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<ul><li>The Reserve Bank of India (RBI) Governor <keyword id="6359111" type="UNKNOWN" weightage="20" keywordseo="Shaktikanta-Das">Shaktikanta Das</keyword> was doling out optimism to the market at today’s Monetary Policy Committee (<keyword id="6369693" type="UNKNOWN" weightage="20" keywordseo="MPC">MPC</keyword>) briefing. </li><li>The MPC will be expanding the limit of open market operations (OMOs), providing on-tap TLTRO of ₹1 lakh crore, and introducing State Development Loan (SDL) OMOs.</li><li>While these measures may ease some tensions in the short run, the markets still seek predictability and interest rate cuts. </li><li>Das said that both the apex bank and markets can operate in the same space in competition without necessarily being combative. </li></ul>The Reserve Bank of India (RBI) Governor Shaktikanta Das delivered a <a href="https://www.businessinsider.in/policy/economy/news/rbis-mpc-keeps-the-policy-rates-unchanged-to-maintain-accommodative-stance-for-inflation/articleshow/78566955.cms">chipper note</a> on India’s recovery today. According to him, even though there’s some disconnect between the RBI and the markets, all will be well — soon. However, what the market participants want is for the RBI to acknowledge that the economy is in deep trouble and, therefore, cut interest rates further, boost money supply, and ease credit. <div type="Article" hostid="261" msid="78566955" title="RBI says it has decided to 'look through' the current 'high inflation' as it won’t last long⁠ but leaves interest rates unchanged" mstype="2" mssubtype="0"></div> The deep contraction of economic growth witnessed in the first quarter is behind us, he said, while emphasising that some silver linings are already visible. However, not all that glitters is gold. “We remain circumspect about generalising these early greenshoots, as they have benefitted from base effects and one-off shifts in some sectors,” said ratings agency ICRA. Despite Governor Das’ attempt to ease those tense nerves in the market, the argument seems far from over. “The <keyword id="64190" type="POSITION" weightage="20" keywordseo="RBI-Governor">RBI governor</keyword>'s push for optimism is bordering on the edge of hope,” said Sushil Kedia, the founder of KEDIANOMICS. “What's going to happen over the next one month or three is anybody’s guess.” <div type="image" title="India gdp by quarter" msid="78574635" hostid="261" caption="&amp;lt;p&amp;gt;India&amp;#39;s GDP numbers over the last two years and RBI&amp;#39;s expectations for the second half of the fiscal year&amp;lt;/p&amp;gt;"></div> The question to ask here is not who is right and who is wrong, but what happens if any one of them is wrong. If the markets are wrong and the economy recovers by March 2021, they will be in for a surprise. However, if the RBI is wrong and the economy is worse off than the picture painted by the Governor, the implication may be more dire for everyone in the country. Not just growth, RBI hopes the inflation wave will also ebb on its own “MPC has decided to look through the current inflation as a transient hump,” Governor Das explained, adding that inflation will ease between January and March next year. However, Kedia is less sanguine than the RBI Governor. “The interest rate cycle has been so overstretched and soft for so long, that I do see signals in long term data analysis, that at any point far sooner than one would expect, some global events will start reversal of the interest rate cycle,” he said. <div type="image" title="INflation india (1)" msid="78574672" hostid="261" caption="&amp;lt;p&amp;gt;Inflation in India since the outbreak of the coronavirus pandemic in the country&amp;lt;/p&amp;gt;"></div> “The relative economic growth differential between China and the rest of the world is almost 13-14%,” he added. The point Kedia is making is that if inflation rises in the rest of the world, even India will have to raise interest rates to tackle the prices, and the RBI is not preparing for it. While not the most obvious possibility, only time will tell if Kedia’s fear is proven right. RBI’s efforts have been lauded but in parts While the RBI has opened the liquidity taps time and again, a big concern in the market is that both central and state governments need to borrow more and more to meet the rising expenses due to the pandemic. The RBI said that it would buy long-term bonds — issued by both states and the centre — on tap worth ₹20,000 crore, up to ₹1 lakh crore in the