy. But with world hazards looming, the true test will be how India negotiates outside shocks while still on track for long-run, inclusive development.

How RBI’s 25 bps Rate Cut Could Save You Rs. 3.8 Lakh | TDG Explainer

April 9, 2025, 1:56 pm

Home loan borrowers can expect some relief on the finances, with the Reserve Bank of India’s (RBI) recent reduction of the repo rate by 25 basis points to 6%. The announcement made in the first monetary policy review for the financial year 2025–26 is expected to soften the interest rates of home loans, possibly below 8% annually.

While the move is encouraging for borrowers, much will depend on how banks respond. In the past, banks have been cautious about passing on the full benefit of repo rate cuts. According to a Financial Express report, a rate cut of around 50 basis points by major lenders, triggered by the RBI’s 25 basis point reduction, could bring significant relief to homebuyers weighed down by high EMIs over recent years.

HDFC Bank and Axis Bank have already assured ‘Moneycontrol’ that they have extended the entire 25-basis point advantage to their current borrowers.

Banks are required by RBI regulations to review their interest rates on at least a quarterly basis. Yet, how soon the changes apply can be different depending on specific loan agreements. New customers opting to borrow might soon enjoy better lending rates as well.

What will be the effect on EMIs

To realize the potential gains, imagine a borrower of a Rs. 50 lakh home loan for 20 years at 9% interest. The EMI here would be around Rs. 44,986. If lenders transmit a 50-basis point cut, the EMI would come down to around Rs. 43,391, reducing the borrower’s outgo by Rs. 1,595 every month. In a year, that translates into Rs. 19,140, and over the tenure of the loan, the aggregate savings could cross Rs. 3.8 lakh.

The CEO and co-founder of Freo explained that those on floating interest rate loans linked to the RBI’s repo rate are in a position to benefit. “Home loan borrowers with floating interest rates tied to the RBI’s repo rate can expect EMI reductions if the RBI cuts by 25 basis points,” he said. He also acknowledged that banks may not pass on the full benefit immediately, though borrowers will still see some relief.

Since October 1, 2019, all new floating-rate retail loans are tied to an external benchmark, which for most banks is the repo rate. The overall interest rate made available to borrowers consists of the repo rate itself, a spread based on the bank, and a credit risk premium based on the borrower’s credit score.

Borrowers With High Rates Should Refinance

Adhil Shetty, CEO of Bankbazaar.com, said in an interview with Economic Times that with the recent 25-bps rate reduction, “home loan rates [will] fall below eight percent again,” and further stated that “the lowest rates currently range from 8.10 to 8.35 percent.” He pointed out that borrowers with good credit profiles (credit score greater than 750) and those refinancing loans would be the largest gainers.

He also suggested that home owners who are paying rates at least 50 basis points more than market rates should refinance. “Repo-linked home loans are the only ones that get automatic, immediate, and full rate cuts, which can reduce borrowers’ interest payments,” Shetty said.

RBI Reduces Repo Rate by 25 bps, Adopts ‘Accommodative’ Policy Stance

April 9, 2025, 10:40 am

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) reduced the policy repo rate by 25 basis points on Wednesday at 10:00 a.m. RBI Governor Sanjay Malhotra announced the cut, bringing the key lending rate down to 6%. This is the first monetary policy in the fiscal year 2025-26 and the second consecutive rate reduction of the calendar year.

Global Trade Unrest Adds Pressure

This policy move was only after US President Donald Trump’s retaliatory tariffs kicked in, including a sharp 104% duty on Chinese imports. Markets across the globe have been on edge ever since, and the Indian central bank has not been spared either.

Trump imposed a 26% tariff on Indian goods from April 9, which could set off new inflationary pressures and decelerate trade sentiment. The RBI, in its policy statement, did recognize these external headwinds with great emphasis, underlining the necessity of acting pre-emptively.

Inflation at 7-Month Low

India’s retail inflation fell to a 7-month low of 3.61% in February 2025, coming in below the RBI’s medium-term target of 4%. This provided room for the central bank to continue easing rates. However, with the fresh tariffs and concerns over global demand, the RBI remains cautious about future price pressures.

#WATCH | Mumbai | RBI Governor Sanjay Malhotra says, ” The MPC (Monetary Policy Committee) voted unanimously to reduce the policy repo rate by 25 basis points to 6 % per cent with immediate effect.”

(Source: RBI) pic.twitter.com/rRVCJiTy0H

— ANI (@ANI) April 9, 2025

Analysts had generally anticipated a rate reduction on Wednesday, spurred by easing inflation and the urgent need to boost economic growth. The MPC had last reduced the repo rate by 25 bps in February, the first such reduction since May 2020, following a gap of two-and-a-half years.

RBI to Release Monetary Policy Report

In addition to the MPC announcement, the RBI will publish its Monetary Policy Report (MPR), which will provide more detailed insights into the central bank’s approach and its economic projections for 2025-26.

Economists have raised alarm over a possible global recession, cautioning that increased costs due to the tariffs would lower demand and damage growth prospects.

Markets Respond to Twin Pressures

Indian stock markets opened lower on Wednesday, reversing morning gains. The Nifty 50 index fell 75.55 points (0.34%) to open at 22,460.30. The BSE Sensex, meanwhile, opened lower by 123.25 points (-0.17%) at 74,103.83.

While the RBI adopts a conservative but growth-focused trajectory, global uncertainties driven by US trade policy continue to pose a threatening risk for emerging nations such as India.

February CPI Inflation Hits Seven-Month Low, Food Prices Lead Decline

March 12, 2025, 7:53 pm

India’s Consumer Price Index (CPI) inflation fell to a seven-month low of 3.61% in February 2025, beating forecasts and setting the stage for a possible second consecutive interest rate reduction by the Reserve Bank of India (RBI) in the next month, The Hindu reported.

The key contributor to this dip was a slowdown in food inflation, particularly for vegetables and proteins. Consumer Food Price Inflation (CFPI) dipped drastically to 3.75% in February from 5.97% during January, an enormous 222 basis points in a mere one-month gap.

The National Statistical Office (NSO) pointed out that food inflation in February was the lowest since May 2023, providing huge relief in food prices.

Since inflation is now reassuringly within RBI’s target corridor of 4% (+/- 2%), the central bank had already reduced the repo rate by 25 basis points just last month. Experts are now expecting another reduction in the bi-monthly monetary policy review later this month, which is dated 9 April.

RBI Fines Four NBFCs ₹76.6 Lakh for Rule Violations

March 8, 2025, 3:27 am

The Reserve Bank of India (RBI) has imposed penalties totaling ₹76.6 lakh on four non-banking financial companies (NBFCs) for non-compliance with regulations under the Non-Banking Financial Company – Peer-to-Peer Lending Platform (Reserve Bank) Directions, 2017.

