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<ul><li>While <keyword id="8763838" type="UNKNOWN" weightage="20" keywordseo="covid-19">Covid-19</keyword> is sure to transform the way the world learns and works, business leaders must remember that this is not a one-off crisis, writes <keyword id="198964" type="PERSON" weightage="20" keywordseo="Suvodeep-Das">Suvodeep Das</keyword>, Vice President – Sales &amp; Marketing, <keyword id="6409110" type="PERSON" weightage="20" keywordseo="sodexo">Sodexo</keyword> Benefits &amp; Rewards India. </li><li>He further shares a few ways in which technology can be the unlikely saviour for entrepreneurs.</li></ul> Epidemics, on the other side of the world, are a threat to us all. No epidemic is just local. -Peter Piot, Belgian Microbiologist 2020 – a new year, a new decade, marking the beginning of a much-anticipated new era in technology and digitalization! Little did we know what was about to unfurl, not in the distant future, but a brief span. What started as flu in China has spread faster than any disease in the modern era, WHO declared it a <a href="https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19---11-march-2020">pandemic</a> on 11th March. Within two days, WHO had also come up with guidelines to control the transmission of the disease. Quarantines of suspected cases and social isolation of the general public are topmost on the list of ‘things to do.’ As of date, more than 50+ countries have implemented a nationwide shutdown. In India itself, the central government has laid down the <a href="https://www.mohfw.gov.in/SocialDistancingAdvisorybyMOHFW.pdf">guidelines</a>, and most states are in a state of partial shutdown. Educational institutions, malls, movie houses, stores except those selling essential commodities – all have been closed. People have been advised to stay home and venture out only when they must. The economy is much more fragile than we realize. The result has been deadly for the global economy as well, not because of the virus itself, but because of its consequences. Quarantines and isolation mean no travel, no stepping out, no eating out, and no outside entertainment, i.e., no spending. Already wobbling from the impact of a prolonged recession, entire industries are on the brink of collapse. The stock markets are seeing new depths every single day; the Sensex, for example, has gone down by 10,000 points in just one month. While the most obvious impact has been on the travel and hospitality sector, almost all industries are reeling from the continuing shock. Restaurants, malls, shops, gyms, and even factories are shutting down. Technology is the unlikely savior. In this time of mandated social distancing, the only way out for businesses is to transfer their services to the internet; after all, this is one virus that can’t spread online. The digital economy is the best way out for a world that is becoming more and more threatened every day. Organizations that have chosen to go digital for their day-to-day activities are the ones that can maintain some semblance of normalcy and help reduce the ‘spread’ of the disease. <ol><li>Physical currency is one of the most common modes of catching or passing on any virus, using digital payments will go a long way in limiting the spread as people will not need to touch any currency.</li><li>Digital employee benefits like gift cards, meal cards, etc. have worked as an alternative to currency as well, ensuring that even when people are working from home, they can use their benefits, be it for food, groceries or online shopping.</li><li>Quite a few organizations in the country have advocated Working from Home (WFH) using Video conferencing, choosing to conduct business as usual, albeit in a different mode. A lot of schools and colleges have also refused to bow down to the virus; using the remote classroom concept instead. </li><li>A lot of companies have invested in shared drives so that it doesn’t put additional pressure on email infrastructure; even more so for teams used to working with massive files.</li><li>Since companies need to take some extra steps to motivate teams working remotely, especially for ones who are used to only working together, instant, digital rewards programs that can be given remotely, every day will be a powerful tool.</li></ol>While Covid-19 is sure to transform the way the world learns and works, business leaders must remember that this is not a one-off crisis. In a world with rapidly shrinking boundaries, an epidemic/crisis in even the furthest corner of the world is likely to have an adverse impact on ours. Learning from the current crisis and staying prepared for the next one is the only way to overcome any disaster of this magnitude. - By Suvodeep Das, Vice President – Sales &amp; Marketing, Sodexo Benefits &amp; Rewards India.