coming days. <div type="image" title="india govt debt" msid="78574919" hostid="261" caption="&amp;lt;p&amp;gt;Indian government owes lenders more than &amp;#8377;101 trillion&amp;lt;/p&amp;gt;"></div> That would provide the money states need, but it will also mop up the funds that would have otherwise been available for private borrowers. In these challenging times, it is believed that lenders would rather give money to a government than risky private parties. And that would mean that the borrowing rates for private companies will remain higher than what it should have been. “It also remains to be seen if the commitment to facilitate state and central government borrowing, as well as the explicit signals aimed at softening yields, are adequate for bond markets to shrug off concerns regarding the fiscal health of the central and state governments,” ICRA pointed out. Back to the demand for another rate cut Essentially, private borrowers are back to seeking interest rate cuts, which the RBI seems reluctant to execute at this point. “These (measures announced today) should be beneficial for banks who are comfortable with the credits of corporates to lend as banks' borrowing rates are fixed. In case the repo rates are cut again, banks can refinance at lower rates also,” said Murthy Nagarajan, the head of fixed income at Tata Mutual Fund. <div type="image" title="Copy of TCS share price 2" msid="78575065" hostid="261" caption="&amp;lt;p&amp;gt;Nifty 50 closes above 11,900 points after RBI&amp;#39;s announcement today&amp;lt;/p&amp;gt;"></div> Instead of directly cutting rates, the RBI has offered up open market operations (OMOs), which — according to Abhishek Goenka, the founder and CEO of India Forex Advisors (IFA) — will help bring borrowing rates down in the commercial paper market. OMOs are conducted by the central bank to give or take currency from a bank or group of banks by buying or selling government bonds on the open market. It’s an instrument banks can use to increase or shrink liquidity in the market. “RBI was doing OMOs on an ad hoc basis,” explained Goenka, essentially saying that while RBI may be taking necessary steps, they haven’t been very predictable. And markets hate surprises. <div type="image" title="Copy of nifty50" msid="78575238" hostid="261" caption="&amp;lt;p&amp;gt;India&amp;#39;s 10-year bond yeilds over the last one month&amp;lt;/p&amp;gt;"></div> Until September 30, it wasn’t clear how cash-strapped state governments would find the money to meet the additional expenses in the wake of the pandemic. The markets are glad that RBI has opened up the emergency borrowing window — called ways and means advances or WMA — <a href="https://www.businessinsider.in/policy/economy/news/india-leaves-borrowing-calendar-unchanged-target-remains-at-12-lakh-crore/articleshow/78407506.cms">until the end of the fiscal year by 60%</a>. WMA essentially means that governments can borrow directly from the RBI to meet their emergency needs. That leaves more money in the market for private borrowers. While the decision came just in time, there was enough fear and chaos in the run-up to it. What the markets want are predictability and interest rate cuts. Meanwhile, the Governor has asked the market to keep the faith. “We look forward to cooperative solutions for the borrowing program for the second half of the year… These views can be competitive without being combative,” he said. SEE ALSO: <a href="https://www.businessinsider.in/policy/economy/news/rbis-mpc-keeps-the-policy-rates-unchanged-to-maintain-accommodative-stance-for-inflation/articleshow/78566955.cms">RBI says it has decided to 'look through' the current 'high inflation' as it won’t last long⁠ but leaves interest rates unchanged</a> <a href="https://www.businessinsider.in/business/corporates/news/tcs-beats-accenture-to-become-the-worlds-most-valuable-it-services-company/articleshow/78566487.cms">TCS beats Accenture to become the world’s most valuable IT services company — but this not the first time it has raced ahead</a> <a href="https://www.businessinsider.in/india/news/union-minister-ram-vilas-paswan-dies-at-74/articleshow/78558640.cms">India's consumer affairs minister Ram Vilas Paswan passes way at 74</a> <a href="https://www.businessinsider.in/science/space/news/mars-will-appear-bigger-redder-and-brighter-on-october-13-and-wont-get-this-close-to-earth-again-until-2035/articleshow/78556539.cms">Mars will appear bigger, redder, and brighter on October 13 — and won’t get this close to Earth again until 2035</a>

