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<ul><li>The <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> has removed the charges levied to process any online transaction through <keyword id="285745" type="ORGANIZATION" weightage="20" keywordseo="NEFT">NEFT</keyword> and <keyword id="6356014" type="ORGANIZATION" weightage="20" keywordseo="rtgs">RTGS</keyword> system. </li><li>The Central Bank has also decided to set up a committee to review the charges for using the ATM machine. </li></ul>The Reserve Bank of India (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>) today paved the way for cheaper online fund transfers as it removed charges levied on NEFT and RTGS transactions. And, banks will be expected to make it cheaper for customers to perform these transactions too. “In order to provide an impetus to digital funds movement, it has been decided to do away with the charges levied by the Reserve Bank for transactions processed in the RTGS and NEFT systems. Banks will be required, in turn, to pass these benefits to their customers. Instructions to banks in this regard will be issued within a week,” RBI said on Thursday. The Reserve Bank levies minimum charges on banks for transactions routed through its RTGS and NEFT. Banks, in turn, levy charges on their customers. The decision to scrap the fees levied on RTGS transaction comes days after RBI extended the timings for doing RTGS transaction. Currently, the fee for transferring funds using RTGS varies according to the time. There is no fee between 8 am to 11 am. The fee for transfer of funds during 11 am to 1 pm is ₹2 whereas from 1 pm to 6 pm is ₹5. The fee for transaction after 6 pm is ₹10. Review ATM Charges The Central Bank has also decided to set up a committee to review the charges for using the ATM machine. The committee will be chaired by Chief Executive Officer, Indian Banks’ Association (IBA), who will examine the entire issue related to ATM charges and fees. “Usage of ATMs by the public has been growing significantly. There have, however, been persistent demands to change the ATM charges and fees,” the central bank said in a statement. Earlier today, The Reserve Bank of India decided to reduce the repo rate for the commercial banks by 25 basis points (bps) to 5.75% in its second monetary policy review of the current fiscal. The RBI changed its monetary policy stance from neutral to accommodative, ruling out the chances of a rate increase. See also: <a href="https://www.businessinsider.in/rbi-cuts-repo-rate-by-25-bps-as-largely-expected/articleshow/69671872.cms">RBI surprises markets with a change in stance — aims to revive India's 'animal spirits'</a> <a href="https://www.businessinsider.in/rbi-to-extend-rtgs-deadline-to-6-p-m-from-june-1/articleshow/69553735.cms">RBI to extend RTGS deadline to 6 p.m. from June 1</a>

RBI moves to make online bank transfer cheaper, to review ATM charges

New Delhi, Apr 21 () The loan moratorium extended by banking regulators in countries like India and China to deal with the liquidity crunch amid COVID-19 crisis will provide temporary relief to borrowers, but will constrain banks from taking proactive recovery actions and could lead to an even greater build-up of credit losses once the moratoriums are lifted, according to Moody's.In a report on Asia Pacific region, Moody's on Tuesday said while policy stimulus will shore up credit quality for larger companies in sectors, including airline and oil and gas, Asia's banking sector profitability will also decline from deteriorating asset quality and lower net interest margins."Financial regulators in China, Australia, Malaysia, India and some other Asian economies have enacted debt moratoriums to soften the liquidity crunch for businesses and households. While repayment delays will provide temporary relief to borrowers, these directives will also constrain banks' abilities to take proactive restructuring and recovery actions. These measures also could lead to an even greater build-up of credit losses once the moratoriums are lifted," Moody's said. Moody's Investors Service further said this risk will increase substantially if the economic downturn, and measures to contain the spread of the coronavirus, persist for longer than expected."In the event of heightened banking sector distress, Asian governments will likely stand behind larger, systemically important banks. We view government support as stable in most of the banking systems that we monitor, reflecting our expectation of extraordinary support, should it be required, to avert financial contagion," it added.To give relief to borrowers hit by COVID-19 lockdown, the Reserve Bank of India (RBI) last month announced that EMI payments for all term loans, including retail and crop loans and working capital payments, will have the benefit of three-month moratorium. Stating that Asia's banking systems will face a much more difficult landscape, Moody's said weaker economic prospects and widespread financial market upheaval will translate into a more adverse credit landscape over the coming quarters. "While the region's banks generally have adequate capital and liquidity buffers to weather the crisis, reduced business activity, lower (or more volatile) asset prices and higher unemployment will weigh on debt affordability and loan repayment. "Banking sector profitability will also decline because of higher loan-loss provisions from deteriorating asset quality, lower net interest margins due to lower policy rates, and lower fee income on subdued business activity," said Moody's, which has a negative outlook on 16 banking systems in the Asia Pacific region.Moody's said although Asia's external and fiscal buffers are generally more robust than those in other regions, equipping most Asian governments with more policy space, their policy responses to date will only cushion some of the impacts and not fully offset the economic and credit damage. "Widespread containment measures are crippling domestic consumption and production, which is spilling over to other parts of the region in the form of lower demand for commodities, imported goods and services, and supply chain disruptions," Moody's Assistant Vice President Deborah Tan said."The coronavirus is exposing vulnerabilities in existing systems and we expect policy space to be constrained for economies with existing fiscal challenges or elevated external vulnerabilities," she added. JD ANUANU