The fines were levied due to deficiencies in regulatory compliance related to P2P lending platforms. However, RBI clarified that these penalties do not affect the validity of any transactions or agreements between the entities and their customers.

Breakdown of the Penalties

Fairassets Technologies India Pvt Ltd: ₹40 lakh
Visionary Financepeer: ₹16.6 lakh
Bridge Fintech Solutions Pvt Ltd: ₹10 lakh
Rang De P2P Financial Services: ₹10 lakh

The penalties were announced via separate releases issued by the central bank.

RBI’s Compliance Warning

RBI has reiterated the importance of strict adherence to its regulations governing financial services. The action serves as a warning to all NBFCs operating in the P2P lending space to maintain compliance with regulatory norms.

The affected entities have not yet responded to the RBI’s announcement.

RBI Governor Optimistic About India’s 6.7% Growth Rate

February 8, 2025, 11:26 am

Sanjay Malhotra, the governor of the RBI, said that India may now reach the 6.7% growth trend. During his remarks at the press conference after the MoP on Friday, February 7, 2025, Malhotra emphasized the need for customers to have higher expectations.

“These are tough questions to answer, but I would like to stick my neck out and say that India can certainly achieve a 6.7% growth rate, and we should aspire for it,” Malhotra said when asked whether such a target was feasible.

Full Projections

Based on the Economic Survey, the Indian government has anticipated its growth for FY 2025-26 to be around 6.3-6.8%. In contrast, RBI has raised the growth for the same period at 6.7%.

While speaking the MPC, Sanjay expressed big economic predictions such as projections made by the RBI for the inflation rate. It is likely that the FY 2024-25 is to be estimated at 4.8%, while FY 2025-26 is supposed to be projected at 4.2%.

When asked about the balance between growth and inflation, Malhotra reiterated that the RBI’s primary goal remains inflation control and price stability while maintaining economic expansion. “We will continuously focus on aligning inflation with the target while supporting growth,” he said.

Inflation to Moderate

According to Malhotra, inflation is now on a downtrend, which opens up space for a more growth-supportive policy stance.”Inflation is expected to decline further, and we will maintain a neutral stance to proactively respond to evolving macroeconomic conditions,” he stated.

The RBI stated 4.8% inflation in 2024–2025 and a fall to 4.2% in 2025–26. It has given the quarterly inflation estimates for 2025-26 as Q1: 4.5%, Q2: 4.0%, Q3: 3.8%, and Q4: 4.2%.

Food Inflation Expected to Ease with the Arrival of Favorable Rabi Crop.

First Rate Cut in 5 years

In a landmark decision, the RBI unanimously reduced the policy rate by 25 bps from 6.5% to 6.25%, its first rate cut in five years. The governor credited this action to a favorable rabi harvest, improved food price stability, and a reduction in inflationary pressures.

Reiterating the central bank’s commitment to growth and price stability, Sanjay stated, “A less restrictive monetary policy is more appropriate at this juncture,”

A favorable rabi harvest and increased food price stability, according to Sanjay, helped to ease inflationary pressures.

Reiterating the central bank’s commitment to growth and price stability, Malhotra stated, “A less restrictive monetary policy is more appropriate at this juncture,”

The RBI’s Take

According to Malhotra, the RBI’s foreign exchange policy is unchanging: it does not aim to influence the exchange rate or promote a stable and orderly market. The RBI can promote growth while controlling inflation because the macroeconomic climate is favorable and the inflation forecast is stable.

RBI to Launch ‘Bank.in’ and ‘Fin.in’ Domains to Strengthen Cybersecurity in Financial Sector

February 7, 2025, 1:11 pm

The Reserve Bank of India (RBI) announced on Friday that Indian banks will soon have a dedicated internet domain, ‘bank.in,’ while non-bank financial institutions will use ‘fin.in.’ This move aims to strengthen online financial security and combat cyber fraud.

During the unveiling of the fiscal year’s final bi-monthly monetary policy, RBI Governor Sanjay Malhotra stated that registrations for ‘bank.in’ will begin in April 2025, with ‘fin.in’ to follow.

Highlighting concerns over digital payment fraud, Malhotra emphasized that this initiative seeks to enhance trust in the financial sector. “To combat the same, the Reserve Bank of India (RBI) is introducing the ‘bank.in’ exclusive Internet Domain for Indian banks,” he said, as quoted by PTI.

The RBI believes this initiative will help curb cybersecurity threats like phishing and ensure safer financial transactions. The Institute for Development and Research in Banking Technology (IDRBT) will oversee domain registrations.

Additionally, the central bank announced the introduction of an Additional Factor of Authentication (AFA) for foreign ‘Card Not Present’ transactions to enhance security for international online card payments. “To provide a similar level of safety for online international transactions using cards issued in India, it is proposed to enable AFA for international card not present (online) transactions as well,” the RBI stated.

RBI Cuts Interest Rate, Forecasts 6.7% Economic Growth

The Reserve Bank projected a 6.7% growth rate for India in the upcoming financial year, up from the 6.4% estimate for the current fiscal.

Governor Malhotra noted that household consumption is expected to stay strong, supported by tax relief in the Union Budget 2025-26.

For the first time in nearly five years, the RBI’s monetary policy committee decided to cut interest rates. The six-member panel, led by Malhotra, unanimously voted to lower the benchmark repurchase rate by 25 basis points to 6.25%, marking the first cut since May 2020.

RBI Likely to Reduce Policy Rates Amid Easing Liquidity Stance, Says Jefferies Report

January 3, 2025, 2:03 pm

A report by Jefferies indicates that the Reserve Bank of India (RBI) is likely to cut policy rates by 50 basis points (bps) in the first half of 2025. This forecast follows the central bank’s recent decision to ease its stance on liquidity and reduce the Cash Reserve Ratio (CRR) by 50 bps during the last Monetary Policy Committee (MPC) meeting.

Shift in RBI’s Liquidity Stance

The Jefferies report states, “After easing stance on liquidity & CRR by 50bps, RBI may review policy rates; we see 50bps rate cuts in 1H25.” The report emphasizes that the RBI’s transition from a “withdrawal” stance to a more “neutral” liquidity position, along with the CRR cut to the pre-COVID level of 4 percent of Net Demand and Time Liabilities (NDTL), has created a conducive environment for potential rate cuts.

Impact on Growth and Investments

The anticipated reduction in policy rates is expected to stabilize regulatory momentum, which could be supportive of growth and investments in the near term. However, the report cautions that these policy changes may temporarily affect banks’ Net Interest Margins (NIMs). A decline of 10 bps in NIM could lead to a reduction in earnings by 3-8 percent, with Public Sector Banks (PSBs) likely to experience a more pronounced impact.