RBI Governor wants markets to keep the faith but traders want something more

New Delhi, Apr 17 () The RBI's move to slash reverse repo rate and provide a re-finance window of Rs 50,000 crore will infuse liquidity into the system and nudge banks to lend more, enabling businesses to overcome the financial stress caused by the coronavirus pandemic, India Inc said on Friday. CII Director General Chandrajit Banerjee said the RBI's continued resolve to ensure that the availability of liquidity, especially for the stressed sectors, remains adequate is commendable. FICCI President Sangita Reddy said relaxation in regulatory requirements further will help banks in dealing with the COVID impact. Ficci would request RBI that additional working capital should be mandated rather than depending on the discretion of the banks. Thomas Muthoot, Founder-Director, Muthoot Pappachan Group said:"Specific measures announced in terms of directing banks to invest 50 per cent of funds under TLTRO 2.0 in mid-sized NBFCs through NCDs, etc., refinancing of all-India financial institutions like SIDBI and NHB and also reduction in reverse repo rate, would help substantially in liquidity for us to lend a lot more to the common man, who are terribly impacted by the current crises." Describing the new RBI measures as a "life-saving dose" for millions of businesses, Assocham said the partial re-opening of the lockdown, further regulatory forbearances, infusion of additional liquidity and nudging banks to do real lending would provide a much-needed shield both to Corporate India as also the most vulnerable informal sectors of the economy against the Covid-19 onslaught."The Whatever-It-Takes approach of the RBI to face the challenge of the health crisis that is projected to shave USD 9 trillion off the global economy in two years, reflects courage and responsibility on the part of the RBI. Governor Shaktikanta Das is clearly on top of the situation, navigating it in the high seas of fast evolving challenges, resulting from the unprecedented health crisis, " Assocham Secretary General Deepak Sood said.He said the relief measures unveiled by the RBI should help NBFCs, housing finance companies, small businesses and above all considerably avert the risk of further NPAs. The Reserve Bank of India on Friday cut the reverse repo rate and announced a slew of measures including re-finance window of Rs 50,000 crore and targetted long term repo auction of similar amount to deal with the impact of the Covid-19 pandemic.In a video message, Das said in order to encourage banks to deploy the surplus funds in investments and loans in productive sectors of the economy, it has been decided to reduce the fixed rate reverse repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 4 per cent to 3.75 per cent with immediate effect.The reverse repo rate is the rate banks earn by parking deposits with the RBI.Surplus liquidity in the banking system has risen significantly in the wake of government spending and the various liquidity enhancing measures undertaken by the RBI, he noted.He also said it has been decided to conduct targeted long-term repo operations (TLTRO 2.0) for an aggregate amount of Rs 50,000 crore, to begin with, in tranches of appropriate sizes.Among other measures, Das also announced special refinance facilities for a total amount of Rs 50,000 crore to Nabard, Sidbi and National Housing Bank (NHB) to enable them to meet sectoral credit needs. RSN ANUANU

RBI's move to infuse liquidity will help businesses mitigate financial stress: India Inc

New Delhi, Mar 27 () A slew of measures announced by the RBI on Friday would help mitigate the impact of coronavirus-related lockdown on businesses, the industry said. The industry said that the steps would help push lending rates down, encourage banks to infuse money into productive sectors, infuse liquidity and address the financial stress in the system. The RBI on Friday allowed banks to put on hold EMI payments on all term loans for three months and cut interest rate by the steepest in more than 11 years as it joined the government efforts to rescue a slowing economy that has now got caught in coronavirus whirlwind. The Reserve Bank of India (RBI) cut repo to 4.4 per cent, the lowest in at least 15 years. Also, it reduced the cash reserve ratio maintained by the banks for the first time in over seven years. CRR for all banks was cut by 100 basis points to release Rs 1.37 lakh crore across the banking system. "The current situation in the economy and financial markets is extremely fragile and it required a massive dose of monetary stimulus to be injected at the earliest. The RBI has done just that. This should help lift the spirit of economy, " Ficci President Sangita Reddy said. "This, together with a host of other measures to boost liquidity will address the financial stress in the system on account of the COVID-19 outbreak and the consequent lockdown. The substantial reduction in the CRR will help banks to reduce their lending rates and aid monetary transmission, " CII Director General Chandrajit Banerjee said. Assocham President Niranjan Hiranandani said these measures, including reducing the cost of borrowing and reduction in the CRR would ensure India's financial stability at a time when there is heightened volatility in the global financial markets, with a desperate rush towards security. Cyril Shroff, Managing Partner at Cyril Amarchand Mangaldas said: "The RBI has unleased a bazooka to deal with the economic pain and uncertainty prevailing in the wake of the COVID crisis. Acting swiftly and decisively, the RBI has used several levers to increase liquidity in the system". PHD Chamber President D K Aggarwal said these measures will provide adequate liquidity in the system, bring down the cost of capital and mitigate the impact of pandemic COVID-19. The reverse repo rate was cut by 90 bps to 4 per cent, creating an asymmetrical corridor. RBI Governor Shaktikanta Das predicted a big global recession and said India will not be immune. It all depends how India responds to the situation, he said. Global slowdown could make things difficult for India too, despite some help from falling crude prices, Das said, adding food prices may soften even further on record crop production. Aggregate demand may weaken and ease core inflation further, he noted. After cutting policy rates five times in 2019, the RBI had been on a pause since December in view of high inflation. The measures announced come a day after the government unveiled a Rs 1.7 lakh crore package of free foodgrains and cash doles to the poor to deal with the economic impact of the unprecedented 21-day nationwide lockdown. While the Monetary Policy Committee (MPC) of the RBI originally was slated to meet in the first week of April, it was advanced by a week to meet the challenge of coronavirus. RSN MR

