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<ul><li><keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword> has said that 25% of the amount of I-CRR maintained by banks will be released on Saturday and another 25% on September 23. </li><li>Releasing money in tranches helps to smoothen out liquidity and avoid sudden gush of funds, says Madan Fadnavis of Bank of Baroda.</li><li></li></ul> The Reserve Bank on Friday decided to discontinue the <keyword id="18349664" type="General" weightage="50" keywordseo="incremental-cash-reserve-ratio" source="Orion">Incremental Cash Reserve Ratio</keyword> (I-CRR), which was put in place to absorb surplus liquidity following the withdrawal of Rs 2,000 currency notes, in a phased manner beginning Saturday. On August 10, the RBI mandated banks to maintain an incremental cash reserve ratio (I-CRR) of 10% on the increase in their net demand and time liabilities (<keyword id="312584" type="General" weightage="20" keywordseo="NDTL" source="Orion">NDTL</keyword>) between May 19, 2023 and July 28, 2023. The measure was intended to absorb the surplus liquidity generated by various factors, including the return of Rs 2,000 notes to the banking system. "On a review, it has been decided to discontinue the I-CRR in a phased manner," the central bank said in a statement. There is surplus liquidity in system of around Rs 75,000 cr of late, according to Madan Sabnavis, chief economist at Bank of Baroda. He adds, "Releasing money in tranches helps to smoothen out liquidity and avoid sudden gush of funds." Based on an assessment of current and evolving liquidity conditions, it has been decided that the amounts impounded under the I-CRR would be released in stages so that system liquidity is not subjected to sudden shocks and money markets function in an orderly manner, it added. The RBI said 25% of the amount of I-CRR maintained by banks will be released on Saturday and another 25% on September 23. The rest will be released on October 7. While announcing the I-CRR, RBI Governor <keyword id="6359111" type="General" weightage="50" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword> had indicated that the provision was a temporary measure for managing the liquidity overhang. The RBI had announced that the I-CRR would be reviewed on September 8, 2023, or earlier with a view to returning the impounded funds to the banking system ahead of the festival season. Following the withdrawal of the Rs 2,000 notes, the liquidity with the banks had surged significantly, the I-CRR was aimed to absorb the excess cash. As much as 93% of Rs 2000 currency notes that were in circulation on May 19 -- the day when the currency was withdrawn from circulation -- have been returned to banks. The advance tax payments are due next week which will put pressure on liquidity further. The total value of Rs 2000 banknotes received back from circulation is Rs 3.32 lakh crore up to August 31, 2023. Fadnavis adds, "The question is whether this will be adequate next week when there are tax outflow. This is because the amount coming in of around Rs 25-27,000 cr will cover the outflow through the V3R today and will not leave much surplus." (With text inputs from PTI)