While deposit rates have remained relatively stable, banks have seen their cost of funds increase by 10-50 bps over the past year due to repricing and changes in funding mix. The report also highlights ongoing pressures on asset quality, particularly in unsecured retail loans and loans to small and medium enterprises (SMEs). Non-Banking Financial Companies (NBFCs) and smaller private banks that cater to lower-tier clients have faced greater stress compared to lenders focused on upper-tier clients.

Future Outlook on Asset Quality

Jefferies anticipates that asset quality pressures may ease in FY26, particularly in the unsecured retail loans segment. This improvement is expected as provisions for stressed assets are accounted for upfront and new disbursals slow down. The recovery of GDP growth is seen as a critical factor in alleviating pressures on SME loans. However, the Microfinance Institution (MFI) segment may continue to face challenges, potentially impacting earnings for mid-sized banks.

Overall, the expected rate cuts and easing asset quality pressures in FY26 are projected to provide tailwinds for the banking sector. Nevertheless, near-term challenges such as NIM compression and stress in the MFI segment could weigh on earnings in the interim.

RBI Faces Another Bomb Threat, Warning Delivered in Russian

December 13, 2024, 11:15 am

The Reserve Bank of India (RBI) received a bomb threat on Friday. This marks the second such incident in less than a month. Mumbai Police began investigating after the threat, sent in Russian, reached the bank’s official website via email.

Police File Case and Investigate

Authorities registered a case against an unknown individual at the Mata Ramabai Marg (MRA Marg) police station. Mumbai Police’s Zone 1 DCP stated, “A threatening email was received on the official website of Reserve Bank of India. The email was in Russian language, warned to blow up the bank. A case has been registered against unknown accused in Mata Ramabai Marg (MRA Marg) police station. Investigation into the matter is underway.”

Recent Bomb Threats in Delhi Schools

Meanwhile, Delhi schools recently faced similar bomb threats. Six schools received threatening emails earlier this week, leading to extensive searches by multiple agencies. On December 9, at least 44 schools were targeted with bomb threats. However, police later dismissed those as hoaxes.

Arvind Kejriwal Raises Concerns

Former Delhi Chief Minister Arvind Kejriwal expressed concerns about these recurring threats. He emphasized that this was the second such incident in a week. He also questioned the potential impact these threats could have on children.

Emergency Responses to School Threats

The Delhi Fire Services detailed the emergency calls received from affected schools. Calls came from:

Bhatnagar International School, Paschim Vihar, at 4:21 am.
Cambridge School, Shri Niwas Puri, at 6:23 am.
DPS Amar Colony, East of Kailash, at 6:35 am.
South Delhi Public School, Defence Colony, at 7:57 am.
Delhi Police Public School, Safdarjung, at 8:02 am.
Venkateshwar Global School, Rohini, at 8:30 am.

The incidents have prompted heightened security as investigations continue.

Shaktikanta Das Bids Emotional Farewell As RBI Governor, Shares Message To PM Modi | WATCH

December 10, 2024, 2:00 pm

Shaktikanta Das is the 25th Governor of Reserve Bank of India (RBI). Today, he is leaving RBI as he is going to retire from his position. Sanjay Malhotra was appointed as the new RBI Governor. He thanked everybody for supporting him during the tenure and thanked the government for giving him an opportunity to serve the nation.

In a social media post on X, Das said, “Will demit office as Governor RBI later today. Thank you everyone for your support and good wishes. Immensely grateful to the Hon‘ble PM @narendramodi for giving me this opportunity to serve the country as Governor RBI and for his guidance and encouragement. Benefited a lot from his ideas and thoughts.”

Acknowledging Support from Key Figures

The Prime Minister extended his heartfelt thanks to the key government figures, including Finance Minister Nirmala Sitharaman, for her unwavering support. “Heartfelt thanks to Hon‘ble FM @nsitharaman for her constant support and backing. The fiscal-monetary coordination was at its best and helped us to deal with the multiple challenges during the last six years,” he wrote.

WATCH THE VIRAL VIDEO:

VIDEO | “Team work in the Reserve Bank (of India) was perhaps, in my experience, at a very high level. I got excellent cooperation from each and every member of my RBI team, each of my colleagues did their best during the trying times of Covid. My journey as the Governor of the… pic.twitter.com/tNVlEUqbGK

— Press Trust of India (@PTI_News) December 10, 2024

Das also thanked all the stakeholders of the financial sector, economists, industry bodies, and organisations in all the sectors, including agriculture and services, for their valuable inputs and policy suggestions. It was a team effort at the RBI. This statement has concluded with a thank-you from him to the RBI team with full recognition of their collective contribution. He stated, “A BIG thank you to the entire Team RBI.

Together we steered through an exceptionally testing time of unprecedented global shocks. May the RBI rise even taller as an institution of trust and credibility. My best wishes to one and all,” he wished in closing.

Managing Global Shocks and Economic Challenges

Das took over as RBI Governor on December 12, 2018, after the sudden resignation of Urjit Patel. His most significant challenge was presented when the COVID-19 pandemic hit the world just a year after his appointment and affected economies across the globe. In response to the economic impact, Shaktikanta Das led the RBI in reducing the policy repo rate to a record low of 4% and kept interest rates low for nearly two years to support the economy during the pandemic-induced lockdowns.

As the economy began to recover, Das and the Monetary Policy Committee (MPC) raised interest rates starting in May 2022 to curb inflation and manage economic overheating, a move that reflected his adaptability to the changing economic landscape.

A Resilient Leadership in Economic Growth

His six-year tenure saw India’s economic growth at over 7% for the last four years under his leadership. His tenure was one where, unlike his predecessors, who were characterised by central bank and the Ministry of Finance’s battles, his alignment with the government’s vision for RBI’s role remained consistent throughout.

During his tenure, Shaktikanta Das also saw the highest ever dividend payout by the RBI to the government, amounting to Rs 2.11 lakh crore earlier this year, showing the strong financial position of the central bank under his leadership.

Shaktikanta Das: A Career of Service and Expertise

Before becoming RBI Governor, Das had a stellar career as an IAS officer. A postgraduate from Delhi University‘s St Stephen‘s College, he was part of the 1980 batch of the Indian Administrative Service. He has held various important positions including Secretary to the Department of Economic Affairs and the Department of Revenue. After retirement, Das has been a member of the 15th Finance Commission and has served as India‘s G20 Sherpa.

With more than 38 years of governance experience, Shaktikanta Das worked across finance, taxation, industry, and infrastructure, leaving behind a legacy marked by resilience and robust leadership.

As Shaktikanta Das steps down, his tenure as RBI Governor will be remembered for navigating India through unprecedented global challenges, ensuring economic stability, and leading with a vision for growth. His departure marks the end of an era for the central bank, leaving behind a legacy oof trust, credibility, and impactful leadership.