RBI steps to help mitigate impact of coronavirus lockdown on biz: Industry

New Delhi, Apr 17 () Banking and financial stocks were in high demand on Friday, advancing up to 21 per cent after the Reserve Bank announced a host of liquidity-boosting measures to support the economy amid the coronavirus crisis. Axis Bank zoomed 13.45 per cent, ICICI Bank rose by 9.89 per cent, IndusInd Bank 9.13 per cent, Federal Bank 9 per cent, City Union Bank 5.39 per cent and Kotak Mahindra Bank 4.96 per cent on the BSE. Axis Bank was the top gainer in the Sensex pack. Also, HDFC Bank jumped 3.33 per cent, RBL Bank 3.22 per cent and SBI 2.49 per cent. Led by the rally in these scrips, the BSE Bank index rose by 6.83 per cent. Likewise, from the finance pack, Equitas Holdings zoomed 21.15 per cent, Shriram Transport Finance Company 20 per cent, J&amp;K Bank 19.95 per cent, Indiabulls Housing Finance 17.61 per cent, Dhanlaxmi Bank 17.51 per cent, DCB Bank 16.54 per cent, Ujjivan Financial Services 14.54 per cent and Cholamandalam Investment and Finance Company 11.33 per cent. The BSE Finance index gained 5.44 per cent. "Given the unprecedented times we are in, it is heartening that RBI is addressing all these challenges at a war footing. We believe the key measures announced by RBI will help inject the much needed liquidity in the system, facilitate and incentivise credit flow and provide flexibility on regulatory forbearance. Markets are in buying zone," according to Motilal Oswal, MD and CEO of Motilal Oswal Financial Services. In the broader market, the 30-share BSE Sensex ended 986.11 points or 3.22 per cent higher at 31,588.72. "The RBI's announcement has correctly focused on the financial sector, specifically the NBFCs. However, given the current macro conditions, we need to watch how the banks utilize the various windows and options given by the RBI to assess whether credit growth increases and the extent of support that the NBFC sector gets," said Suvodeep Rakshit, Vice President and Senior Economist, Kotak Institutional Equities. The RBI on Friday further eased bad-loan rules, froze dividend payment by lenders and pushed banks to lend more by cutting the reverse repo rate by 25 basis points, as it unveiled the second set of measures to support the economy hit hard by the coronavirus-led slowdown. In his second televised address since the nationwide lockdown began from March 25, the Reserve Bank of India (RBI) Governor Shaktikanta Das pledged to boost liquidity and expand bank credit. Other interest rate-sensitive indices like auto and realty also closed with significant gains. "NBFCs are clear beneficiaries of these measures. For investors in banks, the provision of higher liquidity and relaxation in provisioning norms are welcome, but the bar on dividend distribution and new provisioning norms are negatives for the time being. "While the RBI is doing its part in providing reliefs in the current times, the street could keep expecting more and there could also be some concern about the time it would take for these measures to have an impact at the ground level," said Deepak Jasani - Head Retail Research, HDFC Securities. SUM ABMABM

Banking, financial stocks zoom up to 21 pc after RBI lift

New Delhi, Mar 16 () Industry body Assocham on Monday welcomed RBI Governor Shaktikanta Das' assurance that the central bank stands ready to take any measure to help the economy amid the current global health emergency. Speaking at a hurriedly-called press conference in Mumbai, Das said the Reserve Bank has "enough policy tools and stands ready to take any measures" needed to help the economy tide over the impact of the coronavirus pandemic. Governor Das' comments should reassure India Inc about the stability of the Indian financial markets, Assocham Secretary General Deepak Sood said. "In the midst of pressure on the currencies of the emerging markets and global mismatches in the dollar liquidity, the RBI is rightly and swiftly acting by different tools available to it, including the Swap options. "Our large resource of foreign exchange of USD 487 billion gives an adequate elbow room to the RBI to be on top of the fast evolving situation in the world markets where there is a risk aversion as nations battle it out with the unprecedented pandemic," Sood said. He said both the RBI and the government are doing whatever it takes to mitigate the impact of the coronavirus even as certain segments of the economy, like tourism, trade and transport, have come in under severe pressure. "As far as the emergency cut in the policy interest rates is concerned, we must have full faith in the RBI Governor's assertion that nothing is ruled out at this junction. It is clear from his statement that the emergency rate cut is possible. "We must also have confidence in the Monetary Policy Committee to take an appropriate call, especially in the face of the worldwide reductions in the rates, including taking the same to zero by the US Federal Reserve," Assocham said. In two liquidity enhancing measures, Das announced another round of USD 2 billion dollar-rupee swap on March 23, and said the RBI will continue to conduct the long-term repo operations (LTROs) of up to Rs 1 lakh crore as and when required. On March 16, the RBI conducted the first dollar-swap for USD 2 billion under which the central bank bought rupee from the market by selling dollars. On the LTROs, it has already conducted four rounds worth Rs 1 lakh crore since February 14, after announcing it at its February 6 policy review. RBI will announce the first monetary policy for 2020-21 in the first week of April. KPM ABM