RBI decides to withdraw incremental CRR in phased manner and release it by Oct 7

<ul><li>In a massive jolt to India's Olympic preparations, the <keyword id="78924" type="COMPANY" weightage="20" keywordseo="World-Anti-Doping-Agency">World Anti-Doping Agency</keyword> (WADA) has extended the suspension of the country's <keyword id="413752" type="COMPANY" weightage="20" keywordseo="National-Dope-Testing-Laboratory">National Dope Testing Laboratory</keyword> (NDTL) by another six months citing non-conformation to international standards. </li><li>The WADA first suspended NDTL in August last year for a period of six months. </li><li>A fresh round of inspection by the world body, much to the embarrassment of country's sporting establishment, showed that non-conformities still existed. </li></ul> In a massive jolt to India's Olympic preparations, the World Anti-Doping Agency (WADA) has extended the suspension of the country's National Dope Testing Laboratory (NDTL) by another six months citing non-conformation to international standards. The WADA first suspended NDTL in August last year for a period of six months. A fresh round of inspection by the world body, much to the embarrassment of country's sporting establishment, showed that non-conformities still existed. "The World Anti-Doping Agency has suspended the accreditation of <keyword id="9619467" type="COMPANY" weightage="20" keywordseo="the-national-dope-testing-laboratory">the National Dope Testing Laboratory</keyword> in New Delhi, India, for a second period of up to six months," WADA said in a statement. The suspension prohibits the NDTL from carrying out any anti-doping activities, including all analyses of urine and blood samples. The laboratory's non-conformities pertain to the International Standard for Laboratories (ISL) identified during a WADA site visit, including the laboratory's isotope ratio mass spectrometry -- the analytical technique of choice for confirmation of prohibited substances. Currently, urine samples collected by National Anti-Doping Agency (NADA) are being sent primarily to the WADA-accredited lab in Doha. The WADA conducted a second inspection of NDTL in February. But corrective measures weren't found to be good enough to revoke the suspension, which is now extended till January, 2021. "In February 2020, when the six-month suspension period elapsed and some outstanding non-conformities had not been addressed successfully, WADA's Laboratory Expert Group (LabEG) recommended the initiation of further disciplinary proceedings against the laboratory based on the outstanding non-conformities," the world body said. The disciplinary committee that was mandated to make a recommendation to the WADA chair then gave its status report asking for an extension in suspension. "These disciplinary proceedings were carried out by an independent Disciplinary Committee...The disciplinary process is now complete and the second six-month suspension began on 17 July 2020." As per Article 13.7 of the WADA Code, the NDTL can appeal against this decision in <keyword id="3657344" type="COMPANY" weightage="20" keywordseo="the-court-of-arbitration-for-sport">the Court of Arbitration for Sport</keyword> (CAS) within 21 days of receipt of notice. The release also stated: "During the period of suspension, if the laboratory satisfies the LabEG in meeting the requirements, it may apply for reinstatement prior to the expiry of the six-month suspension period." However, the manner in which the suspension had been handled, there is a provision for another six-month suspension which could mean that NDTL won't be able to do any testing before Tokyo Olympics in July, 2021. "Should the laboratory not address the non-conformities by the end of the six-month suspension period, WADA may extend the suspension of the laboratory's accreditation for up to an additional six months." NADA DG Navin Agarwal, in a recent interview to , had said that the body has "stopped collecting blood samples during COVID-19 forced lockdown as transportation becomes difficult." NDTL's suspension has already forced NADA to send samples to foreign laboratories, which involves a higher cost. "It is a huge setback for the sports ministry and NDTL. Somebody must take responsibility for this. For last 11 months, NADA is operating without an accredited lab and now this has been extended to another six months," lawyer Parth Goswami, who handles doping related cases, told . "Sending of samples for analysis to Qatar lab involves cost and also delays the result management process. <keyword id="9619468" type="COMPANY" weightage="20" keywordseo="ndtl/sports-ministry">NDTL/sports ministry</keyword> did not challenge the suspension of WADA before CAS last August. It will be interesting to see if NDTL protests this time," he said. SEE ALSO: <a href="https://www.businessinsider.in/science/health/news/coovid-vaccine-from-oxford-serum-institute-and-astrazeneca-shows-promising-immune-response/articleshow/77069321.cms">The COVID-19 vaccine from Oxford and Astrazeneca shows 'promising' results in early human trials</a> <a href="https://www.businessinsider.in/careers/news/from-intel-and-wipro-to-tcs-and-google-here-are-the-top-job-openings-in-the-multinational-companies/articleshow/77058769.cms">From Intel and Wipro to TCS and Google— Here are the top job openings in the multinational companies</a> <a href="https://www.businessinsider.in/tech/mobile/news/checkout-upcoming-affordable-smartphone-oneplus-nord-launch-price-specifications-features/articleshow/77061620.cms">OnePlus Nord launch price, specs and more – Everything we know about the upcoming affordable OnePlus smartphone</a>

World Anti-Doping Agency extends National Dope Testing Laboratory suspension by 6 months