COVID-19: Moody's says loan moratorium may lead to greater build-up of credit losses for banks

<ul><li>The IHS Markit <keyword id="3082427" type="PERSON" weightage="20" keywordseo="India-manufacturing-PMI">India Manufacturing PMI</keyword> showed a modest improvement in November compared to October when the activity had fallen to a two-year low.</li><li>New manufacturing orders are still way below the levels seen at the start of 2019.</li><li>The current slowdown in manufacturing has a lot to do with the lack of credit as banks have turned risk averse.</li></ul>The country's manufacturing sector activity inched up in November, but the upturn remained subdued as growth rates for new orders as well as production were modest, a monthly survey said on Monday.
The IHS Markit India Manufacturing PMI rose to 51.2 in November from 50.6 in October, when it had fallen to a two-year low, indicating only a slight improvement in the health of the sector.
 Although business conditions in the Indian manufacturing sector improved in November, the rise, however, remained subdued compared to earlier this year and the survey history, the study said.
 This is the 28th consecutive month that the manufacturing PMI has remained above the 50-point mark. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.
 
	
	
	
	
	
	
 
 
 
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 "After pulling back noticeably in October, manufacturing sector growth displayed a welcoming acceleration in November. Still, rates of expansion in factory orders, production and exports remained far away from those recorded at the start of 2019, with subdued underlying demand largely blamed for this," said Pollyanna de Lima, Principal Economist at IHS Markit.
 According to the survey, growth of manufacturing activity in November was supported by the launch of new products and better demand, though restrained by competitive pressures and unstable market conditions.
 "Some level of uncertainty regarding the economy was evident by a subdued degree of business optimism. Also, companies shed jobs for the first time in over a year-and a-half and there was another round of reduction in input buying," Lima said.
 
 
 
 
 
 
 
 
 
 
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 Lima further noted that the weakness of these forward-looking indicators suggest that firms are bracing themselves for challenging times ahead.
 On the inflation front, there were only marginal increases in both input costs and output charges in November.
 "PMI data continued to show a lack of inflationary pressures in the sector which, combined with slow economic growth, suggests that the RBI will likely extend its accommodative policy stance and further reduce the benchmark interest rate during December," Lima said.
 
 
 
 
 
 
 
 
 
 
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 What can the RBI do? The Reserve Bank may cut interest rates for the sixth straight time on December 5 to support growth that has continued to slip to more than six-year low on slump in manufacturing, bankers and experts said.
 The RBI has cut interest rates on every single occasion the monetary policy committee (MPC) has met since Shaktikanta Das took over as the Governor in last December.
 In five reductions so far in 2019, interest rates have been lowered by a total of 135 basis points over concerns that growth momentum is slowing down and also to try to boost liquidity in the financial system.
 GDP growth slowed sharply to a pace of 4.5 per cent in the July-September, hit by a slump in manufacturing output. The pace of GDP growth has moderated from the 5 per cent rate in April-June and 7 per cent in July-September quarter of 2018. SEE ALSO: <a href="https://www.businessinsider.in/policy/economy/news/india-latest-gdp-growth-data-and-manufacturing-and-gva-data/articleshow/72294625.cms" data-type="tilCustomLink" target="_blank">India’s GDP growth is as bad as the worst estimates ⁠— as the economy slows down for the fifth quarter in a row</a>

