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Mumbai, A Reserve Bank Bulletin on Thursday said retail inflation has moderated due to monetary policy action and supply side interventions, but "we are not out of the woods yet and have miles to go". An article on the state of the economy in the November Bulletin also noted that the global economy is showing signs of slowing down in the ongoing quarter as manufacturing languishes while services sector activity appears to have reached the end of its post-pandemic expansion. Going forward, it said tightening financial conditions is a significant risk to the global outlook. "In India, the momentum of the change in GDP is sequentially expected to be higher in Q3, 2023-24, with festival demand remaining ebullient," the article authored by a team lead by RBI Deputy Governor <keyword id="4207560" type="General" weightage="50" keywordseo="michael-debabrata-patra" source="Orion">Michael Debabrata Patra</keyword> said. The authors said investment demand appears to be resilient with the government's infrastructure spending, an uptick in private capex, automation, digitalisation, and indigenisation providing a boost. Referring to the headline inflation based on Consumer Price Index (CPI), the article said a combination of monetary policy action and supply side interventions guided inflation down from the high reaches to which it had climbed through the first seven months of 2022-23. In fact, November 2022 was the first month when headline inflation dropped back into the RBI's tolerance band of 2-6 per cent in the whole calendar year. "We are not out of the woods yet and have miles to go, but readings of around 5 per cent and 4.9 per cent in September and October, respectively, are a welcome relief from the average of 6.7 per cent in 2022-23 and 7.1 per cent in July-August 2023," it said. The RBI, however, said the views expressed in the article are of the authors and do not represent the views of the central bank. The article further said India's external sector has remained viable, with a modest Current Account Deficit (CAD) financed by resilient capital flows, one of the least volatile currencies in the world and a healthy level of foreign exchange reserves. The momentum of growth has picked up, taking GDP well above pre-pandemic levels to becoming the fifth largest economy in the world at market exchange rates, it added. "Steadfast policy initiatives are showing results, with the financial sector exhibiting soundness and supporting the credit needs of a resurgent economy," it said. The 37th edition of the <keyword id="19517645" type="General" weightage="50" keywordseo="state-of-the-economy-article-marks" source="Orion">State of the Economy article marks</keyword> the third year of its revival after a long hiatus of 25 years.

Not out of the woods yet and have miles to go: RBI on inflation

Mumbai, The <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> on Friday announced doubling the lending limits for <keyword id="185013" type="General" weightage="20" keywordseo="gold-loans" source="Orion">gold loans</keyword> under the bullet repayment scheme for <keyword id="117575" type="General" weightage="50" keywordseo="urban-cooperative-banks" source="Orion">urban cooperative banks</keyword> to Rs 4 lakh. "It has been decided to increase the existing limit for gold loans under the bullet repayment scheme from Rs 2 lakh to Rs 4 lakh in respect of Urban Cooperative Banks (UCBs) who have met the overall target and sub-targets under the Priority Sector Lending (PSL) as on March 31, 2023," <keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword> Governor <keyword id="6359111" type="General" weightage="50" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword> said. A bullet repayment scheme is one where a borrower repays interest and the principal amount at the end of a loan tenure without worrying about repayment during the loan tenure. Das, who had a meeting with top brass of UCBs recently, said the measure is in line with the RBI's earlier announcement of providing "suitable incentives" to UCBs that have met the prescribed PSL targets, wherein a lender is mandated to devote a certain part of its overall lending for the marginalised sector. Speaking after announcing the bi-monthly policy review, Das also announced that the RBI will be issuing a comprehensive regulatory framework on project finance. "With a view to strengthen the extant regulatory framework governing project finance and to harmonise the instructions across all regulated entities, the extant prudential norms for projects under implementation have been reviewed," he said, adding that detailed draft guidelines will be released for public comments. He also announced that non-bank lenders in the 'middle and base layers' will be permitted to use Credit Risk Mitigation instruments for reducing their counter party exposure under the credit concentration norms, just like their peers classified in the 'upper layer' are allowed to right now. The RBI is also mulling introducing Card-on-File Tokenisation (CoFT) creation facilities directly at the issuer bank level, given the growing acceptance and benefits of tokenisation of card data, Das said, adding that this will help make e-commerce transactions more convenient.