India’s Q2 GDP Growth Falls to 5.4% Due to Manufacturing Slump

November 29, 2024, 6:34 pm

India’s economic growth decelerated to 5.4% in the July-September quarter of FY2024-25, falling short of the Reserve Bank of India’s (RBI) 7% forecast. This marks the slowest expansion in seven quarters, prompting economists to revise their annual growth projections.

The downturn is largely attributed to a significant slowdown in the manufacturing sector, which recorded a mere 2.2% growth compared to 7% in the previous quarter. Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, noted that the disappointing corporate earnings data, especially in manufacturing, contributed to the sharp dip in GDP growth. She anticipates a marginal improvement in the second half due to festive-linked activities but expects overall GDP growth for FY25 to be around 6.2%, approximately 100 basis points below the RBI’s estimate of 7.2%.

Private consumption, accounting for about 60% of GDP, has been adversely affected by rising food inflation, elevated borrowing costs, and stagnant wage growth, leading to weakened urban demand. Retail food prices surged by 10.87% year-on-year in October, eroding household purchasing power. Despite these challenges, rural demand shows signs of recovery, bolstered by a strong agricultural performance.

Sujan Hajra, Chief Economist at Anand Rathi Shares and Stock Brokers, observed that excluding statistical discrepancies, GDP growth stands at a healthier 7.5%. He maintains a full-year growth projection of 7%, implying a 7.9% growth in the second half, driven by robust agricultural output and increased capital expenditure from both central and state governments. However, he cautions about potential headwinds, including the impact of Chinese imports and policy uncertainties following the U.S. elections, which could dampen private sector investment.

In response to the slowdown, the RBI is expected to maintain current interest rates, balancing the need to support growth while addressing elevated inflation and an uncertain global environment. The central bank remains optimistic about the medium-term outlook, suggesting that the slowdown observed in the second quarter is transitory.

Also read: ICC Meeting Adjourned Amid India-Pakistan Champions Trophy Standoff

As the fiscal year progresses, the interplay between domestic demand, inflationary pressures, and global economic conditions will be crucial in determining India’s economic trajectory. Policymakers and stakeholders will need to navigate these challenges to sustain growth and ensure economic stability.

RBI Governor Shaktikanta Das Hospitalized for Acid Reflux; Understanding it’s Symptoms, Risks, and Prevention Tips

November 26, 2024, 5:38 pm

RBI Governor Shaktikanta Das was admitted to a hospital in Chennai after experiencing severe acidity. According to an RBI spokesperson, “He is now doing fine and will be discharged in the next 2-3 hours.” The spokesperson assured that there is no cause for concern.

What is Acid Reflux?

Acid reflux occurs when stomach acid flows backward into the esophagus and throat. This backward movement can cause irritation and inflammation in the esophageal lining, leading to discomfort. Common symptoms include indigestion, heartburn, chest pain, nausea, and a burning sensation in the stomach or throat after eating.

Also Read: RBI Governor Shaktikanta Das Admitted to Hospital

Is Acid Reflux Dangerous?

Though occasional acid reflux episodes are usually harmless, frequent acid reflux, or gastroesophageal reflux disease (GERD), can cause serious complications if untreated.

Potential complications include:

Esophageal Ulcers
Chronic exposure to stomach acid can erode the esophageal lining, leading to painful ulcers. Symptoms include chest pain, heartburn, nausea, and pain during swallowing. Untreated ulcers may result in esophageal perforation or bleeding.
Esophageal Stricture
GERD-related inflammation can lead to scarring, causing the esophagus to narrow (a condition known as esophageal stricture). This makes swallowing difficult and may lead to choking or breathlessness.
Aspiration Pneumonia
Repeated inhalation of stomach acid into the lungs can cause aspiration pneumonia, a severe lung infection. Symptoms include chest pain, fever, coughing, breathlessness, wheezing, and fatigue. If left untreated, it can be life-threatening.
Esophageal Cancer
GERD increases the risk of adenocarcinoma, a type of esophageal cancer affecting the lower esophagus. Symptoms include difficulty swallowing, severe heartburn, chest pain, weight loss, and cough. Early detection is rare, as symptoms usually appear in advanced stages.

Preventing Acid Reflux

Doctors recommend the following measures to reduce acid reflux and prevent complications:

Avoid Trigger Foods: Limit fried, greasy, spicy, or fatty foods.
Adopt Healthy Eating Habits: Avoid overeating or lying down immediately after meals. Allow time for digestion.
Manage Weight: Excess weight, especially around the abdomen, can push the stomach upward, increasing acid reflux risks.
Reduce Alcohol and Caffeine: Excessive intake of both can aggravate acid reflux.
Quit Smoking: Smoking impairs the esophageal sphincter’s ability to close, allowing acid to rise.
Wear Loose Clothing: Tight-fitting clothes can increase abdominal pressure, pushing stomach contents upward.

Making these lifestyle changes can help control acid reflux and reduce the risk of severe complications.

Is RBI Launching A Rs 7 ‘Thala’ Coin To Honor MS Dhoni? Here’s The Truth Behind The Buzz

November 21, 2024, 12:47 pm

Former Indian captain and Chennai Super Kings star Mahendra Singh Dhoni is once again in the news ahead of the IPL 2025 mega auction scheduled for November 24 and 25 in Jeddah, Saudi Arabia. Social media went ballistic last week over claims that the Reserve Bank of India (RBI) was to issue a ₹7 coin in the legendary cricketer’s name as a tribute to his contribution to Indian cricket.

X’ platform shared a viral post stating that the commemorative coin was being released in honor of Dhoni. The PIB, however, fact-checked and put this claim to rest.

Sharing the image in question, PIB clarified via a tweet: “The claim made in the image is #fake. The Department of Economic Affairs has made NO such announcement.” The tweet tagged the Ministry of Finance, DD News, All India Radio News and other key government agencies to spread awareness.

Despite being fake, the claim attracted massive attention, misleading many on social media. Instances like these emphasize the importance of verifying news to avoid public confusion.

An image circulating on social media claims that a new ₹7 coin will be released to honor Mahendra Singh Dhoni for his contributions to Indian Cricket.#PIBFactCheck

✔️ The claim made in the image is #fake.

✔️ The Department of Economic Affairs has made NO such announcement. pic.twitter.com/rgFwmVUPbL

— PIB Fact Check (@PIBFactCheck) November 14, 2024

How to Identify Fake News?

Fact-checking platforms like Alt News recommend techniques such as Reverse Image Search, Search Filters, Local Verification, and Transcript Review to identify and debunk false claims effectively.

Dhoni’s IPL 2025 Preparations

But Dhoni prepares for the IPL 2025 season with CSK. Retained for ₹4 crore as an ‘uncapped’ player owing to his retirement from international cricket since the 2019 ODI World Cup, this will amount to a big cut in salary, after having earned ₹12.5 crore in IPL 2024.