Technology: The way out for businesses during Coronavirus outbreak

<ul><li>Most economists believe that a 25-basis-point rate hike in April is almost certain. </li><li>This is after the February CPI inflation print came in at 6.44% – a number that is slightly lower than January’s print of 6.52%, but still above the Reserve Bank of India’s upper tolerance limit of 6%. </li><li>The <keyword id="117388" type="General" weightage="80" keywordseo="us-fed" source="Orion">US Fed</keyword>, which has so far led rate hike action, is expected to take a pause in March due to the collapse of Silicon Valley Bank and Signature Bank. </li></ul>Shaktikanta Das-led Monetary Policy Committee (MPC) is expected to hike the <keyword id="43352" type="General" weightage="20" keywordseo="Repo-rate" source="Orion">repo rate</keyword> by 25 basis points (bps) come April, as retail inflation continues to remain hot and above the central bank’s upper tolerance limit of 6%. This is despite the fact that the recent collapse of Silicon Valley Bank and Signature Bank in the US has resulted in<a href="https://www.businessinsider.in/policy/economy/news/the-godot-recession-could-be-pushed-back-further-svb-crisis-could-force-us-fed-to-pause-rate-hikes/articleshow/98612680.cms"> analysts saying</a> the US Federal Reserve is likely to pause its rate hike spree to let the country’s banking system take a breather. While the US <keyword id="45672" type="General" weightage="80" keywordseo="fed" source="Orion">Fed</keyword> has led other central banks in raising interest rates so far, the Reserve Bank of India (<keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword>) could stick to its guns regardless of what the Fed does on March 22, when it meets to decide the direction of its monetary policy, analysts say. “The RBI will remain hawkish in the April policy as inflation prints have spiked back over 6% in January-February along with core inflation remaining sticky above 6%. We continue to expect a 25 bps repo rate hike in the April policy,” said Suvodeep Rakshit, senior economist, Kotak Institutional Equities. Hundred basis points make up a percentage point. <cmsannotation type="cmsannotation" annotationid="Hot inflation, hawkish Das" comment="subhead" text="Hot inflation, hawkish Das">Hot inflation, hawkish Das</cmsannotation> Inflation running hot could also result in RBI’s Das maintaining his hawkish stance. Announcing the last rate hike in February, Das noted that core inflation has remained sticky. “On balance, the Monetary Policy Committee (MPC) was of the view that further calibrated monetary policy action is warranted to keep inflation expectations anchored,” Das had said at the time. Since then, the inflation numbers have not been encouraging – the<a href="https://www.businessinsider.in/india/news/economists-are-shocked-concerned-and-worried-as-retail-inflation-hits-3-month-high-in-january/articleshow/97900258.cms"> January inflation</a> print came as a shocker, with the consumer price index (CPI) inflation rising from 5.72% in December to 6.52% in January. It was <a href="https://www.businessinsider.in/finance/news/retail-inflation-sees-marginal-fall-to-6-44-in-february-2023/articleshow/98610218.cms">6.44%</a> in February. This has prompted <a href="https://www.businessinsider.in/finance/news/inflation-expected-to-cool-down-but-economists-expect-another-rate-hike-after-january-shocker/articleshow/97983231.cms">analysts to suggest</a> that RBI could go in for another 25 bps hike in April, taking the repo rate to 6.75% and the quantum of hikes to 275 bps since May 2022. “We also believe that a 25-basis-point hike in April by the RBI is almost certain,” said Nikhil Gupta, chief economist at Motilal Oswal, adding that the worst of inflation was likely behind us. RBI’s next bi-monthly monetary policy meeting is scheduled for April 6. <cmsannotation type="cmsannotation" annotationid="April hike certain according to most economists" comment="subhead" text="April hike certain according to most economists">April hike certain according to most economists</cmsannotation> Despite the adverse developments in the US banking system, most analysts maintained that a 25 bps hike in April is almost a given. “We do think the upcoming meeting in April is going to be another 25 basis points hike, but thereafter we think the monetary policy committee is going to be divided,”<a href="https://www.businessinsider.in/finance/banks/news/rbi-may-hike-benchmark-lending-rates-by-25-bps-in-april-dbs/articleshow/98607945.cms"> said</a> Radhika Rao, senior vice president and economist, DBS Bank. On the other hand, according to Siddhartha Sanyal, chief economist and head of research at Bandhan Bank, the developments in the banking sector in the US “will likely have a bearing on the Fed’s course of action, and, thereby, on monetary policy across countries.” In conjunction with the drying up of excess liquidity in the Indian banking system, the “bar for further hike in the repo rate has moved higher,” according to Sanyal. Economists at SBI Research have pushed back their estimates by a month for inflation cooling down to 5% – they now see it happening by April, from March earlier. “Inflation will decline materially and come down to 5% by April 2023. For Q1 FY24, we expect an average CPI of 5.1%,” said a report by SBI Research. RBI has projected CPI inflation at 6.4% for FY23 and 5.3% for FY24. While the April rate hike is almost certain now, further hikes will depend on whether or not there are more inflation shockers in store. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/indian-banks-pass-jefferies-silicon-valley-bank-test-brokerage-finds-them-well-placed/articleshow/98628328.cms">Indian banks pass Jefferies’ Silicon Valley Bank test, brokerage finds them ‘well placed’</a> <a href="https://www.businessinsider.in/policy/economy/news/the-godot-recession-could-be-pushed-back-further-svb-crisis-could-force-us-fed-to-pause-rate-hikes/articleshow/98612680.cms">The ‘Godot’ recession could be pushed back further, SVB crisis could force US Fed to pause rate hikes</a> <a href="https://www.businessinsider.in/business/corporates/news/adani-stocks-rally-after-group-prepays-2-15-billion-margin-linked-loans/articleshow/98601176.cms">Adani stocks rally adds ₹2.61 lakh crore to group market cap in March so far</a>

RBI largely expected to hike repo rate by 25 bps in April even as US Fed expected to take a pause

<ul><li>In the last two years, interest rates on loans have gone up by 1.9% – undoing the <keyword id="6357050" type="General" weightage="20" keywordseo="EMI" source="Orion">EMI</keyword> mathematics of most borrowers. </li><li>Most experts predict that there are more rate hikes coming as early as December. </li><li>For auto and <keyword id="35519" type="General" weightage="20" keywordseo="home-loans" source="Orion">home loans</keyword>, borrowers can consider extending their tenures if the burden is higher. </li></ul>Be prepared to pay more interest if you want to borrow to buy a home or a car. The era of low interest rates has formally ended, with the Reserve Bank of India kicking off its rate hike cycle in May. The repo rate or the rate at which central banks lend to banks has risen by 1.9% after four consecutive hikes. That means EMIs will only go up making it costlier for borrowers. While existing borrowers of home loans may see their tenures go up, equated monthly installments (EMIs) of personal loans and <keyword id="35527" type="General" weightage="20" keywordseo="auto-loans" source="Orion">auto loans</keyword> will rise further after today’s 50 basis point rate hike. "The Reserve Bank of India has hiked the repo rate by 50 basis points. This marks the fourth consecutive rise in the repo rate, bringing it to 5.9%. This will definitely impact the new and existing borrowers. However, this decision has been made to curb the rising inflation. With India’s inflation rate being 7%, the value of the currency might fall without the intervention of the RBI in order to try and sustain it and bring it down," said HP Singh, chairman &amp; managing director of Satin Creditcare Network. Home loans Let’s look at home loans first. If you have ₹50 lakh outstanding with a bank at an 8.5% interest rate spread across 20 years, the effective EMI you have is at ₹43,391. However, if the 50 basis point hike is passed on to the loan, the EMI will go up to ₹44,986 – an effective increase of ₹595 per month. For every one lakh of home loan for this tenure, the EMI will go up by ₹32. Auto loans The net impact is different for auto loans where the tenures are shorter but interest rates are different. For example if you have a ₹10 lakh auto loan at around 8.6% interest rate for a tenure of seven years, your EMI has been at ₹15,887. Again, in the changed interest rate regime, it would come up to ₹16,140 every month – an effective increase of ₹253. For every lakh of an auto loan for the said tenure, the EMI will go up by ₹25. Personal loans For a personal loan that’s spread across two years, the EMI for a ₹3 lakh loan at 11.4% would be at ₹14,038. After an interest rate reset, it would go up to ₹14,108 — an effective increase of ₹70. Increasing loan tenure? In the last two years, interest rates on loans have gone up by 1.9% – undoing the EMI mathematics of most borrowers. For auto and home loans, borrowers can consider extending their tenures if the burden is higher. However, it is to be noted that extending tenures will increase the interest payable across the years — and especially for large loans like home loans, the net payable will balloon correspondingly. The other factors that play a role in tenure extension would be the borrower’s age – while younger borrowers can afford it, most people must clear off long term loans before retirement age of 60. More hikes ahead? When he announced the rate hikes today, RBI governor <keyword id="6359111" type="General" weightage="20" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword> said that the consumer price inflation is still above the central bank’s tolerance level. “Going forward, the RBI will remain vigilant, agile and nimble in its