RBI doubles bullet repayment gold loan limits for urban co-op banks to Rs 4 lakh

<ul><li>The Reserve Bank of India hit pause on all loan repayments last week, which includes payment of credit card bills.</li><li>However, there are a lot of unanswered questions about how banks will implement these measures on the ground.</li><li>The Indian <keyword id="3845750" type="PERSON" weightage="20" keywordseo="banks-association">Banks Association</keyword> answers all of these questions like what do if the banks calls you to ask for payments or if your loan is included in the relief package offerered by the RBI.</li></ul> The Reserve Bank of India (RBI) announced a <a href="https://www.businessinsider.in/finance/news/home-loans-education-loans-and-business-loan-interest-payments-deferred-for-three-months-by-rbi/articleshow/74841767.cms">three-month moratorium</a> on all term loans which had payments due as on March 1. This includes education loans, housing loans and even credit card bills. However, there are a lot of questions around how banks will implement these measures on the ground. A statement by the Indian Banks Association, answers all the frequently asked questions that you may have about RBI’s new measures. QUESTION 1 Why has RBI announced the relief package? ANSWER: Reserve Bank of India has announced certain regulatory measures to reduce the burden of debt and make sure that businesses survive the impact of Coronavirus on India’s economy. It was felt that there may be a temporary disruption in the cash flows, and in some cases loss of income, for the businesses and individuals. QUESTION 2 Which are the facilities eligible for availing benefits under the RBI COVID-19 regulatory package and whether the facility is extended across the board to all borrowers? ANSWER: All term loans (including agricultural term loans, retail, crop loans and loans under Pool Purchases) and cash credit/overdraft are eligible to avail the benefits under the package. This is available to all such accounts, which are standard assets as on 1st March 2020. Further, to avoid unnecessary paperwork the facility has been extended across the board to all the borrowers by extending repayment of term loan installments (includes interest) by 90 days. The original repayment period for term loans will get extended by 90 days e.g. a loan repayable in 60 installments maturing on 1st March 2025 will mature on 1st June 2025. QUESTION 3 Is rescheduling of payments applicable for all kinds of term loans? ANSWER: It is applicable for all term loans in all the segments, irrespective of the segment and the tenor of the term loans. QUESTION 4 Is rescheduling of term loans only for principal amount or it also includes interest? ANSWER: Rescheduling of principal can be done for a period of three months falling due between March 1, 2020 and May 31, 2020. For example, where the last installment of a term loan falls due for payment on say 1st March 2020, it will become payable on 1st June 2020. For EMI based term loans, there will be three EMIs falling due between 1st March 2020 and May 31st, 2020 and the tenor will be extended by three months and have to be repaid during the extended period, as per the example under (2) above. For other term loans, it will be all the installments and Interest falling due during the same period, irrespective of the tenor of payment i.e. monthly, quarterly, half yearly, annually, bullet payment etc. For term loans, where the repayment has not commenced, the interest portion for three months alone needs to be reckoned. QUESTION 5 What happens if the extended tenor of term loan goes beyond the maximum period stipulated for a product or as stipulated in the loan policy? ANSWER: This can be extended for all such term loans without the need for seeking deviations or approvals. QUESTION 6 What will be the treatment of interest on the working capital facilities? ANSWER: The recovery of Interest applied to cash credit/overdraft on 31st March, 30th April and 31st May 2020 is being ‘deferred’. However, the entire interest must be recovered along with the interest being applied on 30th June 2020 and in cases, where monthly interest is not being applied, along with the next interest date. QUESTION 7 What will be the impact of this relief by RBI on borrowers as far as reporting of default is concerned? ANSWER: Any delay in payment leads to default and gets reported to Credit Bureaus. For business loans of ₹5 crore and above, the banks report the overdue position to RBI also through CRILC. As a result of this relief package, the overdue payments post 1st March 2020 will not be reported to Credit Bureaus/ CRILC for three months. No penal interest or charges will be payable to the banks. Similarly, SEBI has allowed that Credit Rating Agencies (CRAs) may not consider the delay as default by listed companies if the same is owing to lockdown conditions arising due to COVID-19. QUESTION 8 That means businesses/ Individuals should necessarily take the benefit? ANSWER: You may take the benefits under this package if there is a disruption in your cash flows or there is loss of income. However, you must take into account that the interest on the loans, though