RBI move on dollar liquidity re-assuring; rate cut appears very much on cards: Assocham

New Delhi, Apr 17 () TVS Motor Company on Friday lauded RBI's measures to support the economy amid countrywide lockdown. The RBI has announced a slew of measures to boost liquidity to NBFCs and other financial institutions. It also reduced the reverse repo by 25 basis points to 3.75 per cent. "I strongly support the measures announced by the RBI today to support the economy in this period. It is a sign of their continued efforts to stimulate economic activity and protect jobs," TVS Motor Company Chairman Venu Srinivasan said in a statement. The long-term repo operation for NBFCs and micro-lenders is a good tool to ease liquidity without tinkering with policy rates and Rs 50,000 crore is a substantial amount, he added. "This should restore confidence especially among the MSME sector which provides a significant portion of the country's jobs and is integral to all supply chains," Srinivasan said. That coupled with a cut in the reverse repo rate will incentivise banks to actively lend to those most in need of funds and make it affordable for businesses to borrow, address their working capital needs and get back into action as the country opens, he added. MSS SHWSHW

Strongly support measures announced by RBI to revive economy: TVS Motor

New Delhi, Apr 21 () The Reserve Bank of India (RBI) is expected to cut interest rates by 75 basis points by March 2021 as monetary easing measures till now are insufficient to lift the economy reeling under the stress of the Covid-19 pandemic, Fitch Solutions said Tuesday. "In the light of a widening interest rate corridor as well as other aggressive monetary easing measures by the RBI, we have revised our expectations to 75 bps worth of cuts by March 2021, which imply a repo rate of 3.65 per cent and a reverse repo rate of 3.00 per cent," it said. On April 17, the RBI announced a range of additional liquidity enhancing measures aimed at supporting credit flow to the economy. These measures included a 25 bps cut to its reverse repurchase (repo) rate to 3.75 per cent to lower the incentive for banks to park their surplus funds with the central bank. The policy repo rate was left at 4.40 per cent. "We believe that existing monetary easing measures are still insufficient to lift the economy out of the economic crisis brought about by the Covid-19 outbreak, and softening inflationary pressures will allow for the implementation of more easing measures," Fitch Solutions said in a note. Other measures announced by the RBI on April 17 included targeted long-term repo operations (TLTRO 2.0) for an aggregate amount of Rs 50,000 crore. The funds availed by banks under TLTRO 2.0 will have to be invested in investment grade bonds, commercial paper, and non-convertible debentures of non-bank financial companies (NBFC), with at least 50 per cent of the total amount going to small and medium-sized NBFCs and micro-finance institutions (MFI). In addition, banks have to make these investments within one month from receiving the funds from the RBI. Also, it reduced the liquidity coverage ratio to 80 per cent, from 100 per cent previously and provided a special financial facility of Rs 50,000 crore to All India Financial Institutions (AIFIs) at the repo rate. Besides, an increase in the amount state governments can borrow was allowed by further increasing the ways and means advance (WMA) limit for states by 60 per cent on top of March 31 levels until September 30, up from a 30 per cent increase announced on April 1. RBI also relaxed the 90-day non-performing asset (NPA) classification norms for accounts being granted the three-month loan moratorium announced on March 27. However, an additional loss provisioning of at least 10 per cent of the total of these accounts have to be made, to be phased over two quarters (quarters ending March and June 2020) at no less than 5 per cent per quarter. "We believe that existing measures as they stand, are still insufficient to lift the Indian economy out of the current economic crisis brought about by Covid-19," Fitch Solutions said. According to the RBI, TLTRO 2.0 was implemented as the deployment of TLTRO funds so far has largely been to bonds issued by public sector entities and large corporates, especially in primary issuances. The disruptions caused by Covid-19 have, however, more severely impacted small and mid-sized corporates, including NBFCs and MFIs, in terms of access to liquidity, it said. "We expect loan demand to remain subdued amid a weak economic outlook, as small and medium-sized businesses continue to go out of business and larger corporates defer their capital expenditures for FY2020/21 (April – March)," it said. ANZ ANSANS