In his illustrious IPL career, Dhoni has played 264 matches, scoring 5,243 runs at an average of 39.13 and a strike rate of 137.54, with 24 half-centuries.

India’s Forex Reserves Drop for Sixth Straight Week, Decline by $6.4 Billion

November 17, 2024, 2:45 pm

India’s foreign exchange (forex) reserves fell for the sixth consecutive week, reaching $675.65 billion as of November 8, according to data released by the Reserve Bank of India (RBI) on November 15. The reserves declined by $6.477 billion during the reporting week, marking a significant drop from the record high of $704.89 billion in September.

Foreign Currency Assets Experience Sharp Decline

The main component of India’s forex reserves, foreign currency assets (FCA), decreased by $4.467 billion, bringing the total to $585.383 billion as of November 8. In the previous week, the forex reserves had already seen a decline of $2.675 billion, reaching $682.13 billion.

India’s reserve position with the International Monetary Fund (IMF) fell by $14 million to $4.298 billion during the week. Special Drawing Rights (SDRs) also registered a decline of $60 million, totaling $18.159 billion. Meanwhile, gold reserves dropped by $1.936 billion, settling at $67.814 billion.

India Remains Fourth Globally in Forex Reserves

Despite the recent declines, India maintains its position as the fourth-largest holder of foreign exchange reserves globally, following China, Japan, and Switzerland. The reserves had previously reached an all-time high of $704.885 billion before the current downturn, attributed largely to RBI’s interventions to stabilize the Indian Rupee.

The RBI’s interventions, including selling dollars, are aimed at curbing sharp depreciation of the Rupee. The central bank does not adhere to a specific target level but seeks to maintain orderly market conditions. Strategic buying of dollars when the Rupee strengthens and selling during periods of weakness have contributed to the stability of the Indian currency, which was previously among the most volatile in Asia.

Estimates indicate that India’s current forex reserves are sufficient to cover about one year of projected imports, providing a robust buffer against global economic shocks. In 2023, India’s reserves increased by approximately $58 billion, contrasting with a decline of $71 billion in 2022.

The RBI’s strategy involves active management of foreign exchange reserves, primarily held in reserve currencies such as the US Dollar, with smaller portions in the Euro, Japanese Yen, and Pound Sterling. The central bank monitors the forex market closely and intervenes to prevent excessive volatility in the exchange rate of the Indian Rupee.

A decade ago, the Indian Rupee was one of Asia’s most volatile currencies. However, due to strategic interventions by the RBI, it has become one of the most stable, enhancing the attractiveness of Indian assets to investors and contributing to overall economic stability.

RBI Governor Warns of Inflation Risks and Slowing Growth

November 14, 2024, 4:51 pm

Reserve Bank of India (RBI) Governor Shaktikanta Das cautioned that while the central bank has managed a “soft landing” amid several global challenges, risks of inflation resurgence and slowing economic growth remain. Speaking at the CNBCTV18 Global Leadership Summit on Thursday, Das acknowledged that inflation could reemerge, impacting overall growth prospects.

“Soft landing has been ensured, but risks of inflation coming back and growth slowing down do remain,” said Das, highlighting the continued global challenges including geopolitical conflicts, geoeconomic fragmentation, commodity price volatility, and the ongoing impacts of climate change.

Inflation and Monetary Policy Adjustments

Das noted that central banks worldwide had tightened monetary policy in response to inflationary pressures, particularly those exacerbated by supply chain disruptions and the war in Ukraine. Despite RBI’s efforts to control inflation, food inflation continues to pose challenges, which Das emphasized in the context of the central bank’s target to reduce inflation to 4% on a sustained basis.

RBI has kept its policy repo rate unchanged at 6.5% for the 10th consecutive time. The Governor also mentioned that in the latest monetary policy statement, the RBI had anticipated higher inflation readings for September and October, which was reflected in the official data.

The next RBI monetary policy meeting is scheduled for the first week of December.

India’s External Sector Stability

On India’s external sector, Das praised the country’s stability, noting that the current account deficit (CAD) remained within manageable limits. The CAD stood at 1.1% of GDP in Q1 of 2024-25, signaling a robust external sector performance. India’s merchandise exports recovered in the first half of FY 2024-25, and services exports rose by 11%, contributing to a favorable economic outlook.

Das also highlighted that private remittances and strong capital inflows were helping contain the CAD, while also supporting foreign exchange reserves, which stood at USD 682 billion as of October 31. This amount, he pointed out, is sufficient to cover India’s external debt and approximately 12 months of merchandise imports.

Das added that the RBI is actively working on addressing climate-related risks and their potential impact on the financial sector. The central bank is set to issue final guidelines for a disclosure framework on climate-related financial risks shortly.

RBI Allows FPI Reclassification to FDI Beyond 10% Threshold in Listed Companies

November 11, 2024, 8:32 pm

The Reserve Bank of India (RBI) announced on Monday that foreign portfolio investors (FPIs) who exceed the 10% investment cap in listed Indian companies can now either reduce their holdings or reclassify the excess portion as foreign direct investment (FDI). Under existing regulations, an FPI and its investor group may invest up to 10% of a company’s paid-up equity capital on a fully diluted basis.

Operational Framework for Reclassification Rolled Out

To facilitate this transition, the RBI has introduced an operational framework, effective immediately, for reclassifying foreign portfolio investments to FDI. The framework mandates that FPIs seeking reclassification must obtain approval from the Indian government and the investee company.

Restrictions and Compliance Requirements

The facility for reclassification, however, will not be available in sectors where FDI is prohibited. FPIs wishing to reclassify must provide a clear declaration of their intent and submit relevant approvals. Notably, once reclassified as FDI, the investment will continue to be treated as FDI even if it subsequently falls below the 10% threshold.

The new regulation aims to provide flexibility for FPIs with substantial holdings, allowing them to align more closely with the FDI framework while ensuring compliance with sectoral caps and regulatory requirements.

November 2024 Bank Holidays: Check the Full List Across Indian States

November 2, 2024, 11:53 am

The Reserve Bank of India (RBI) has published the November 2024 bank holiday schedule, detailing 12 non-working days across various states for the month. These closures include regional festivals, events, and regular off-days that vary by location, encompassing all Sundays and the second and fourth Saturdays. Planning visits to the bank in advance is recommended.

November Bank Holiday Schedule

November 1 (Friday): Banks will be closed in states like Tripura, Karnataka, Uttarakhand, Jammu & Kashmir, Maharashtra, Meghalaya, Sikkim, and Manipur for festivals including Deepavali, Kut, and Kannada Rajyotsava.

November 2 (Saturday): Banks in states such as Gujarat, Maharashtra, Karnataka, Rajasthan, Sikkim, Uttarakhand, and Uttar Pradesh will be closed for Diwali, Laxmi Puja, and Govardhan Pooja. Note that this day is the first Saturday and is typically a working day.