<keyword id="20305504" type="General" weightage="20" keywordseo="Khelo-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Khelo India" meta.hostid="261" meta.entityid="Khelo India">Khelo India</keyword>, which is the government's flagship project to promote sports at the grassroots level, was once again the biggest beneficiary in the union <keyword id="19936553" type="General" weightage="100" keywordseo="budget" source="keywords">budget</keyword> for the <keyword id="19896478" type="General" weightage="20" keywordseo="sports-ministry" source="keywords">sports ministry</keyword> as it was assigned Rs 900 crore from the overall allocation of Rs 3,442.32 crore on Tuesday. Kehlo <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s share, announced in the budget presented by finance minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> here, is Rs 20 crore more than the revised allocation of Rs 880 crore during the previous financial year. With the <keyword id="19986816" type="General" weightage="20" keywordseo="Olympic" source="keywords">Olympic</keyword> cycle set to come to an end in Paris in August this year, and the <keyword id="19895708" type="General" weightage="20" keywordseo="Commonwealth-Games" source="keywords">Commonwealth Games</keyword> and <keyword id="20007738" type="General" weightage="20" keywordseo="Asian-Games" source="keywords">Asian Games</keyword> still two years away, the budget for the Sports Ministry has seen only a marginal increase of Rs 45.36 crore from the previous cycle. The budget for the previous cycle was Rs 3,396.96 crore for the previous financial year. The government has invested heavily in Khelo India over the years as the programme continues to unearth talent from all parts of the country. While Khelo India's actual allocation in 2022-23 stood at Rs 596.39 crore, it was increased by more than Rs 400 crore, to Rs 1,000 crores, in the 2023-24 budget, before being revised to Rs 880 crore. The government has continued to add programmes ever since the inaugural Khelo India Youth Games (KIYG) were held in 2018. The ministry added Khelo India University Games in 2020, before also launching the Khelo India Winter Games the same year and the Khelo India Para Games in 2023. Hundreds of Khelo India State Centres of Excellence (KISCE) have been set up across the country, which aim to provide facilities for athletes with potential. Several Khelo India athletes are currently in India's Olympic-bound contingent. The government's assistance to <keyword id="20418970" type="General" weightage="20" keywordseo="National-Sports-Federations" source="keywords" meta.keywordsubtype="org" meta.entityname="National Sports Federations" meta.hostid="261" meta.entityid="National Sports Federations">National Sports Federations</keyword> (NSFs) has also seen an increase of Rs 15 crore -- from Rs 325 crore in 2023-24 to Rs 340 crore in the latest budget. The budget for Sports Authority of India, which apart from maintaining its stadia across the country also manages the Target Olympic Podium Scheme (TOPS) to prepare athletes for the global sporting extravaganzas, has also been enhanced from Rs 795.77 crore to Rs 822.60 crore, which is a jump of Rs 26.83 crore. The <keyword id="20524251" type="General" weightage="20" keywordseo="National-Anti-Doping-Agency" source="keywords" meta.keywordsubtype="org" meta.entityname="National Anti-Doping Agency" meta.hostid="261" meta.entityid="National Anti-Doping Agency">National Anti-Doping Agency</keyword> (NADA) and the National Dope Testing Laboratory (NDTL), which does all the testing, have received marginal increase in their budgets. While NADA's budget has gone up from Rs 21.73 crore last year to Rs 22.30 crore, NDTL has got Rs 22 crore, up from Rs 19.50 last year.