not mandatorily payable immediately and gets postponed by 3 months, continues to accrue on your account and results in higher cost. To give you a perspective, suppose your loan outstanding is ₹100,000 and you are charged 12 percent rate of interest on your loans, then every month you are liable to pay ₹1,000 as interest. In case you opt not to service the interest every month, you are liable to pay interest at 12 percent per annum and accordingly you will pay ₹3,030.10 at the end of 3rd month. Similarly, in case the interest rate is 10 percent, you are required to pay ₹ 833 per month or ₹2,521 after three months. QUESTION 9 Should I get upset if any bank staff or its collection agent approach me for repayment? ANSWER You should not get upset. Tell bank staff/ collection agent that you want to avail the benefit being extended under the regulatory package. QUESTION 10 What about my credit card dues? ANSWER: The relief is available for credit card payments also. In case of credit card dues, there is a requirement to pay a minimum amount and if it is not paid the same gets reported to Credit Bureaus. In view of the RBI circular, the overdues in the credit card account do not get reported to the credit bureaus for a period of three months. However, interest will be charged by the credit card issuer on an unpaid amount. You should check from your card provider to arrive at interest payable. Although no penal interest will be charged during this period, but you must remember that the interest rate on credit card dues are normally much higher compared to normal bank credit and you should take a decision accordingly. QUESTION 11 What about interchangeability being permitted from non-fund based to fund based or FB to NFB for businesses? ANSWER: The interest applied on the fund based portion of interchangeability availed during the said period of 1st March to 31st May 2020 will be eligible for moratorium. In respect of new sanctions accorded from 1st March and availed during the period, the interest applied on the Fund based portion would be eligible. QUESTION 12 In what other ways, businesses have been given relief? ANSWER: The businesses may request the bank to reassess their working capital requirements on account of disruption of their cash flows or elongation of working capital cycle. They may also request for reduction in margin on NFB facilities (LCs/ BGs etc) or also relief in Security. Decisions will be taken by the bank branches on a case-to-case basis based on the genuineness of the request. QUESTION 13 Are NBFCs/MFIs/HFCs eligible under the “easing of working capital financing”? ANSWER: At present, they are not being considered under the scheme. However, RBI has made provision for sufficient liquidity support to these financial intermediaries under recently introduced Targeted Longer-term Refinancing Operations i.e. TLTRO. Liquidity availed under the scheme by Banks has to be deployed in investment grade corporate bonds, commercial paper, and non-convertible debentures over and above the outstanding level of their investments in these bonds as on March 27, 2020. Banks shall be required to acquire up to fifty per cent of their incremental holdings of eligible instruments from primary market issuances and the remaining fifty per cent from the secondary market, including from mutual funds and non-banking finance companies. Investments made by banks under this facility will be classified as held to maturity (HTM) even in excess of 25% of total investment permitted to be included in the HTM portfolio. Exposures under this facility will also not be reckoned under the large exposure framework. Banks will be able to support NBFCs/ MFIs/ HFCs etc. under this window and we do not foresee liquidity squeeze for these Financial Intermediaries. QUESTION 14 Will all these measures of RBI be treated as “restructuring”? What about the provisions applicable? ANSWER: The measures stipulated by RBI under the March 27, 2020 circular on COVID-19 Regulatory Package will not be treated as “restructuring” and hence will not result in asset classification downgrade. Accordingly, the enhanced provisions for Restructured Accounts will not apply. QUESTION 15 What about installments/EMIs being recovered through SI/ECS/NACH? What will be the procedure for refund of the installment/EMIs, if demanded by the borrower? ANSWER: Please get in touch with your bank for the revised mandate. See also: <a href="https://www.businessinsider.in/finance/news/home-loans-education-loans-and-business-loan-interest-payments-deferred-for-three-months-by-rbi/articleshow/74841767.cms">No EMI payments for home, car, and corporate and other loans for 3 months says RBI</a> <a href="https://www.businessinsider.in/business/news/covid-19-banks-sensitise-branches-on-emi-moratorium-other-rbi-relief-measures/articleshow/74912484.cms">Covid-19: Banks sensitise branches on EMI moratorium, other RBI relief measures</a> <a href="https://www.businessinsider.in/business/news/retailers-seek-rbi-intervention-as-banks-unwilling-to-extend-debt-moratorium-to-borrowers/articleshow/74917194.cms">Retailers seek RBI intervention as banks unwilling to extend debt moratorium to borrowers</a>