November 3 (Sunday): All banks across Indian states and union territories will observe Sunday as a holiday.

November 7 (Thursday): In select states, including Bengal, Bihar, and Jharkhand, banks will close for Chhath (Evening Arghya).

November 8 (Friday): Some states, such as Bihar, Jharkhand, and Meghalaya, will observe bank closures for Chhath (Morning Arghya) and the Wangala Festival.

November 9 (Saturday): Second Saturday, a designated holiday nationwide.

November 10 (Sunday): Sunday, a national bank holiday.

November 15 (Friday): Banks will be closed in Mizoram, Maharashtra, Madhya Pradesh, Orissa, Chandigarh, Uttarakhand, Hyderabad (Telangana), Arunachal Pradesh, Rajasthan, Jammu, Uttar Pradesh, Nagaland, Bengal, New Delhi, Chhattisgarh, Jharkhand, Himachal Pradesh, and Srinagar in observance of Guru Nanak Jayanti, Karthika Purnima, or Rahas Purnima.

November 17 (Sunday): Sunday, a nationwide holiday.

November 18 (Monday): Banks across Karnataka will be closed for Kanakadasa Jayanti.

November 23 (Saturday): Banks will close in Meghalaya for Seng Kutsnem. Additionally, it is the fourth Saturday, observed as a holiday nationwide.

November 24 (Sunday): Sunday, observed as a holiday across all states.

The RBI classifies holidays into three main types: those under the Negotiable Instruments Act, Real-Time Gross Settlement (RTGS) Holidays, and Banks’ Closing of Accounts.

RBI Bulletin: India’s Growth Outlook Strong Amid Domestic Resilience and Geopolitical Tensions

October 21, 2024, 8:57 pm

India’s growth outlook remains strong, supported by robust domestic economic drivers, despite ongoing geopolitical tensions, according to the Reserve Bank of India’s (RBI) monthly bulletin published on Monday.

While several high-frequency indicators have shown some slackening of momentum in the second quarter of 2024-25, the slowdown is partly due to unique factors such as unusually heavy rains in August and September. However, the RBI highlighted that private investment is showing encouraging signs of recovery, and consumption spending is poised for a revival, particularly with the upcoming festival season.

Inflation Surge in September

Inflation, after staying below target for two months, surged in September. The spike was driven by a combination of an adverse statistical base effect and a resurgence in food prices. Despite these pressures, other economic indicators have remained resilient, contributing to a stable growth trajectory.

The RBI expects consumer spending to rise significantly, especially in small towns and lower-tier cities, as the festival season approaches. Although high prices may dampen some enthusiasm, many buyers are focusing on discounts, driving increased spending on wardrobe updates, electronics, home decor, and jewellery.

Packaged food companies have ramped up supply chains in anticipation of heightened demand in both urban and rural regions. While initial e-commerce sales have been modest, retailers are hopeful for a late-season push, with consumer spending expected to be around 25% higher than during the 2023 Dussehra and Diwali season.

Hiring Surge for Gig Workers

The festival season is also expected to spur a surge in the hiring of gig workers as companies prepare for increased demand.

Foreign portfolio investments (FPIs) in equities and debt were strong from June to September 2024, drawn by India’s growth prospects, a booming initial public offering (IPO) market, and India’s growing weight in global indices. Notably, India has led the global IPO market in 2024, with contributions from both small and medium enterprises (SMEs) and larger companies.

However, in October, FPIs turned net sellers, offloading Rs 3,734 crore worth of equities in India after five months of sustained buying. Despite this, several mega IPOs are lined up for Diwali, expected to keep the IPO market buoyant.

RBI Bans Flipkart founder Sachin Bansal’s Navi and Three Other NBFCs Over Pricing Policy Violations

October 17, 2024, 8:09 pm

The Reserve Bank of India (RBI) has imposed a ban on four non-banking financial companies (NBFCs), including Navi Finserv, founded by Flipkart co-founder Sachin Bansal, from sanctioning and disbursing new loans. The ban, effective from October 21, 2024, also includes Asirvad Micro Finance, Arohan Financial Services, and DMI Finance Private.

RBI’s Statement on Supervisory Concerns

In a detailed statement, the RBI explained that the action was driven by “material supervisory concerns” regarding the Pricing Policy of these NBFCs. The RBI cited violations related to the Weighted Average Lending Rate (WALR) and the Interest Spread charged over their cost of funds, which were found to be excessive and not in compliance with the central bank’s regulations.

Violations of Regulatory Guidelines

The RBI noted that the NBFCs’ practices were not aligned with the Master Directions on Microfinance Loans (2022) and the Non-Banking Financial Company–Scale Based Regulation (2023). The companies were also found to be in breach of the Fair Practices Code, with concerns related to unfair and usurious pricing, especially for small-value loans.

Further violations were observed during onsite examinations and from offsite data analysis. Issues included non-compliance with guidelines on household income assessment, loan repayment obligations, income recognition, and asset classification (IR&AC) norms. The companies were also found to have engaged in loan evergreening, improper conduct in their gold loan portfolio, and failed to meet mandated disclosure requirements on interest rates and fees.

Despite the ban on new loan disbursements, the RBI clarified that the NBFCs can continue servicing their existing customers. This includes ongoing collection and recovery processes, as long as they adhere to current regulatory guidelines.

The RBI emphasized that these restrictions will remain in place until the NBFCs demonstrate suitable remedial actions. The companies will need to provide confirmation of adherence to regulatory guidelines, particularly in terms of their pricing policy, risk management, customer service, and grievance redressal mechanisms. Once these concerns are addressed to the RBI’s satisfaction, the business restrictions may be reviewed.

This action by the RBI highlights its continued efforts to ensure fair lending practices and protect borrowers, especially in the microfinance sector. The central bank has been urging its regulated entities to maintain transparency and fairness in their pricing policies, particularly for vulnerable, small-value borrowers.

RBI Issues Guidelines to Improve Accessibility of Digital Payments for Persons with Disabilities

October 13, 2024, 4:48 pm

The Reserve Bank of India (RBI) has introduced new guidelines aimed at enhancing the accessibility of digital payment systems for persons with disabilities (PwDs). With the increasing use of digital payment platforms, the RBI has directed payment service providers (PSPs), including banks and authorized non-bank payment operators, to modify their payment infrastructure to cater to the needs of PwDs.

The RBI’s guidelines call for a review and modification of payment systems and devices, such as Point-of-Sale (POS) machines, to ensure that they are user-friendly for individuals with various disabilities. This move is in line with the Ministry of Finance’s Accessibility Standards, which aim to create an inclusive financial ecosystem.