liquidity management operations and would use all instruments at its disposal to mitigate the spillovers of global financial market volatility on domestic financial markets,” said Das. It means going ahead, there could be more rate hikes on the horizon and a lot of experts predict that too. “We continue to expect another 35 bps hike in December followed by a pause with the RBI assessing Fed actions, and impact of past rate hikes on domestic growth and inflation,” said Suvodeep Rakshit, senior economist at Kotak Institutional Equities. Those who have banked on low interest rates offered during the pandemic to take home loans, might have to adjust their monthly math — but the burden of growing interest is what most people across the world have been dealing with and partial prepayments will help if it can be afforded. Since more rate hikes might be coming, it would be a good idea to pay off personal loans if possible as they can get costlier. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/markets-shrug-off-50-bps-salvo-by-the-reserve-bank-of-indias-as-hike-largely-priced-in/articleshow/94550783.cms">Markets shrug off 50 bps salvo by the Reserve Bank of India’s as hike largely priced in</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/auto/news/tata-tigor-ev-vs-tata-tiago-ev-comparison-of-price-and-features/slidelist/94551771.cms">Tata Tigor EV vs Tiago EV - which one should you buy?</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/presidential-commission-recommends-stamping-of-h-1b-visas-inside-us/articleshow/94551768.cms">Presidential commission recommends stamping of H-1B visas inside US</a>

Here is how much your EMI will go up after the recent repo rate hike

<ul><li>The <keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword> has kept its growth projection for the current financial year unchanged at 6.5%</li><li>“We will keep Arjuna’s eye on inflation,” says Governor Das</li><li><keyword id="3929464" type="General" weightage="20" keywordseo="rbi-mpc" source="Orion">RBI MPC</keyword> votes in favor of maintaining the ‘withdrawal of accommodation’ stance looking at the global macro economic situation.</li></ul>The Reserve Bank of India <keyword id="6375120" type="General" weightage="20" keywordseo="monetary-policy-committee" source="Orion">Monetary Policy Committee</keyword> in its June policy has decided to hold the <keyword id="43352" type="General" weightage="20" keywordseo="repo-rate" source="Orion">repo rate</keyword>, or the lending rate of the central bank, at 6.5%. This is the second straight policy in which rate has been held showing that the rate hike cycle is now truly over. Consequently, the bank rate and the Marginal Standing Facility (MSF) rate has been kept unchanged at 6.75% <keyword id="64190" type="General" weightage="20" keywordseo="rbi-governor" source="Orion">RBI Governor</keyword> Shaktikanta Das also said that the MPC voted in favour (5 out of 6 members) of holding its policy stance at “withdrawal of accommodation”. The market was speculating whether the stance would see a positive change but Das highlighted that inflation still remains above the 4% target and is expected to stay so till the year end. “Being in the inflation tolerance band is not enough. Our goal is to bring inflation to 4%,” said Das in this announcement. It is noteworthy that the pause in rate hike comes after the benchmark rate was hiked by 250 basis points since May 2022 and a breather was only taken in the April policy this year. <cmsannotation type="cmsannotation" annotationid="Growth projection" comment="subhead" text="Growth projection">Growth projection</cmsannotation> <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#000000;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Period </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#000000;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Current (%) </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#000000;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Earlier (%) </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q1FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">8 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.8 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q2FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.5 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.2 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q3FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">6 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.1 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q4FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.7 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.9 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY24 (overall) </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.5 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.5 </td></tr></tbody></table> The RBI has kept its growth projection for the current financial year (FY24) unchanged at 6.5%. This comes at the backdrop of the World Bank revising India’s GDP forecast downwards by 