Fitch Solutions says RBI may cut interest rates by 75 bps by March 2021

New Delhi, Apr 17 () Union Home Minister Amit Shah said on Friday the Narendra Modi government is leaving no stone unturned to tackle the crisis caused by the novel coronavirus outbreak in the country.Complimenting the Reserve Bank of India (RBI) for the steps taken to boost the economy, Shah said such action will further reinforce Modi's vision."Modi government is leaving no stone unturned in this fight against COVID-19, ensuring minimum disruption in people's lives while planning for a strong and stable India in days ahead," he tweeted.The home minister said the RBI's decision to extend Rs 20,000 crore credit facility to NABARD and Rs 15,000 crore to SIDBI will greatly help the farmers, provide the much needed financial stability to MSMEs and start ups, and boost the 'Make in India' programme.Shah said the Rs 10,000 crore to National Housing Bank (NHB) and liquidity measures for banks and non-banking financial companies (NBFCs) will help too."Steps taken by RBI today, to boost Indian economy, further reinforce PM Narendra Modi's vision," he said.The RBI on Friday further eased bad-loan rules, froze dividend payment by lenders and pushed banks to lend more by cutting the reverse repo rate by 25 basis points, as it unveiled a second set of measures to support the economy hit hard by a coronavirus-led slowdown.In his second televised address since the nationwide lockdown began from March 25, Reserve Bank of India (RBI) Governor Shaktikanta Das pledged to boost liquidity and expand bank credit. ACB NSDNSD

Modi govt leaving no stone unturned to fight COVID-19: Amit Shah

New Delhi, Mar 27 () From Prime Minister Narendra Modi to rating agencies and economists, all welcomed the Reserve Bank of India's steps to reduce the cost of borrowing and infusing liquidity in the market in its war against the impact of coronavirus pandemic. Following are the comments made by key leaders, businessmen and economists:* Prime Minister Narendra Modi: Today RBI has taken giant steps to safeguard our economy from the impact of the Coronavirus. The announcements will improve liquidity, reduce the cost of funds, help middle class and businesses.* Finance Minister Nirmala Sitharaman: Appreciate RBI Governor Shaktikanta Das' reassuring words on financial stability. The 3-month moratorium on payments of term loan installments (EMI) and interest on working capital give much-desired relief. The slashed interest rate needs quick transmission.* Alka Anbarasu of Moody's Investors Service: "RBI's guidelines permitting banks and non-bank financial institutions to grant a 3-month moratorium on loan repayments will soften the negative credit impact that the coronavirus has had on their borrowers in the near term. However, there are still material downside risks to asset quality given the halt in India's economy, the impact of which will not be known until a few quarters after the end of the moratorium.* SBI Chairman Rajnish Kumar: The RBI policy announcements are bold, decisive, compelling and with a humane touch in attenuating to the needs of the economy to fight through the pandemic.The large rate cut, the adjustment in capital conservation buffer, the moratorium on repayments and the bazooka of conventional CRR cut and unconventional liquidity measure of incentivising banks to support CP market - all will help financial markets stabilise, lead to immediate rate transmission and address the credit needs of the real economy. Given that we are in exceptional times, RBI has played the role of championing the cause for the economy and financial system!* Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas: The RBI has unleashed a bazooka to deal with the economic pain and uncertainty prevailing. This provides a much-needed respite for borrowers and lenders in these trying circumstances and should soften the recovery period.* BJP president Jagat Prakash Nadda: RBI decision will help the middle class. I welcome these progressive and timely measures.* Oil Minister Dharmendra Pradhan: Moratorium on payment of interest on loans and working capital will provide much-needed relief to both people and businesses. * Raymond Ltd chairman and managing director Gautam Hari Singhania: The moves announced by RBI today are decisive and a comprehensive package to ensure the stability of financial markets making borrowing costs as low as possible with businesses around the country are closed and the economy is showing recessionary trends.The steps to ease working capital pain, reduced liquidity costs and providing moratorium on term loans will alleviate stress across various sectors.* Essar Ports CEO Rajiv Agarwal: Moratorium of 3 months for interest and principle payments along with a sharp cut in the CRR will ease the liquidity and help industry as well other segments of the economy. More steps might be needed once the Government comes out with the much-needed stimulus package to overcome the economic crisis arising from COVID-19.* Anshuman Magazine, CBRE: RBI is in a mission mode to nurture the market, preserve financial stability and the timing here is crucial. The decision to defer installments of all term loans by three months will provide the necessary support to homebuyers as well.* Arun Singh, Chief Economist, Dun and Bradstreet: Strong proactive measures have been taken by RBI to address the need of the country in times of heightened uncertainty. Such robust measures were unanticipated and would restore the confidence of the market, restrict foreign capital outflows, both in the debt and equity market, and will help in arresting depreciation of rupee.Mitigating debt servicing burden to prevent transmission of financial stress to the real economy was much needed as various countries globally have deferred loan payments from three to six months. However, banks might face difficulties meeting the capital adequacy norms which we expect will be further relaxed by the RBI during the short term.* Gayathri Parthasarathy, KPMG: It is a good decision and the time is right for RBI to intervene and announce these measures. The steps to ease working capital pain, reduce liquidity costs and provide a moratorium on term loans will alleviate stress across various sectors. Liquidity will definitely help the current situation and I strongly believe the rates could go down further by 50 to 75 basis points.* Sanjay Doshi, KPMG: Onus is now on the financial institutions to ensure better credit support to the corporate. However, given the challenging times, many corporates will have significant pressure on their income stream. Banks will have a tough job in deciding the allocation of credit.* Muthoot Pappachan Group Chairman Thomas John Muthoot: Various measures to nudge banks to lend and to inject liquidity into the system, will help in passing the benefit to the potential borrowers.* Radhika Rao, Economist, DBS Group Research: RBI pulled all the stops, delivering an aggressive rate cut. Its moves provide the right tailwind for the economy once the lockdown is complete. ANZBAL