Focus on Security and Compliance

The guidelines emphasize that while making these modifications, PSPs must ensure that security aspects of the payment systems remain uncompromised. The RBI has asked PSPs to submit a comprehensive report within one month detailing the devices that need modification and outlining a time-bound action plan for implementation.

PSPs are required to submit their action plan to the Department of Payment and Settlement Systems at the RBI and appoint a Nodal Officer to serve as the primary contact for queries and further clarifications.

Alignment with Existing Policies

These guidelines build upon the RBI’s existing Master Circular on Customer Service in Banks, which already mandates inclusive banking services for PwDs. The new directive also aligns with the “Accessibility Standards and Guidelines for the Banking Sector” issued by the Ministry of Finance earlier in February 2024.

With this initiative, the RBI aims to ensure that digital payments are more accessible and inclusive, allowing PwDs to engage with financial systems independently and securely. Further updates on the implementation of these changes are expected in the coming months.

RBI Holds Repo Rate Steady at 6.5% for the 10th Consecutive Meeting

October 9, 2024, 10:25 am

In its monetary policy meeting held on Wednesday, the Reserve Bank of India (RBI) decided to maintain the repo rate at 6.5 percent for the tenth consecutive time. However, the rate-setting panel shifted its stance from ‘withdrawal of accommodation’ to ‘neutral.’

Impact on Borrowers

This decision implies that all external benchmark lending rates linked to the repo rate will remain unchanged, providing relief to borrowers since their equated monthly instalments (EMIs) will not increase.

Nonetheless, lenders may raise interest rates on loans connected to the marginal cost of fund-based lending rate (MCLR), where the full transmission of a 250 basis points hike in the repo rate—implemented between May 2022 and February 2023—has not yet occurred.

Response to Previous Hikes

In reaction to the 250 basis points increase in the policy repo rate since May 2022, banks have adjusted their repo-linked external benchmark-based lending rates (EBLRs) accordingly. The one-year median MCLR of banks has risen by 170 basis points from May 2022 to August 2024.

Inflation Concerns

In August, while keeping the rate unchanged, the RBI’s rate-setting panel expressed concerns regarding persistent food inflation, which could potentially disrupt the disinflation trajectory. The headline inflation rate, as gauged by year-on-year changes in the all-India consumer price index (CPI), increased to 5.1 percent in June from 4.8 percent in May. This rise was primarily attributed to food inflation, which climbed to 8.4 percent in June, compared to 7.9 percent in the previous month. “The food component of retail inflation remains stubborn… food inflation contributed around 70 percent of the overall retail inflation,” stated RBI Governor Shaktikanta Das.

Changes in the Monetary Policy Committee

Last week, the government reconstituted the Monetary Policy Committee by appointing three external members: Ram Singh, Director of the Delhi School of Economics at the University of Delhi; Saugata Bhattacharya, Economist; and Nagesh Kumar, Director and Chief Executive of the Institute for Studies in Industrial Development.

M Rajeshwar Rao’s Tenure Extended as RBI Deputy Governor for One More Year

October 7, 2024, 8:19 pm

The Central government has extended the tenure of M Rajeshwar Rao as Deputy Governor of the Reserve Bank of India (RBI) for one more year, effective from October 9, 2024, or until further orders. This marks his second extension, having first been appointed to the role in September 2020 for a three-year term and receiving a one-year extension in 2023.

Rao’s Experience and Career at RBI

Rajeshwar Rao, who began his career with the RBI in 1984, has held various key positions within the central bank. He has led the Risk Monitoring Department and served as the Banking Ombudsman in New Delhi, in addition to his roles at the RBI’s regional offices in Ahmedabad, Hyderabad, Chennai, and New Delhi.

Rao holds a Bachelor of Arts in Economics and a Master of Business Administration from the University of Cochin. He is also a Certificated Associate of the Indian Institute of Bankers.

RBI is unlikely to cut rate in Oct 9 monetary policy: BoB Report

October 2, 2024, 3:02 pm

The Reserve Bank of India (RBI) is anticipated to keep both policy rates and stance unchanged for the tenth consecutive time in its upcoming October policy meeting, according to a report by the Bank of Baroda (BoB). The Monetary Policy Committee (MPC) is expected to take a cautious approach, awaiting more clarity on inflation trends before considering any rate cuts.

Inflation Remains a Key Factor

Although inflation has stayed below the RBI’s target of 4% for the last two months, BoB’s report suggests this decline is partly due to a “positive base effect.” The MPC is expected to hold rates steady in its meeting starting on October 7, with decisions to be announced on October 9.

Despite a generally favorable outlook, the report highlights that food price volatility will likely keep the RBI from cutting rates. A rate cut may only be considered in December, should inflation stabilize further.

Growth Outlook and Economic Activity

India’s economic fundamentals remain strong, with growth projected at 7.3-7.4% for FY25. However, recent indicators paint a mixed picture of economic activity. While the manufacturing Purchasing Managers’ Index (PMI) fell from 57.5 in August to 56.5 in September, services sector activity continues to expand. Vehicle and tractor sales have also moderated, while core sector output saw a contraction for the first time since February 2021.

Despite these challenges, the report suggests the overall economic outlook remains positive, and the RBI is likely to wait a few more months before reassessing the inflation trajectory and considering a potential rate cut.

In its last MPC meeting, the RBI kept the policy rates steady at 6.5%, citing concerns over inflation, which continues to stay above the target range. The current cautious approach reflects the central bank’s focus on long-term inflation and growth stability.

India’s Forex Reserves Surge by USD 66 Billion in 2024, Reaching USD 689 Billion

September 15, 2024, 6:44 pm

India’s foreign exchange reserves have seen a significant rise in 2024, gaining USD 66 billion so far this year, according to the latest data from the Reserve Bank of India (RBI). The country’s forex reserves now stand at USD 689.235 billion, marking several all-time highs in recent months.

The rise in forex reserves, which include foreign currency assets (FCA) as the largest component, is crucial in safeguarding the Indian economy from global financial shocks. Currently, India’s FCA amounts to USD 604.144 billion, while its gold reserves are valued at USD 61.988 billion.

As per estimates, the current forex reserves can cover about a year’s worth of projected imports, offering a substantial buffer for the country’s international trade and economic stability.

In 2023, India added approximately USD 58 billion to its reserves, while in contrast, 2022 saw a cumulative decline of USD 71 billion. The recovery and subsequent growth highlight India’s improved economic resilience.

Foreign exchange reserves typically consist of reserve currencies such as the US Dollar, Euro, Japanese Yen, and Pound Sterling. The RBI plays an active role in managing these reserves, intervening in the foreign exchange markets to control excessive volatility in the rupee’s value.

India’s foreign exchange strategy has transformed the Indian Rupee from one of Asia’s most volatile currencies a decade ago to one of the most stable. The RBI’s practice of buying dollars when the rupee is strong and selling them when the rupee weakens has contributed to this stability. A stable rupee attracts investors seeking predictability and improved performance from Indian assets.