30 bps earlier in the week. The Indian economy and financial sector stand out as strong and resilient, and domestic macroeconomic fundamentals are strengthening. Rural demand is on a revival path,” said Das adding, “GDP growth in 2022-23 turned out to be stronger than anticipated and is holding up well. Highlights financial stability concerns, impact of rate hikes.” <cmsannotation type="cmsannotation" annotationid="Inflation projection" comment="subhead" text="Inflation projection">Inflation projection</cmsannotation> <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#000000;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Period </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#000000;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Current (%) </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#000000;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Earlier (%) </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q1FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.6 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.1 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q2FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.2 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.4 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q3FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.4 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.4 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q4FY24 </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.2 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.2 </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY24 (overall) </td><td style="border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.1 </td><td style="border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:2pt 5pt 2pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.2 </td></tr></tbody></table> RBI has trimmed its current financial year (FY24) inflation projection by 10 bps to 5.1%. “We will keep Arjuna’s eye on inflation,” said Das, making it very clear that the central bank has inflation control as its top priority. He added, “MPC will remain vigilant and will take further policy action as and when required to keep inflation expectations anchored and bring inflation down to 4%” <cmsannotation type="cmsannotation" annotationid="The Reading" comment="subhead" text="The Reading">The Reading</cmsannotation> Economists had more or less predicted a status quo policy and continue to believe that rate hikes are over for this year. Suvodeep Rakshit, senior economist, Kotak Institutional Equities said after the policy, "We believe there are some downside risks to growth. We believe that rate cuts will be contingent on significant divergence in growth-inflation prospects. We maintain our call that the RBI will be on an extended pause." According to Indranil Pan, Chief Economist, Yes Bank, the upside surprise seen in the latest released GDP numbers Q4FY23 show that the economy is resilient even as private consumption expenditure remains on the slow track.

RBI MPC holds interest rate as expected but stance maintained at ‘withdrawal of accommodation’

<ul><li>The Reserve Bank of India on Thursday made a moderate revision in its growth and inflation outlook for FY24. </li><li>Citing robust urban demand and a healthy growth in rural demand during Q4, <keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword> increased the FY24 GDP growth outlook to 6.5% from 6.4% earlier. </li><li>RBI has projected FY24 inflation at 5.2% from 5.3% earlier, citing robust rabi harvest, easing commodity prices and expectations of a normal monsoon. </li></ul>The Reserve Bank of India on Thursday revised India’s economic growth outlook upwards, expecting a real gross domestic product (GDP) growth rate of 6.5% in FY24, crediting it to a resilient economy in Q4 FY23. This is a 10 basis point increase from the previous Monetary Policy Committee (<keyword id="6369693" type="General" weightage="80" keywordseo="mpc" source="Orion">MPC</keyword>) announcement in February, which pegged FY24 GDP growth at 6.4%. RBI governor Shaktikanta Das announced the upward revision in the GDP growth outlook during the<a href="https://www.businessinsider.in/finance/news/rbis-monetary-policy-committee-keeps-repo-rate-unchanged-at-6-5/articleshow/99284354.cms"> MPC announcement today</a> while keeping the repo rate unchanged at 6.5%. Das said that the Indian economy is projected to grow at 7.8% in Q1 FY24, and subsequently at 6.2%, 6.1% and 5.9% in the second, third and fourth quarters, respectively. <div type="image" title="India GDP FY24 RBI projection April 2023." msid="99289989" hostid="261" sizebytes="13812" caption="&amp;lt;p&amp;gt;RBI&amp;#39;s FY24 GDP growth projection&amp;lt;/p&amp;gt;"></div> “While the numbers may not really be significant, the messaging is subtle that the MPC expects the economy to fare well on both counts this year,” said Madan Sabnavis, chief economist, Bank of Baroda. <cmsannotation type="cmsannotation" annotationid="Resilient economy, healthy growth in