FAQs about RBI’s three-month deferment on EMIs answered by the Indian Banks Association

<ul><li><keyword id="11320380" type="UNKNOWN" weightage="20" keywordseo="central-banks-in-europe">Central banks in Europe</keyword>, US, China, India and more have been working on Central Bank <keyword id="3144636" type="PERSON" weightage="20" keywordseo="digital-currencies">Digital Currencies</keyword> (CBDCs).</li><li>Facebook’s Diem moved to the US recently, to issue a Stablecoin backed by the US Dollar.</li><li>China is already testing a digital version of the Yuan.</li></ul>A lot has been said about <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">cryptocurrency</a> prices recently, especially with regulations in China stirring up prices over the past week. While governments around the world have been resistant to accepting cryptocurrencies as legitimate payment systems, they aren’t opposed to the underlying blockchain technologies that run all of these currencies. Enter Central Bank Digital Currencies (CBDCs). What are CBDCs? Simply put, CBDCs are digital versions of the currencies you use right now. In the US, a CBDC would be a digital dollar, in India it’s a digital rupee, China has already started testing a digital Yuan, and so on. As the end-user, using a CBDC won't be the same as making digital payments right now, because the real change lies in the background. Essentially, a CBDC is a digital version of a fiat currency that’s run using a private blockchain system. That’s the first big difference between CBDCs and <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">cryptocurrencies</a> — the private blockchain. Almost every cryptocurrency you see today runs on a public blockchain, meaning they’re maintained by users and miners worldwide. Private blockchains are controlled by one organisation, which in this case will be central banks. In the case of a CBDC, a central bank can issue and track the whole lifecycle of a country’s currency digitally. It essentially eliminates the need for printing paper money. If you’re thinking of the game Watch Dogs right now, you’re on the right track. CBDCs can be issued digitally by the central bank, and since they are essentially just pieces of code, their flow will be trackable right from their creation. CBDCs have great importance in the future, with respect to environmental concerns, <a href="https://www.livemint.com/news/india/digital-rupee-rollout-may-help-curb-bank-frauds-11615559728445.html">curbing bank frauds</a> and more. They are also Stablecoins, meaning their value remains stable and doesn’t fluctuate the way cryptocurrencies do. They are backed by federal banks, instead of consumer sentiments. They also give the government great powers of surveillance. CBDCs are not cryptocurrencies Despite the brouhaha around CBDCs though, what many industry experts say is that CBDCs aren’t cryptocurrencies. This is because they are designed to be trackable and do not allow anonymity. This is against some of the fundamental principles of cryptocurrencies. Even more importantly, the fact that a central bank controls them means there’s no public control on these currencies, another central element of almost every cryptocurrency. Unlike Bitcoin or Ethereum, you can’t create a CBDC by mining. Only the concerned bank can issue it. Which countries have been considering CBDCs? The US Federal Bank has been considering a digital dollar for quite a few years now. In fact, according to a <a href="https://edition.cnn.com/2021/05/24/economy/fed-digital-dollar-lael-brainard/index.html">report</a> by CNN, Lael Brainard, a member of the Federal Reserve Board of Governors, even argued a case for the digital dollar yesterday. The US Fed was amongst the first to consider the creation of a CBDC. Industry watchers have also said that Facebook’s Diem, which was originally called Libra, will become the blueprint for the US CBDC. The company <a href="https://www.businessinsider.in/cryptocurrency/news/what-you-need-to-know-about-facebooks-diem-cryptocurrency/articleshow/82629281.cms">recently gave up</a> its Swiss Bank license in order to shift operations to the US. But if there’s a leader in the CBDC space right now, that’s China. As mentioned before, the country has already started testing a digital Yuan. “In order to protect our currency sovereignty and legal currency status, we have to plan ahead,” said Mu Changchun, deputy director of the People’s Bank of China <a href="https://www.wsj.com/articles/china-creates-its-own-digital-currency-a-first-for-major-economy-11617634118">told</a> the Wall Street Journal in April. US and China aside, the European Central Bank (ECB) had also published a report on the issuance of a digital Euro in October last year. “A digital euro would be an electronic form of central bank money accessible to all citizens and firms – like banknotes, but in a digital form – to make their daily payments in a fast, easy and secure way. It would complement cash, not replace it. The Eurosystem will continue to issue cash in any case,” the ECB <a href="https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr201002~f90bfc94a8.en.html">noted</a>. The Reserve Bank of India <a href="https://www.livemint.com/news/india/here-s-how-rbi-is-thinking-about-its-own-blockchain-platform-11616957018547.html">has been considering</a> CBDCs since as early as 2017 as well. The bank mentioned the creation of a digital rupee early this year, and the same was also expected to be taken up in the Budget session of the Parliament this year. The RBI-issued digital currency is expected to reduce the job of intermediaries when it comes to settling payments, and give the central bank tighter control over the country’s growing concern around bank frauds. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/chia-network-the-company-behind-chiacoin-raises-61-million-at-a-500-million-valuation/articleshow/82943173.cms">Chia Network, the company behind Chiacoin, raises $61 million at a $500 million valuation</a> <a href="https://www.businessinsider.in/tech/apps/news/whatsapp-says-it-will-wait-for-the-indian-government-to-pass-the-personal-data-protection-law-before-limiting-features/articleshow/82931362.cms">WhatsApp says it will wait for the Indian government to pass the Personal Data Protection law before limiting features</a> <a href="https://www.businessinsider.in/science/health/news/what-is-black-white-and-yellow-fungus-symptoms-and-prevention/articleshow/82938920.cms">Black, white and yellow fungi — all you need to know about symptoms and prevention</a>