Khelo India once again gets lion's share in Union Budget for sports

The <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (<keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword>) on Wednesday announced a series of measures to boost foreign exchange inflows. The central bank said that it has taken the steps in order to further diversify and expand the sources of <keyword id="6358355" type="General" weightage="20" keywordseo="forex" source="Orion">forex</keyword> funding so as to mitigate volatility and dampen global spillovers. India's foreign exchange reserves stood at $593.3 billion as on June 24, 2022, supplemented by a substantial stock of net forward assets, it said. The RBI has exempted incremental Foreign Currency Non-Resident Bank (FCNR-B) and Non-Resident (External) Rupee (NRE) deposit <keyword id="127684" type="General" weightage="20" keywordseo="Liabilities" source="Orion">liabilities</keyword> for computation of Net Demand and Time Liabilities (NDTL) for maintenance of cash reserve ratio (<keyword id="35038" type="General" weightage="20" keywordseo="crr" source="Orion">CRR</keyword>) and statutory liquidity ratio (<keyword id="46197" type="General" weightage="20" keywordseo="SLR" source="Orion">SLR</keyword>) by the banks. This will be effective from the reporting fortnight beginning July 30, 2022 with reference base date of July 1. "This relaxation will be available for deposits mobilised up to November 4, 2022. Transfers from Non-Resident (Ordinary) (NRO) accounts to NRE accounts shall not qualify for the relaxation," the RBI said. It also decided to temporarily permit banks to raise fresh FCNR(B) and NRE deposits without reference to the extant regulations on interest rates, with effect from July 7, 2022. This relaxation will be available for the period up to October 31, 2022. The RBI also relaxed rules relating to foreign portfolio investment in debt by allowing all new issuances of government securities (G-Secs) of 7-year and 14-year tenors, including the current issuances of 7.10 per cent GS 2029 and 7.54 per cent GS 2036, under the Fully Accessible Route (FAR). It also decided that <keyword id="6362476" type="General" weightage="20" keywordseo="investments" source="Orion">investments</keyword> by FPIs in government securities and corporate debt made till October 31, 2022 will be exempted from the macroprudential short term limit - not more than 30 per cent of investments each in government securities and corporate bonds can have a residual maturity of less than one year. These investments will not be reckoned for the short term limit till maturity or sale of such investments. As part of the macroprudential framework under the medium term framework (MTF), foreign portfolio investors (FPI) can invest only in corporate debt instruments with a residual maturity of at least one year. The central bank has decided that FPIs will be provided with a limited window till October 31, 2022 during which they can invest in corporate money market instruments viz., commercial paper and non-convertible debentures with an original maturity of up to one year. The FPIs can continue to stay invested in these instruments till their maturity/sale. These investments will not be included for reckoning the short term limit for investments in corporate securities. According to the RBI, Authorised Dealer Category-1 (AD Cat-I) banks can utilise overseas foreign currency borrowings (OFCB) for lending in foreign currency to entities for a wider set of end-use purposes, subject to the negative list set out for external commercial borrowings (ECBs). The measure is expected to facilitate foreign currency borrowing by a larger set of borrowers who may find it difficult to directly access overseas markets. This dispensation for raising such borrowings is available till October 31, 2022. As regards the external commercial borrowings (ECB) the RBI has temporarily increased the limit under the automatic route from $750 million or its equivalent per financial year to $1.5 billion. The all-in cost ceiling under the ECB framework is also being raised by 100 basis points, subject to the borrower being of investment grade rating. The above dispensations are available up to December 31, 2022. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/environment/news/monsoon-rain-wreaks-havoc-in-himachal-and-karnataka-orange-alert-in-gujarat/articleshow/92704563.cms">Monsoon rain wreaks havoc in Himachal and Karnataka, orange alert in Gujarat</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/macbook-air-with-m2-chip-will-go-on-sale-from-july-15/articleshow/92704253.cms">Apple’s MacBook Air with M2 chip will go on sale from July 15, pre-orders starting July 8</a>

