SKS Microfinance Ltd, India’s leading lender in the microfinance sector, announced to the stock exchanges that it is lowering the maximum interest rate it charges to its borrowers across the country. It will now charge a flat rate of 12.5% or an effective rate of 24.55% to all borrowers. It has also waived off all other charges such as credit shield charge, loan processing fee and card fees. Continue Reading →
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RBI lowers liquidity but leaves rates unchanged
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The Reserve Bank of India announced its quarterly monetary policy today. It left benchmark rates unchanged, like the repo rate (the rate at which banks borrow from the RBI) and the reverse repo rate (the rate at which banks park their surpluses with the RBI. What it did was to hike the cash reserve ratio by a good 75 basis points, taking out Rs 36,000 crore from the banking system. Cash reserve ratio is the proportion of deposits that banks must set aside as a reserve. Apart from this, the RBI has not made any changes and the Annual Policy will be announced on April 20. Continue Reading →
Filed under: Economy+Policy, Top News, Credit Policy, Inflation, Interest Rates, Monetary Stimulus, RBI
Food inflation soars, at 15.6%
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The intertwining of agriculture and politics has usually meant that farmers and the consumers, especially those at the margin, suffer from government action or inaction. Food prices have been rising for a long period, at least a year, and show no signs of abating.
Today, the government announced the wholesale price index data (WPI) for the week ended November 14.
Filed under: Economy+Policy, News Analysis, Fuel prices, Inflation, Interest Rates, Markets Debt & Forex Markets, RBI, WPI
RBI leaves rates unchanged but talks down expectations
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The Reserve Bank of India left benchmark interest rates untouched in its quarterly credit policy statement, released today. That was as expected. But RBI Governor D. Subbarao, has made it clear that once clear signs of a recovery are evident, and if prices are ruling higher, the RBI will move swiftly to hike rates. At present, it is holding back pre-emptive action, to give room for consumers to borrow and buy and thereby generate demand for industries to grow. Continue Reading →
Filed under: Economy+Policy, News Analysis, Credit Policy, D Subbarao, Inflation, Interest Rates, Policy From the Regulators, RBI
Provident Fund interest in 2009-10 will be 8.5%
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Private sector employees have an annual pastime, speculate on how much interest their provident fund balances will earn. This year, they know it at the beginning of the year itself. They have been given some good news, ahead of the budget. The Central Board of Trustees (CBT) has recommended to the government, to continue with last year’s interest rate. They will get an interest rate of 8.5% on their provident fund balances.
Filed under: Economy+Policy, Quick News, EPFO, Interest Rates, Markets Debt & Forex Markets, Provident Fund
RBI expects inflation at 4% by year end; lowers rates to make borrowing cheaper
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RBI’s credit policy came with some welcome measures. India’s central bank has taken the following monetary policy measures:
Filed under: Credit Policy, Inflation, Interest Rates, RBI, Repo Rate
RBI’s credit policy stands still
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The Reserve Bank of India announced its third quarter review of the monetary policy today, disappointing the rate-cut hopefuls by leaving all key benchmarks unchanged. In the past few months, the central bank has provided enough leeway, by reducing interest rates and adding to cash in the banking system, for banks to start lending again.
Filed under: Economy+Policy, Top News, Credit Policy, CRR, Interest Rates, Markets Debt & Forex Markets, RBI, SLR
Booster Dose #2: RBI cuts rates, eases credit availability, warns of painful adjustment
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On Saturday, the RBI presented its part of the stimulus package, a combination of interest rate cuts, credit flow improvement, relief to exporters and rescuing banks from showing red ink on their books. Since mid-September, the RBI claims to have made available primary liquidity of Rs 300,000 crore. While the October crisis has blown over, when money evaporated from the system, it still does not appear as if there is money sloshing around.
Filed under: Economy+Policy, Top News, Interest Rates, Markets Debt & Forex Markets, Monetary Stimulus, RBI, Repo
Tata Motors opens public fixed deposit tap
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Company fixed deposits (FD) were once hot with companies and investors. They enticed investors with slightly higher interest rates and offered a little more to shareholders and investors. But as the fund raising options before corporates increased and India entered into a stable and falling interest rate regime, companies began to close their FD schemes. The main reasons were the slightly higher interest rates, commission to agents, administrative costs and compliance which made it unatttractive.
Filed under: Companies, Quick News, Fixed Deposit, Interest Rates, Tata Motors
RBI pours cash, govt readies for more goodies for banks
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India’s economic actions today resembled that of the US today: concerted action to restore confidence in the monetary system. Strange, that the system should have been exposed to be so weak when we supposedly had none of the rot that had permeated the US banking system. Makes one really wonder what went wrong. Maybe we will get to know sometime; at present all one knows is that there is a liquidity crunch, which is being blamed on various factors, ranging from rising credit demand, drying overseas fund markets, FII outflows and whatever else. Continue Reading →