RBI

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Why the RBI is in no hurry to cut interest rates (in charts)

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Inflation and interest rates

The RBI is in no hurry to cut interest rates despite inflation trending low for several months now and there being no obvious immediate reason why it should move up sharply. Raghuram Rajan, the RBI governor, may have good reasons to be cautious though, considering what happened during the previous governor D. Subbarao’s tenure. He took charge as the governor in September 2008 and stayed on for 5 years. His tenure’s start coincided with the global financial crisis. The governor and the government joined hands with a monetary and fiscal stimulus to protect India’s economy and financial markets. Continue Reading →

Filed under: Banks, Economy+Policy, Finance+Markets, News Analysis, CPI, Credit Policy, Inflation, RBI

Market crash-Part II: the RBI and government should join hands

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In the previous article, the main problems facing the government and the RBI were listed –a falling rupee, slowing growth and rising inflation. What is needed at this stage is confidence-building measures rather than the fear-inducing steps taken, such as the one imposing capital controls. Foreign investors have been caught on the wrong foot in many countries, where they were prevented from taking their dollars out. They need to be reassured that option is not on the table. Continue Reading →

Filed under: Economy+Policy, News Analysis, Government, Policy From the Regulators, RBI

RBI credit policy: no new rate hikes

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The Reserve Bank of India (link) did the predictable by holding on to rates at current levels in its quarterly monetary policy review. The repo rate has been retained at 7.25% and the reverse repo rate has been kept at 6.25%. Repo is when banks borrow from the RBI to meet temporary funds requirement and the reverse repo is when banks park surplus funds with the RBI.

 

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Filed under: Economy+Policy, Top News, Credit Policy, Interest Rates, RBI, Repo Rate

Customers Bancorp invests in Religare’s banking ambition

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NASDAQ listed Customers Bancorp Inc. is investing $51million or Rs 310 crore in the Malvinder Singh and Shivinder Singh promoted financial services company Religare Enterprises. The stake purchase comes at a time when a bunch of companies are applying for a banking license to be one of the new batch of private sector banks to enter the Indian market.

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Filed under: Banks, Companies, Top News, Banking License, RBI, Religare

RBI gives cash in hand, but not a rate cut

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The Reserve Bank of India disappointed those who were looking to it, to complete a troika of measures to lift up investor sentiment. Last week, the European Central Bank said it would buy sovereign euro bonds without any limit, and the US Federal Reserve said it would launch a quantitative easing program that would continue for as long as economic conditions remained weak. Then, the Indian government followed up with a series of reforms, including cutting diesel prices and allowing FDI in a few high profile sectors.
 

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Filed under: Economy+Policy, Top News, Credit Policy, CRR, Interest Rates, Markets Debt & Forex Markets, RBI

Indian PSU banks turn contrarian by cutting interest rates

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Some large public sector banks have begun cutting rates of fixed deposits and loans, despite no change in the Reserve Bank of India’s stance towards interest rates. The RBI has held that inflation is an overriding concern, and holding interest rates high may affect growth but will help in curbing inflation. So, what explains the action of public sector banks?

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Filed under: Banks, Companies, News Analysis, Interest Rates, RBI

RBI Credit Policy: interest rate hikes end

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The Reserve Bank of India held benchmark interest rates constant and left liquidity untouched, and did not cut the cash reserve ratios, as was being speculated. But that was not the big takeaway from the credit policy announcements.

The central bank has indicated that it is done with interest rate hikes, given signs of moderating inflation and slowing growth, and will now shift to using interest rate cuts to jumpstart growth again.

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Filed under: Economy+Policy, Top News, Credit Policy, Economy Economarkets, Interest Rates, RBI

RBI hikes repo rate, growth comes second to price stability

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The Reserve Bank of India’s credit policy announcements met expectations, except of those people who thought today will signal the end of the rate hike juggernaut. The few who feared the RBI may hike the repo rate by 50 basis points were off the mark, however. The majority were expecting a 25 basis point hike, which is what the central bank has done.

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Filed under: Economy+Policy, Top News, Credit Policy, Inflation, Interest Rates, Markets Debt & Forex Markets, RBI