RBI tries to boost forex reserves by easing NRI deposit norms

The <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword>'s (<keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword>) move to relax regulations to boost foreign exchange inflows will not have any material change in receipts, but certainly helpful in directional forex signalling to speculators, said <keyword id="141615" type="General" weightage="80" keywordseo="emkay-global" source="Orion">Emkay Global</keyword> Financial Services Ltd. Reacting to RBI's moves on Wednesday, Emkay Global in a report said: "While these measures to boost capital account are helpful, they may not have a material impact on flows. Nonetheless, they will still ease the pressure of the RBI to intervene to some extent." According to Emkay Global, with low forward premia, this mobilisation may still make some sense for banking entities. The timing of RBI's move coincides with the typically strong remittance/deposit season that comes with the beginning of the festive season. This can take the pressure off banks to raise domestic deposits amidst accelerating credit growth, and also somewhat cool-off domestic borrowing rates, Emkay Global said. The easing of all the available channels of foreign portfolio investors (<keyword id="725142" type="General" weightage="50" keywordseo="fpi" source="Orion">FPI</keyword>) investments in debt may not lead to material change in FPI flows given the free limits that are already available. However, the new tenors added in Fully Accessible Route (FAR) securities are fairly active. "Thirdly, the all-in cost ceiling under the <keyword id="60971" type="General" weightage="50" keywordseo="ecb" source="Orion">ECB</keyword> (external commercial borrowings) framework is also being raised by 100 bps, subject to the borrower being of investment grade rating, however we seek more clarity on this front as to whether it leads to any change in caps (from existing 450bps), and if it makes sense for domestic good investment-grade borrowers to borrow in foreign currency, except when they are facing a credit crunch back home," the report said. While it is debatable if these steps can lead to significant flows, they could be effective in preventing speculative attacks on the currency and giving directional policy signals to the markets, Emkay Global added. The key measures announced by RBI on Wednesday were: 1. Cash Reserve Ratio + Statutory Liquidity Ratio (CRR+ SLR) exemptions: Incremental FCNR Bank and Non-Resident External (NRE) deposit liabilities now exempt from <keyword id="626944" type="General" weightage="50" keywordseo="net-demand-and-time-liabilities" source="Orion">Net Demand and Time Liabilities</keyword> (NDTL) computation for maintenance of CRR and SLR. Transfers from Non-Resident Ordinary (NRO) accounts will not qualify for this relaxation. This relaxation is available till November 4, 2022. 2. Interest rates on FCNR and NRE deposits: Banks are temporarily allowed to raise fresh FCNR(B) and NRE deposits without having to adhere to the regulations on interest rates on these deposits. 3. FPI debt investment: Easing all the available channels of FPI investments: (i) All new issuances of 7-year and 14-year G-secs (including fairly active current issuances of 7.10 per cent GS 2029 and 7.54 per cent GS 2036 <keyword id="1351125" type="General" weightage="50" keywordseo="ato" source="Orion">Ato</keyword> be now covered under Fully Accessible Route (FAR). At present, 5-year, 10-year and 30-year tenors are covered. (ii) FPI investments in G-secs and corporate debt will not be subject to the short-term limit, i.e., not more than 30 per cent of investments in G-secs and corporate debt can have a residual maturity less than one year. (iii) FPIs can invest in commercial papers and non-convertible debentures with an original maturity of up to one year as against earlier mandate of at least one year. These investments will not be included as part of the short term limit on investments in corporate securities. 4. Foreign currency lending by banks: Banks can utilise overseas foreign currency borrowings (OFCBs) for lending for a wider set of purposes, not just export finance. The measure is expected to facilitate foreign currency borrowing by a larger set of borrowers who may find it difficult to directly access overseas markets. 5. ECB limits: The limit for ECBs under the automatic route has been raised from $750 million to $1.5 billion per financial year. The all-in cost ceiling has also been raised by 100bps. The measures 2-5 above are valid till 31st October 2022, Emkay Global said. 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RBI's moves to boost forex inflows could have an impact on domestic borrowing rates