India’s growing forex reserves and the efficient management of the currency reflect the country’s economic strength and preparedness to withstand global economic challenges.

RBI Introduces UPI Cash Deposits At ATMs, No Debit Card Needed

August 31, 2024, 3:14 pm

The Reserve Bank of India (RBI) has introduced a new feature allowing cash deposits at ATMs via Unified Payments Interface (UPI), eliminating the need for physical debit cards. This UPI Interoperable Cash Deposit (UPI-ICD) service was launched by Deputy Governor T. Rabi Sankar at the Global Fintech Fest 2024 in Mumbai.

According to the National Payments Corporation of India (NPCI), customers can now deposit cash into their own or any other bank account using UPI at ATMs operated by banks and white-label ATM operators. This feature utilizes customers’ mobile numbers linked to UPI, virtual payment addresses (VPA), and account IFSCs to make cash deposits more seamless and accessible.

To use this service, customers select the cash deposit option at compatible ATMs, enter their UPI-linked mobile number or virtual payment address, and deposit cash into the machine. The ATM processes the deposit and credits the specified account.

The UPI-ICD feature is available only at ATMs with cash recycler technology capable of handling both deposits and withdrawals. The service will be rolled out gradually across ATM networks as banks upgrade their machines to support this functionality.

This new feature builds on the cardless cash withdrawal capability via UPI introduced in 2023, aiming to enhance banking convenience by streamlining the cash deposit process and reducing reliance on physical cards.

RBI May Cut Rates in October: Crisil Report

August 11, 2024, 1:31 pm

The Reserve Bank of India (RBI) is anticipated to start reducing interest rates around October, contingent on stable external factors like weather conditions and global commodity prices, according to a report by Crisil, a credit rating agency. Crisil predicts that there will be “two rate cuts this fiscal year.”

The recent decision by the Monetary Policy Committee (MPC) to maintain current rates was largely influenced by elevated food inflation. The report highlights the importance of closely monitoring fluctuating weather patterns, which could impact future decisions.

Looking ahead, Crisil expects an improved macroeconomic environment, setting the stage for potential rate cuts. “The food-related challenges to rate cuts are likely to diminish as agricultural prospects seem more favorable compared to last year. The monsoon has been above normal, with rainfall 7% higher than the long-period average as of August 7, and sowing of major food grains has increased. As agricultural outcomes become clearer by September, we anticipate conditions that could lead to a rate cut,” the report from S&P’s subsidiary noted.

Currently, the RBI has kept the repo rate unchanged at 6.5%, reflecting its cautious stance amid ongoing economic uncertainties. Persistent inflation concerns, particularly in the food sector, continue to challenge the RBI’s goal of reducing inflation to its 4% target.

The report also mentioned potential risks to core inflation, including international freight costs, geopolitical tensions affecting crude oil prices, and domestic telecom tariff hikes.

Regarding economic growth, the report noted that the pace is expected to slow this year due to reduced fiscal support as the government focuses on fiscal consolidation. On August 8, RBI Governor Shaktikanta Das projected a real Gross Domestic Product (GDP) growth of 7.2% for the fiscal year 2024-25.

Governor Das stressed that the RBI remains vigilant against inflationary pressures and is prepared to take necessary measures to maintain price stability while supporting economic recovery. The MPC’s decision reflects a careful balance between controlling inflation and fostering economic growth.

Adjustments in the repo rate have a direct impact on economic growth and job creation, with lower interest rates typically encouraging economic expansion by making borrowing cheaper for businesses.

RBI Announces These Major Changes In UPI Payment This Week

August 11, 2024, 9:46 am

The Reserve Bank of India (RBI) has announced a significant increase in the transaction limit for tax payments through UPI, raising it from ₹1 lakh to ₹5 lakh per transaction. This move, expected to simplify the process of making larger tax payments digitally, was revealed by RBI Governor Shaktikanta Das during the 50th meeting of the Monetary Policy Committee. He mentioned that this increase “will further ease tax payments by consumers through UPI.”

In addition to this, the RBI has introduced a new feature called “Delegated Payments” to UPI. This feature enables a primary user to authorize another individual, referred to as a secondary user, to make UPI transactions from the primary user’s bank account, within a pre-set limit. Governor Das explained that this feature allows the secondary user to conduct transactions without needing a separate bank account linked to UPI. It is anticipated that this innovation will drive UPI adoption, especially among groups such as children and senior citizens who may not have their own bank accounts connected to UPI.

Dilip Asbe, CEO of the National Payments Corporation of India (NPCI), which manages UPI, highlighted the continuous evolution of payment systems in India by commenting on social media, “Never a dull moment for payment systems in India.” Meanwhile, PhonePe co-founder Sameer Nigam lauded the Delegated Payments feature, stating that it “will significantly accelerate UPI adoption by the next 300-400 million Indians.”

FM Nirmala Sitharaman attends RBI Board of Directors meeting

August 10, 2024, 1:06 pm

Union Finance Minister Nirmala Sitharaman on Saturday attended a meeting of members of the Central Board of Directors of Reserve Bank of India (RBI) here in the national capital.
The meeting as held after the Union Budget 2024-25 and days after the Lok Sabha passed the finance bill, with a few amendments moved by the government in the parliament.

The meeting held at the office of Reserve Bank of India and saw the participation of RBI governor Shaktikanta Das and other board of directors of the bank. The meeting is expected to discuss the budget provisions and economic situations prevailing in the country.

Earlier on August 7, expressing her confidence on the Union Budget 2024-25, Finance Minister said the approach of the government has been to bring greater simplification of tax laws and procedures and enable growth and employment in the country.

Sitharaman said the vision of Prime Minister Narendra Modi has been to establish a simple, efficient and fair technology-driven taxation regime in the country. “So, simplification and ease of compliance for the taxpayer has been the primary objective with which in the last 10 years, and this year, in the third term of PM Modi, the approach to taxation has been to simplify it, reduce the burden on taxpayer and make sure it is transparent and equitable,” she said.

“This year also, our approach has been that we bring in greater simplification of tax laws and procedures, and that we enable growth and employment in this country,” she added.
Sitharaman presented the Union Budget in Parliament on July 23.This is the first full budget of the NDA government led by PM Modi. The BJP-led alliance won a third successive term earlier this year.

Meanwhile, the RBI on August 8, decided to keep the repo rate unchanged at 6.5 per cent. This marks the ninth consecutive time the central bank has opted for stability in its monetary policy.

The decision to keep the repo rate steady comes amidst persistent concerns about inflation, which remains above the RBI’s target range.

The RBI’s Monitory policy committee has anticipated the growth rate of economy for fiscal year 2024-25 at 7.2 per cent.