rural demand" comment="subhead" text="Resilient economy, healthy growth in rural demand">Resilient economy, healthy growth in rural demand</cmsannotation> Crediting the upward revision to a resilient economic performance in Q4, Das said that the overall demand scenario was robust in Q4 – while urban demand remained robust, rural demand had also seen a healthy growth in consumer non-durables, tractors and two-wheeler sales. “Looking ahead, the higher rabi production has brightened the prospects for the agriculture sector and rural demand. The steady growth in contact-intensive services should be positive for urban demand,” Das said. According to the analysts at ICICI Securities, too, high frequency indicators like GST collections, auto sales, air traffic, power demand, among other factors suggest that data does not corroborate the thesis of a slowdown in India. In contrast, data does suggest a slowdown in developed markets, the brokerage said. Echoing similar sentiments, Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities, said, “The RBI remains comfortably on the growth front, for now. We believe the risks to this outlook are skewed towards the downside.” With that being said, some analysts say RBI’s 6.5% growth projections could be slightly on the optimistic side. It is worth noting that the World Bank revised India’s FY24 growth projections slightly downwards to 6.3% from 6.6% earlier. “The 6.5% GDP growth rate appears to be on the optimistic side when seen in the context of a slowing global economy,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services. The Asian Development Bank too expects India’s growth to moderate to 6.4% in FY24 from 6.8% in FY23. Das, too, hedged growth expectations by stating that there are additional downside risks from financial stability concerns, alluding to the banking sector crisis in the US and Europe. For context, the International Monetary Fund, too, has trimmed the 2023 growth outlook for the global economy to 2.9% from 3.4% in 2022. <cmsannotation type="cmsannotation" annotationid="Inflation expected to soften, but battle not over yet" comment="subhead" text="Inflation expected to soften, but battle not over yet">Inflation expected to soften, but battle not over yet</cmsannotation> In a similar vein, RBI has trimmed its consumer price index (CPI) inflation expectations for FY24 marginally from 5.3% earlier to 5.2% now. <div type="image" title="CPI inflation FY24 RBI projection April 2023." msid="99290019" hostid="261" sizebytes="13944" caption="&amp;lt;p&amp;gt;RBI&amp;#39;s FY24 CPI inflation projection&amp;lt;/p&amp;gt;"></div> However, RBI’s battle against inflation is not over yet – in fact, Das said that the MPC will step in if the need arises. “The war against inflation will continue until we see a durable decline in inflation, closer to the target. The MPC will not hesitate to take further action as may be required in its future meetings,” Das said. He also noted that the core inflation is still ‘rigid’, further reinforcing the fact that the inflation battle will be “gradual and protracted”. One of the factors which could spoil RBI’s inflation projections is the threat of El Niño, which could adversely impact farm output. Earlier, the Finance Ministry had also flagged its concerns amidst an IMD prediction of above-normal temperatures in India this year. “An El Nino this year will negatively impact kharif sowing and next year’s rabi sowing due to lower availability of water,” said JM Financial. On the whole, while making marginal revisions in its GDP and inflation outlook, Das said he is confident that the MPC is on the right track and is maintaining an agile stance to ensure the financial system’s stability, recalling Kautilya’s (also known as Chanakya) advice: “Be not slack before the whole job is finished”. The first MPC meet of FY24 has set a positive tone on both the critical fronts of growth and inflation. It remains to be seen if it is on the right track or if a course correction is required down the path. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/rbis-monetary-policy-committee-keeps-repo-rate-unchanged-at-6-5/articleshow/99284354.cms">RBI’s Monetary Policy Committee keeps repo rate unchanged at 6.5%, for now</a> <a href="https://www.businessinsider.in/stock-market/news/after-the-ides-of-march-analysts-pick-best-stocks-that-can-be-bought-on-dips/articleshow/99272438.cms">After the Ides of March, analysts pick best stocks that can be bought on dips</a> <a href="https://www.businessinsider.in/finance/news/-jio-financial-services-demerger-and-listing-a-key-moment-for-reliance-stock/articleshow/99264110.cms">Jio Financial Services demerger and listing a ‘key moment’ for Reliance stock</a>

RBI revises India’s FY24 growth outlook, expects softer inflation on the back of lower commodity prices

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, Dec 5 () Rate-sensitive bank and auto stocks fell on Thursday while realty companies largely depicted a mixed trend after the Reserve Bank surprised with its decision to hold key policy rates.