Mumbai, Feb 10 () The Reserve Bank on Monday said the special lending window with CRR exemption will be open from February 14 and incremental loans disbursed under this facility will have CRR exemption for the next five years. This means that banks will not be needed to make additional cash reserve ratio against any incremental loans disbursed to the targeted segments. The window opens on February 14 for six months ending July 31, 2020, but the net demand and time liabilities (NDTL) will be calculated as of January 31, 2020, the central bank circular said this evening. As an additional liquidity measure and also to nudge banks to lend more to the needy segments, the Reserve Bank at the last monetary policy announcement said banks, flushed with liquidity, could lend to these segments without making additional provisions without the requirement of parking additional cash reserve ratios (CRR), which is the money parked with the RBI without interest. The productive sectors identified by the regulator are auto and residential housing loans, and also loans to micro, small and medium enterprises (MSMEs). At the sixth bimonthly monetary policy on February 6, the RBI had said, "Banks can deduct the equivalent amount of incremental credit disbursed by them as retail loans to automobiles, residential housing, and loans to MSMEs (which have GST registration), over and above the outstanding level of credit to these segments as at the end of the fortnight ended January 31, 2020, from their net demand and time liabilities (NDTL) for maintenance of the CRR." Detailing the time-line and operational details in a detailed circular, the RBI on Monday said, "Banks can claim the first such deduction from the NDTL of February 14, 2020 for the amount equivalent to the incremental credit extended to the above identified sectors over the outstanding level of credit as at the end of the fortnight to January 31, 2020. "An amount equivalent to the incremental credit outstanding from the fortnight beginning January 31, 2020 and up to the fortnight ending July 31, 2020 will be eligible for deduction from NDTL for the purpose of computing the CRR for a period of five years from the date of origination of the loan or the tenure of the loan, whichever is earlier," the RBI said. The central bank feels revitalising credit flow to productive sectors like these can have multiplier effects to spur support growth. The circular asks banks to report the CRR exemption availed at the end of a fortnight under "exemptions/others" in the Section 42 return, under the provisions of the master circular on CRR and SLR issued on July 1, 2015. Proper fortnightly records of net incremental credit extended to these select sectors/NDTL exemption claimed, duly certified by the chief financial officer or an equivalent officer, must be maintained by banks for supervisory review, the circular said. The RBI expects this special window to enable improved credit flow to needy sectors, reinforces monetary transmission, strengthens regulation and supervision, broadens and deepens financial markets; and also improves payment and settlement systems. The RBI on June 6, 2019, set up an internal working group to review the liquidity management framework to simplify it and suggest steps to communicate the objectives and the toolkit for the same and the report was made public on September 26, 2019. Following this, RBI fine-tuned the existing liquidity management framework and the revised framework fixed the marginal standing facility rate as its upper ceiling and the fixed rate reverse repo rate as the floor rate, with the policy repo rate in the middle of the corridor. The special lending window however retains the width of the corridor is retained at 50 bps-the reverse repo rate being 25 bps below the repo and the MSF rate being 25 bps above the repo rate. This also had the RBI withdrawing the daily fixed rate repo and four 14-day term repos and included fixed and variable rate repo/reverse repo auctions, outright open market operations, forex swaps and other instruments as new instruments for liquidity management. A 14-day term repo/reverse repo operation at a variable rate and conducted to coincide with the CRR maintenance cycle would be the main liquidity management tool for managing frictional liquidity requirements. The main liquidity operation would be supported by fine-tuning operations, overnight and/or longer, to tide over any unanticipated liquidity changes during the reserve maintenance period, the RBI said, adding if needed, the RBI will conduct longer-term variable rate repo/reverse repo operations of over 14 days, and accordingly last week, it introduced long term repos with one and three years of tenor. BEN MRMR

Lending from CRR buffer to get 5-yr exemption: RBI

Mumbai, Feb 27 () Following some banks seeking clarity on the computation of CRR to be exempted for incremental lending to three specified retail loans, the Reserve Bank has said that the deduction is available only on the equivalent incremental credit to these segments. In its bid to boost retail credit flow, the RBI on February 6 announced that incremental loans towards automobile purchases, residential housing and loans to MSMEs will be set against the mandatory cash reserve ratio (CRR), which is parked with the RBI on a permanent basis and on which banks earn no interest. This means that for any fresh loan to these three segments, the banks need not set aside the mandatory 4 per cent of deposits as CRR. Subsequently on February 10, the RBI had clarified that the CRR exemption will be for five years from the date of the origination of the loan or the tenure of the loan, whichever is earlier, and that the incremental credit to these segment can be deduction from their NDTL for six months beginning with the fortnight beginning January 31, 2020 and ending the fortnight to July 31, 2020. "It is clarified that the CRR exemption is available only on equivalent incremental credit to the three identified segments and its computation is based on the difference between the outstanding credit to these segments as of January 31, 2020 and the subsequent fortnights up to July 31, 2020," the RBI said in a clarification. On computing the equivalent amount of incremental credit that can be deducted/exempted from CRR, the regulator said it can be done on every reporting Friday beginning February 14, 2020 and up to the reporting Friday ending July 31, 2020 and thus be deducted from the outstanding credit to the respective segments as on January 31, 2020. "If the difference between the outstanding credit is positive, the equivalent amount of difference be deducted from NDTL for the purpose of CRR maintenance. If the difference in credit to any of the specified segment is negative, it should be ignored. The incremental credit will be calculated segment-wise," RBI said. The RBI also said the incremental loans to the factoring units of MSMEs discounted under the trade receivables discounting system (TReDs) are also eligible for CRR exemption. On how long such deductions/exemptions are allowed, the RBI said the amount of incremental credit as of July 31, 2020 (over the outstanding credit as of January 31, 2020) will be reduced to the extent of repayments and NPAs and the net amount of incremental credit will be eligible for deduction from NDTL for up to five years--up to the fortnight ending January 24, 2025, or the tenure of the loan, whichever is earlier. BEN MRMR