The latest manufacturing survey shows a slight improvement in November from an appalling 2-year low a month ago

<ul><li>The US is reportedly against the Reserve Bank of India’s plan to set up a public credit database, explaining that the government-backed registry will make it harder for private credit bureaus to operate </li><li>There are four private credit information companies in India that do the same work as the public credit database, of which two - <keyword id="4053635" type="PERSON" weightage="20" keywordseo="Transunion-Cibil">TransUnion CIBIL</keyword> and Equifax Credit Information Services - are owned by US companies. </li><li>The <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword> has been mulling the establishment of a <keyword id="4735636" type="PERSON" weightage="20" keywordseo="Public-Credit-Registry">public credit registry</keyword> since 2017, finally shortlisting a number of tech majors such as Wipro, TCS, Capgemini and IBM to set up the registry in December 2018. </li></ul> The US is <a href="https://www.livemint.com/news/india/us-raises-concerns-over-rbi-s-move-to-create-credit-registry-1557338438758.html">reportedly</a> against the Reserve Bank of India’s plan to set up a public credit database, explaining that the government-backed registry will make it harder for private credit bureaus to operate. The public credit database will accumulate information on all borrowers along with outstanding loans amounts and material events linked to each loan - and will hence, be used to prevent loan slippages. A loan officer will be able to differentiate between reliable and unreliable borrowers and set interest rates accordingly. The US concerns could stem from the fact that the move will be a threat to US-owned businesses. There are four private credit bureaus in India that do the same work as the public credit database, of which two - TransUnion CIBIL and Equifax Credit Information Services - have US parents. A source told <a href="https://www.livemint.com/news/india/us-raises-concerns-over-rbi-s-move-to-create-credit-registry-1557338438758.html">Mint</a> that the US felt that the establishment of a public credit registry would hinder the operations of private credit bureaus and limit their access to loan information. Instead, it lobbied for a registry that would mainly be used by regulators - something that defeats the purpose of a public credit database. Indian officials reportedly responded by saying that the public <keyword id="680685" type="ORGANIZATION" weightage="20" keywordseo="Credit-Bureau">credit bureau</keyword> would not limit the access of private bureaus to loan information and that the US concerns were misplaced. The US administration likely raised the issue this week <a href="https://www.moneycontrol.com/news/india/us-may-take-final-decision-on-gsp-issue-after-formation-of-new-govt-in-india-3945441.html">during a set of meetings </a>between US Commerce Secretary Wilbur Ross and India’s Commerce Minister <keyword id="6356597" type="PERSON" weightage="20" keywordseo="suresh-prabhu">Suresh Prabhu</keyword> in Delhi. In addition to the public credit registry, the two were slated to discuss a number of issues ranging from trade benefits to India’s e-commerce policy. The RBI has been mulling the establishment of a public credit registry since 2017, finally <a href="https://www.thehindubusinessline.com/money-and-banking/rbi-shortlists-tcs-wipro-ibm-to-set-up-public-credit-registry/article25813810.ece">shortlisting a number of tech majors s</a>uch as Wipro, TCS, Capgemini and IBM to set up the registry in December 2018. SEE ALSO: <a href="https://www.businessinsider.in/india-will-soon-have-an-ombudsman-to-address-consumer-complaints-about-digital-payments/articleshow/66968380.cms">India will soon have an ‘ombudsman’ to address consumer complaints about digital payments</a>

The US thinks that the RBI’s public credit bureau will squeeze out India’s private players