PM, FM, industry welcome RBI 'bazooka' of interest rate cut, liquidity measures

<ul><li>The HDFC Bank lost over $2 billion in market value after the Reserve Bank of India (RBI) asked it to stop all launches of its upcoming digital business-generating activities temporarily.</li><li>The share price of private-sector lenders cracked nearly 2% during the afternoon session after trading in the green for almost two hours. </li><li><a href="https://www.businessinsider.in/">Check out the latest news and updates on Business Insider.</a> </li></ul>India’s second most valued listed company, HDFC Bank lost over $2 billion in market value after the <a href="https://www.businessinsider.in/finance/banks/news/rbi-directs-hdfc-bank-to-suspend-its-digital-business-and-new-credit-cards-amid-rising-incidents-of-outages/articleshow/79542055.cms">Reserve Bank of India (RBI) asked it to temporarily stop all launches </a>of its upcoming digital business-generating activities and sourcing of new credit card customers. The share price of private-sector lenders cracked over 2% during the afternoon session after trading in the green for almost two hours. The crack in its shares also brought the Indian benchmark index down from 300 points higher to 30 points higher. <div type="image" title="HDFC Bank" msid="79545706" hostid="261"></div> The RBI decision came after the <a href="https://www.businessinsider.in/tech/apps/news/hdfc-banks-net-banking-upi-services-and-atms-down-due-to-data-centre-outage/articleshow/79344484.cms">recent outage</a> at its data centre, which impacted operations last month. It is noteworthy that among all the lenders, HDFC is the largest credit card seller in the country. “RBI has issued an order dated December 2, to HDFC Bank Ltd with regard to certain incidents of outages in the internet banking/ mobile banking/ payment utilities of the bank over the past two years, including the recent outages in the bank’s internet banking and payment system on November 21, 2020, due to a power failure in the primary data centre,” the bank said in a regulatory filing. According to the bank the <a href="https://www.bseindia.com/xml-data/corpfiling/AttachLive/893abfb4-95cb-4942-a555-312aef465ef4.pdf">RBI order</a> “has advised the bank to temporarily stop all launches of the digital business-generating activities planned under its program Digital 2.0 and other proposed business generating IT applications and sourcing of new credit card customers”. In addition, the order has directed the bank board to examine the lapses and fixes accountability. The lender said the above measures should be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI. HDFC Bank said “over the last two years, it has taken several measures to fortify its IT systems and will continue to work swiftly to close out the balance and would continue to engage with the regulator in this regard. “The bank has been taking conscious, concrete steps to remedy the recent outages on its digital banking channels and assures its customers that it expects the current supervisory actions will have no impact on its existing credit cards, digital banking channels and existing operations. The bank believes that these measures will not materially impact its overall business,” it added. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/top-stock-movers-ril-maruti-indigo-dhfl-spicejet-wipro-future-retail-and-others/articleshow/79541459.cms" data-type="tilCustomLink">Sensex, Nifty hit record high — these are the top movers in trade today </a> <a href="https://www.businessinsider.in/tech/news/india-may-reportedly-block-wikipedia-if-the-site-doesnt-delete-the-map-showing-aksai-chin-as-a-part-of-china/articleshow/79541391.cms" data-type="tilCustomLink">India may reportedly block Wikipedia if the site doesn't delete the map showing Aksai Chin as a part of China</a>