CRR-exempted loans: RBI says deduction only on incremental lending

Mumbai, Jun 27 () Amid the ongoing economic woes created by the coronavirus pandemic, the Reserve Bank has decided to extend the enhanced borrowing facility provided to the banks to meet their liquidity shortages till September 30. The RBI, as a temporary measure, had increased the borrowing limit of scheduled banks under the marginal standing facility (MSF) scheme from 2 per cent to 3 per cent of their Net Demand and Time Liabilities (NDTL) with effect from March 27, 2020. Under the MSF, banks can borrow overnight funds at their discretion by dipping into the Statutory Liquidity Ratio (SLR). This relaxation, which was granted till June 30, 2020, has now been extended till September 30. "On a review, it has now been decided to extend this enhanced limit till September 30, 2020," the Reserve Bank of India (RBI) said in a circular. Banks may continue to access overnight funds under the MSF against their excess SLR holding, it added. The marginal standing facility rate currently stands at 4.25 per cent. The RBI has also extended the relaxation on the minimum daily maintenance of the Cash Reserve Ratio (CRR) at 80 per cent for a further period of three months till September 25, 2020. On March 27, the minimum daily maintenance of the CRR was reduced from 90 per cent of the prescribed CRR to 80 per cent till June 26, 2020. This was done in view of the continuing of hardships faced by banks in terms of social distancing of staff and consequent strains on reporting requirements. NKD ABM ABM

RBI extends enhanced borrowing limit under MSF till Sep 30

Mumbai, Feb 6 () In a bid to increase lending to MSME as well as to auto and home segment, Reserve Bank on Thursday tweaked maintenance of cash reserve ratio (CRR) norms by providing relaxation in calculation of total deposits. The move will encourage lending towards these targeted sectors having multiplier effect by banks as they will get exemption in CRR over incremental lending. This exemption window is available till July 2020. CRR is the percentage of total deposits that bank mandatorily park with the apex bank. It stands at 4 per cent of a bank's total deposit. Alongside sustained efforts to improve monetary transmission, the Reserve Bank is actively engaged in revitalising the flow of bank credit to productive sectors to support growth, as per the Statement on Developmental and Regulatory Policies released by RBI. "As a part of this, it has now been decided that scheduled commercial banks will be allowed to deduct the equivalent of incremental credit disbursed by them as retail loans for automobiles, residential housing and loans to micro, small and medium enterprises (MSMEs), over and above the outstanding level of credit to these segments as at the end of the fortnight ended January 31, 2020 from their net demand and time liabilities (NDTL) for maintenance of CRR," it said. This exemption will be available for incremental credit extended up to the fortnight ending July 31, 2020, it said. To give boost to the real estate sector, RBI said, it has been decided to permit extension of date of commencement of commercial operations (DCCO) of project loans for commercial real estate, delayed for reasons beyond the control of promoters, by another one year without downgrading the asset classification, in line with treatment accorded to other project loans for non-infrastructure sector. "This would complement the initiatives taken by the Government of India in the real estate sector. The detailed instructions will be issued shortly," it said. Observing that MSME sector plays an important role in the growth of the Indian economy, RBI said the restructuring of the borrower account has been extended by further one year to March 31, 2021. Micro, Small and Medium Enterprises (MSMEs) contributes over 28 per cent of the GDP, more than 40 per cent of exports and employs about 11 crore people. Considering the importance of MSMEs in the Indian economy and for creating an enabling environment for the sector, a one-time restructuring of loans to MSMEs that were in default but 'standard' as on January 1, 2019, was permitted without an asset classification downgrade. The restructuring of the borrower account was to be implemented by March 31, 2020, it said, adding, the scheme has provided relief to a large number of MSMEs. "As the process of formalisation of the MSME sector has a positive impact on financial stability and this process is still underway, it has been decided to extend the benefit of one-time restructuring without an asset classification downgrade to standard accounts of GST registered MSMEs that were in default as on January 1, 2020, it said. The restructuring under the scheme has to be implemented latest by December 31, 2020, it said. "This will benefit the eligible MSME entities which could not be restructured under the provisions of the circular dated January 1, 2019 as also the MSME entities which have become stressed thereafter. It is re-emphasised that this is a one-time regulatory dispensation. Detailed guidelines, in this regard, will be issued shortly," it said. Post transfer of regulation of Housing Finance Companies (HFCs) from National Housing Bank (NHB) to Reserve Bank with effect from August 9, 2019, it was decided that Reserve Bank will carry out a review of the extant regulatory framework applicable to HFCs and issue revised regulations in due course, and till such time HFCs shall continue to comply with the directions and instructions issued by NHB. "It is proposed to place the draft revised regulations on the Bank's website by the end of this month, for public comments," it said. DP DRR