New Delhi, The <keyword id="113282" type="COMPANY" weightage="20" keywordseo="Retailers-Association-of-India">Retailers Association of India</keyword> (RAI) has recommended the government to announce the National Retail policy and allow <keyword id="44446" type="PERSON" weightage="20" keywordseo="retailers">retailers</keyword> to register as MSME in the upcoming <keyword id="6360189" type="COMPANY" weightage="20" keywordseo="union-budget">Union Budget</keyword>. In a statement, RAI noted that the the Indian retail sector was one of the worst impacted due to the pandemic and all efforts are required to boost the local economy and help revive the retail, saving millions of jobs. RAI in its recommendation said that there is a need to expedite the formulation and implementation of the National Policy for Retail Trade. "We believe that such a step would provide a substantial boost to the retail sector and facilitate ease of doing business. We recommend government to announce the policy in <keyword id="8420431" type="UNKNOWN" weightage="20" keywordseo="budget-2021">Budget 2021</keyword>," RAI said. RAI noted that retail trade is not classified under MSME and it does not come under the priority sector. "Therefore, if a person is merely running a departmental store or a retail shop and retailing in products, not manufactured by him, he cannot obtain MSME registration," it said, urging the government to allow retailers to register as MSMEs. It also made several suggestions on taxation. RAI said that GST laws do not allow for a refund where the tax rates on inputs services are higher than that on output and this leads to accumulation of <keyword id="6354680" type="UNKNOWN" weightage="20" keywordseo="credit">credit</keyword> with the company, blocking working <keyword id="36749" type="ORGANIZATION" weightage="20" keywordseo="capital">capital</keyword>. It has recommended allowing a refund of accumulated input tax credit accrued on account of input services, capital goods. Further, as per the current scenario, GST credit is leading to blocked working capital. It said that companies should be allowed to use GST deposit or credit for payment of basic import duty. Speaking on the expectations from the Union Budget 2021-22, Kumar Rajagopalan, CEO, Retailers Association of India said: "The retail industry was almost squashed during the pandemic. It is slowly getting back on its knees with the opening up of the economy." "To get this crawling industry back to its feet and start running, we believe that the budget should address two main things that will bring in Ease of Doing Business for retailers -- freedom from various procedural strangleholds and access to funds necessary for growth," he said. SEE ALSO: <a href="https://www.businessinsider.in/defense/news/these-amazing-facts-about-the-indian-army-will-make-you-beam-with-pride/slidelist/80270052.cms">Army Day 2021: These amazing facts about the Indian Army will make you beam with pride</a> <a href="https://www.businessinsider.in/business/corporates/news/hcl-tech-clocks-in-nearly-27-jump-in-profit-crosses-the-10-billion-revenue-in-third-quarter-of-year-2020-21/articleshow/80278852.cms">HCL Tech clocks in nearly 27% jump in profit, crosses the $10 billion revenue milestone with one more quarter left</a> <a href="https://www.businessinsider.in/india/news/india-will-begin-its-covid-19-vaccination-drive-tomorrow-heres-everything-you-need-to-know/articleshow/80281740.cms">India will begin its COVID-19 vaccination drive tomorrow — here’s a look at how the world’s largest vaccine rollout is set to take place</a>

Budget 2021: India's retail association seeks a national policy for the battered sector