HDFC Bank has lost over $2 billion in market value after the RBI crackdown on the lender’s digital business

New Delhi, Apr 17 () The RBI measures will revive credit flow by commercial banks and targeted long-term repo operation (LTRO) would further activate the corporate bond market and also provide much needed liquidity to NBFCs, Niti Aayog vice chairman Rajiv Kumar said on Friday.The RBI on Friday further eased bad-loan rules, froze dividend payment by lenders and pushed banks to lend more by cutting the reverse repo rate by 25 basis points, as it unveiled a second set of measures to support the economy hit hard by coronavirus-led slowdown."Kudos to the government and RBI for announcing another bazoka like package for reviving up credit activity by commercial banks and also by NABARD. The targeted LTRO will further activate the corporate bond market and also provide much needed liquidity to NBFCs."The government true to his word on doing what it takes to address the crisis brought on by the coronavirus pandemic," Kumar said in a series of tweets.LTRO is a tool which central bank uses to offer money to banks for a period of one to three years at the prevailing repo rate. The banks in turn offer government securities with same or higher tenure as a collateral to the central bank.The Niti Aayog vice chairman also pointed out that forward guidance by the government and RBI indicates a softening inflationary outlook that will provide needed space for monetary policy to act in case further action is needed to bring the economy back on track.In his second televised address since the nationwide lockdown began from March 25, Reserve Bank of India (RBI) Governor Shaktikanta Das pledged to boost liquidity and expand bank credit.Niti Aayog CEO Amitabh Kant also welcomed the announcements made by the RBI and said extremely constructive and positive second set of interventions by RBI Governor Shaktikanta Das to address financial impact of COVID-19 pandemic."Accurate assessment of conditions and immediate prognosis by him. Right-sized help to pain points and will help improve liquidity in economy," Kant said. BKS BAL

RBI measures to expand bank credit, boost liquidity: Niti Aayog

New Delhi, Mar 26 () The Reserve Bank of India on Friday asked all lending institutions to allow three-month moratorium on EMI payments in order to infuse liquidity into the system as the economy grapples with COVID-19 challenges.It has also allowed banks for deferment of interest on working capital loans for the next three months - until June 2020.RBI Governor Shaktikanta Das in a press conference said these are extraordinary circumstances, and unprecedented measures are required to support the sagging economy as all the economic activities have come to a halt.The liquidity measures announced by the RBI will make available a total Rs 3,74,000 crore to the country's financial system.Das said that the deferment on loan and interest repayments will not be classified as defaults and will not impact credit history of borrowers. KPM BALBALBAL

RBI asks lending firms to allow 3-month moratorium on EMI payments

Mumbai, Apr 20 () The RBI on Monday asked banks and NBFCs to carry out money laundering (ML) and terrorist financing (TF) risk assessment exercise periodically.The Reserve Bank said it has added a new section in the Master Directions on KYC.This requires its regulated entities (REs) to carry out ML and TF risk assessment exercise periodically to identify, assess and take effective measures to mitigate its money laundering and terrorist financing risk for clients, countries or geographic areas, products, services, and transactions or delivery channels. "While assessing the ML/TF risk, the REs are required to take cognizance of the overall sector-specific vulnerabilities, if any, that the regulator/supervisor may share with REs from time to time," the RBI said in a circular. Further, the internal risk assessment carried out by the regulated entity should be commensurate to its size, geographical presence, complexity of activities/structure, it added.Entities regulated by the RBI include, banks, All India Financial Institutions, NBFCs, and all payment system providers."Also, the REs shall apply a Risk Based Approach (RBA) for mitigation and management of the identified risk and should have Board approved policies, controls and procedures in this regard," the RBI's circular added.The new KYC has come in force with immediate effect, the RBI added. NKD MKJ

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