US, China, Europe and India — all are mulling the possibility of a digital currency, but no one is ready to bite the bullet, yet

New Delhi, Mar 31 () Banks have started sensitising their branches about three months' moratorium on all term loans, including home, auto and crop loans, to help customers in overcoming financial difficulties due to the coronavirus outbreak and subsequent nation-wide lockdown.Several banks on Tuesday said they have informed and provided their branches with the detailed guidelines on various schemes announced by the RBI recently and customers are being sent messages individually on their registered mobile number about the EMI payment.Union Bank of India Managing Director Rajkiran Rai G told that branches have been informed about with respect to moratorium on all term loans."In case of those who have opted for ECS route for EMI deduction, customers are given the option of availing the facility by informing the branch concerned through mail or other digital medium," he said.Banks on its own unilaterally cannot stop ECS payment due to legal issue but the customer has the option of requesting bank to stop it, Rai said.He further said the customers whose income has not been impacted are encouraged to continue payment as per the scheduled."As per COVID 19 regulatory package of RBI, Indian Bank allows a moratorium by deferring payment of EMI/ Term Loan Instalments &amp; Interest/ Interest on Working Capital for 3 months w.e.f 1st March 2020," a tweet issued by the banks said.Another public sector lender PNB said it presents relief scheme for its customers. "In view of COVID-19, it has been decided to defer payment of all installments on term loan and recovery of interest on cash credit facilities falling due between March 01,2020 and May 31 2020."Canara Bank tweeted, "In terms of Covid 19 - RBI package, borrowers are eligible for moratorium/ deferment of installments/EMI for Term loans falling due from 01.03.2020 to 31.05.2020 &amp; repayment period gets extended accordingly. SMS also has been sent to customers to avail the same." With banks clarifying their positions on EMI moratorium, it will help clear doubts of customers who were confused after getting payment reminders from lenders.Last Friday, the RBI had announced that all term loans, including retail and crop loans and working capital payments, will be covered by the three-month moratorium. Banks will now have discretion in deciding the limits on working capital, with RBI saying that no payment miss should be considered a default and reported to credit information companies."The repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period. Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period," the RBI said.Deferred instalments under the moratorium will include principal and/or interest components, bullet repayments, EMIs, credit card dues, it said."Lending institutions shall frame board-approved policies for providing the above mentioned reliefs to all eligible borrowers. Wherever the exposure of a lending institution to a borrower is Rs 5 crore or above as on March 1, 2020, the bank shall develop an MIS on the reliefs provided to its borrowers which shall inter alia include borrower-wise and credit-facility wise information regarding the nature and amount of relief granted," it said.Following the announcement, the banks just had one working day to finalise the details and issue instructions to branches, a senior official of another public sector bank said.As soon as finer points on implementation of moratorium came from the Reserve Bank, the official said, board approval was sought as per the direction of the central bank and necessary instructions have been issued to staff regarding their implementation.Yesterday, the Agriculture Ministry said that farmers will continue to get short-term loan of up to Rs 3 lakh at a subsidised interest rate of 7 per cent, and prompt repayers will get it at four per cent as the government extended the subsidy to banks till May 31.The decision, which are implemented through banks, comes as many farmers are not being able to go to banks for payment of their loan dues on account of restrictions imposed due to the lockdown.Besides, FAQ are expected to be issued by Indian Banks Association on the various measures announced by the Reserve Bank to the benefit of customers. DP MKJ