Among bank stocks, IndusInd Bank fell 2.21 per cent, RBL Bank 1.95 per cent, SBI 1.65 per cent, Yes Bank 1.51 per cent, Axis Bank 1.39 per cent, Federal Bank 1.25 per cent, HDFC Bank 0.50 per cent, Kotak Mahindra Bank 0.46 per cent and ICICI Bank 0.27 per cent on the BSE.
The BSE Bank index closed at 36,147.31, down 0.76 per cent.
The Reserve Bank on Thursday unexpectedly hit a pause button on cutting interest rate as it gave more importance to prevailing inflation pressure and rising food prices over a worrying slowdown in the economy.
After five consecutive cuts in interest rates this year, the Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, unanimously voted to hold the key repo rate at 5.15 per cent and reverse repo rate at 4.90 per cent.
Among auto companies, Tata Motors skidded 1.95 per cent, Hero MotoCorp 1.76 per cent, Ashok Leyland 1.42 per cent, Motherson Sumi Systems 1.17 per cent, Maruti Suzuki India 0.99 per cent, Bajaj Auto 0.71 per cent, M&amp;M 0.37 per cent and TVS Motor Company 0.08 per cent.
 Tracking weakness in these scrips, the BSE auto index settled 0.64 per cent lower at 17,810.17.
 "RBI's decision to keep policy rates unchanged was a surprise, especially after indicating in the last policy that growth was a bigger concern and reducing the FY 2020 GDP growth estimate to 5 per cent," said Suvodeep Rakshit, Vice President &amp; Sr Economist, Kotak Institutional Equities. 
 Realty index was mixed at the closing bell. Shares of Phoenix Mills fell 2.64 per cent, Sunteck Realty 1.70 per cent, Mahindra Lifespace Developers 1.59 per cent, Godrej Properties 0.19 per cent, Indiabulls Real Estate 0.16 per cent and Prestige Estates Projects 0.09 per cent.
 In contrast, Oberoi Realty gained 2.75 per cent, Sobha 0.59 per cent, Omaxe 0.42 per cent and DLF 0.39 per cent.
 The realty index closed at 2,198.50, up 0.20 per cent.
 HDFC Securities MD &amp; CEO Dhiraj Relli said, "Though the stock market participants could be disappointed by the no-repo-rate-cut action, we think that the participants are mature enough to understand the prudence of the Central Bank which means that the markets may not react downwards sharply due to this disappointment."
In the broader market, the 30-share BSE gauge Sensex was lower by 70.70 points or 0.17 per cent to close at 40,779.59. 
"It was an unexpected move with the RBI keeping the repo rate unchanged at 5.15 per cent, as the market expected 25 bps (basis points) cut in repo rate," Deepthi Mary Mathew, Economist at Geojit Financial Services said.
"Given the growth-inflation dynamics, we still sense that RBI will deliver a rate cut of 25bps in February policy meeting given the widespread deceleration in the economy," Amar Ambani, Head of Research - Institutional Equities, YES Securities said. SUM


 
 
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