Mumbai, Apr 6 () Banks in the country are likely to witness a spike in their non-performing assets ratio by 1.9 per cent and credit cost ratios by 130 basis point in 2020, following the economic slowdown on account of COVID-19 crisis, says a report. In its report titled "For Asia-Pacific Banks, COVID-19 Crisis Could Add USD 300 Billion To Credit Costs" S&amp;P Global Ratings said, it expects the non-performing assets (NPA) ratio for the Chinese banking sector to increase by about 2 per cent in 2020, and credit losses, to increase by about 100 basis points. On India, the report said "the NPA ratio in India is likely to fare similarly to China's (1.9 per cent 2 per cent) but the credit costs ratios could be worse, increasing by about 130 basis points," the rating agency's credit analyst Gavin Gunning said in the report. Gunning said there are concerns that the coronavirus will spread faster, further, and for longer. "This will deepen the economic pain we already anticipate for 2020. Financing conditions may likewise sour as investors become more risk averse. This would hit bank credit," he said. The report noted that an additional USD 300 billion spike in lenders' credit costs and a USD 600 billion increase in (NPAs) will occur in 2020 due to the adverse impact of coronavirus pandemic. While banks are not as exposed as the corporate sector during the initial stage of the pandemic, the strain on lenders could ultimately be profound. Banks face a second-order hit compared with the corporate and household sectors. The report said the economic storm created by COVID-19 will test the ratings resilience of the region's 20 banking sectors. "The resilience of banks' asset quality in 2020 hinges in part on the success of governments' and regulators' policy responses. These measures are in early stages. Some have started, some are in planning, and we suspect many more may be in the wings," Gunning said. Asia-Pacific governments, central banks, and supervisory authorities have rolled out diverse measures to address COVID-19. These include liquidity injections, targeted loans to affected industries and regions, and policy rate cuts. It also includes support for banks to provide forbearance to otherwise economically viable households and businesses sideswiped by COVID-19. The RBI in its seventh bi-monthly monetary policy announced on March 27, reduced the repo rate by 75 basis points to 4.40 per cent. It announced to provide Rs 3.74 lakh crore liquidity to banks through reduction in cash reserve ratio, by conducting targeted long term repos operations (TLTRO) and by increasing the limit for marginal standing facility (MSF) to 3 per cent. RBI also allowed a repayment moratorium for three months on all term loans outstanding as on March 1, 2020, to borrowers of all commercial banks, including regional rural banks, small finance banks and local area banks, co-operative banks, and NBFCs, including housing finance companies and micro-finance institutions. "The equation underpinning policy responses is simple in theory but difficult in practice, and always comes at a significant fiscal cost," Gunning noted. HV DRRDRR

COVID-19 impact: Banks to witness spike in credit costs, non-performing assets in 2020

Mumbai, Jan 3 () India has extended a line of credit of USD 75 million (over Rs 500 crore) to Cuba for financing solar parks.An agreement signed between Export-Import Bank of India (Exim Bank) and Banco Exterior De Cuba in July last year came into effect from December 12, the RBI said in a statement on Thursday.
 Banco Exterior De Cuba is a nominated agency of the Government of Cuba. 
"Exim Bank has entered into an agreement dated July 16, 2019 with Banco Exterior De Cuba, for making available to the latter, Government of India supported Line of Credit (LoC) of USD 75 million for the purpose of financing installation of 75 MW Photovoltaic Solar Parks in the Republic of Cuba," it said.
Under the LoC, The terminal utilisation period is 60 months after the scheduled completion date of the project.
As per the agreement, financing of export of eligible goods and services from India would be allowed subject to their being eligible for export under the Foreign Trade Policy.
Out of the total credit by Exim Bank under the agreement, goods, works and services of the value of at least 75 per cent of the contract price can be supplied by the seller from India, and the remaining 25 per cent of goods and services may be procured by the seller from outside India, the statement added. KPM KPM ANU
ANU

India extends USD 75 mn line of credit for solar parks in Cuba

<keyword id="6354477" type="PERSON" weightage="60" keywordseo="Narendra-Modi">Narendra Modi</keyword> announced a path-breaking startup policy to the cheers of a thundering crowd today. These key policies look to make lives easier for startup founders across the country. The Prime Minister said he looks to tap into the entrepreneurship spirit of the nation and create leaders who design unique solutions to the country's problems. 
 
Business Insider India offers you a quick glance at what this policy would feature: 
 
Image credit: Indiatimes

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RBI moves to make online bank transfer cheaper, to review ATM charges

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COVID-19: Moody's says loan moratorium may lead to greater build-up of credit losses for banks

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The latest manufacturing survey shows a slight improvement in November from an appalling 2-year low a month ago

PTI

The US thinks that the RBI’s public credit bureau will squeeze out India’s private players

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Budget 2021: India's retail association seeks a national policy for the battered sector

IANS

COVID-19 impact: Banks to witness spike in credit costs, non-performing assets in 2020

PTI

India extends USD 75 mn line of credit for solar parks in Cuba

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Narendra Modi announces Mega #StartupIndia Policy!

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