RBI announces incentive for lending to MSME, home, auto sectors

The <a href="http://www.businessinsider.in/searchresult.cms?query=RBI">Reserve Bank of India (RBI)</a> on Tuesday maintained status quo and kept <a href="http://www.businessinsider.in/searchresult.cms?query=repo+rate">repo rate</a> unchanged at 7.25%. <keyword id="64009" type="ORGANIZATION" weightage="100" keywordseo="Cash-reserve-ratio">Cash Reserve Ratio</keyword> (CRR) also remained the same at 4%. 
 Due to high inflation and laggered monsoons in some parts of the country, the <keyword id="43352" type="UNKNOWN" weightage="100" keywordseo="Repo-rate">repo rate</keyword> was same. 
 
<a href="http://www.businessinsider.in/searchresult.cms?query=raghuram+rajan">RBI Governor Raghuram Rajan</a> said that sustained hardening of inflation exuding food and fuel was ‘worrisome’. 
 
RBI says policy stance to be conditioned by fuller transmission of rate cuts by banks, food prices and U.S. Fed normalisation signs 
 “<a href="http://www.businessinsider.in/searchresult.cms?query=monsoon">Monsoon</a> were near normal. We will closely follow the food price inflation as it is often sticky,” said Rajan. 
 
This is the third monetary policy review of this financial year. 
 
RBI decided to continue to provide liquidity under overnight repos at 0.25% of bank wise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to 0.75% of NDTL of the banking system through auctions. 
 
Rajan added that weak exports have a prolonged effect on the GDP. 
 
Although overall business confidence is positive, the level of optimism was a shade lower in April-June than in the preceding quarter. Investment, as measured by new projects, is still weak, primarily because of still-low capacity utilization. In the critically important power sector, where final demand is strong, the recent step-up in generation in response to the commendable easing of bottlenecks in coal supply is being partly negated by structural problems relating to clogging of transmission grids and the dire financial state of electricity distribution companies (DISCOMs). 
 
India Inc had pitched for a rate cut owing to low wholesale inflation and slowdown in industrial growth. 
 
The central bank has lowered its policy rate by three-quarters of a percentage point since embarking on an easing cycle in January. The last cut lowered the repo rate to 7.25% on June 2. 
 
The retail inflation in June increased to an eight-month high of 5.4% and the overall Wholesale Price Index (WPI) based inflation was -2.4% in the same month.

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RBI decides to withdraw incremental CRR in phased manner and release it by Oct 7

BI India Bureau