Covid-19: Banks sensitise branches on EMI moratorium, other RBI relief measures

Mumbai, Mar 11 () Amidst calls for the Reserve Bank to cut policy rates to boost growth in the wake of the coronavirus outbreak, SBI economists doubted the efficacy of rate cuts in invigorating demand, saying a better tool can be reducing indirect taxes which can automatically lift consumer sentiment. "Though the RBI is likely to bite the bullet to cut the rates to stimulate demand at next policy review, it is unlikely to result in any material impact on invigorating demand... but a combination of a larger rate cut and/or indirect tax rate cut can be better policy options," SBI Research said in a note on Wednesday. Their view was based on the analysis of credit data of top six banks, constituting three public sector banks and three private sector banks which constitute 52 per cent of total bank credit as of March 2019. Both private and public sector banks are seeing robust growth in retail segment at 15.7 per cent and 12.8 per cent, respectively. In case of top eight state-run banks, corporate credit declined by Rs 81,535 crore between December 2018 and December 2019, while during the same period the top three private banks' corporate pie grew by Rs 1.04 lakh crore. It said a rate cut is unlikely to work in isolation as bank transmission of RBI's rate cut has been slow. While RBI cut the rates by 135 bps to 5.15 per cent between February and October 2019, the transmission in the 1-year median MCLR till February 20 was only 59 bps. But for corporates, fresh rupee loan rates came down by 45 bps till January, while the same on outstanding rupee loans decreased by 11 bps. With the pace of deposit rate cuts picking pace (SBI cut rates again on Wednesday), transmission can be faster. Most banks, including private are now cutting aggressively. The spread between the term deposit rates and savings rate limits the scope, however, of increased cuts in term deposits rate. Had the government followed the formulas strictly, rates on different small savings instruments would now have been lower by 80-160 bps. In FY19, the incremental small saving deposits were 24 per cent of incremental bank deposits. If deposit rates are cut further, this can lead to clamour for withdrawals and exacerbate the situation, it warned. With the financial savings rate already not very high and the negativity around deposits, the tax concessions that the budget has proposed to eliminate might also add fuel to the fire. Already retail investors have gone searching for better returns and have burnt their fingers, the report added. BEN ABMABM

SBI says tax cuts, and not rate cuts, can lift consumption

The Indian currency was in a bad shape when <a href="http://www.businessinsider.in/searchresult.cms?query=Raghuram+Rajan+">Raghuram Rajan</a> had assumed office as the <a href="http://www.businessinsider.in/searchresult.cms?query=rbi">Resrve Bank of India (RBI</a>) governor two years ago. However, with extreme determination and key reforms, he nursed the currency back to health. And now, when the global economy is once again in a mess, Rajan is still assuring investors in the country that there is no need to panic yet. 
 
The macroeconomic fundamentals having gone an all-round improvement, rupee is now bullet-proof against the tension of weak financial markets. 
 
Ahead of his departure for the Annual Global Economists Conclave at Jackson Hole in the US, Rajan told the press, "There is confidence that we are actually quite healthy. Last time you did not have the confidence that is the big difference this time. We know this will pass and at some point the market will wake up and at that point start differentiating." 
 
India has ranked among the best-performing markets, even when Lehman Brothers collapsed in 2008 creating a bad state for economy across the world. Investors favour India since it has avoided the mistakes of other central banks that kept interest rates low to stimulate growth, and a government that is more <a href="http://www.businessinsider.in/searchresult.cms?query=crisis">prudent with its finances</a>. 
 
“I don't think we are in panic mode by any stretch of imagination. We are in vigilant mode. But I think there is a general sense that we are in a much better situation than we were in 2013," said Rajan. 
 
India's current account deficit, which peaked at 4.7% of gross domestic product (GDP) in FY13, narrowed to 1.3% of GDP in FY15. 
 
Inflation as measured by <a href="http://www.businessinsider.in/searchresult.cms?query=consumer+price+index">the consumer price index</a>, which was running at an average of more than 9%, slowed to 3.8% in July. Foreign exchange reserves are at a record high of $354.4 billion. 
 
But Rajan, who had warned of an impending financial crisis in 2005, said the panic should soon subside. "Markets turn panicky only for limited periods of time," said Rajan. "Even in the worst environment of the last 50-60 years, during the 2008 crisis, it was a few months after which it turned normal. I have no doubt that we have enough ammunition, reserves, good policies to withstand that," he added.

You Searched For "rbi bullet" and got 8 results

Not out of the woods yet and have miles to go: RBI on inflation

PTI

RBI doubles bullet repayment gold loan limits for urban co-op banks to Rs 4 lakh

PTI

FAQs about RBI’s three-month deferment on EMIs answered by the Indian Banks Association

BI India Bureau

US, China, Europe and India — all are mulling the possibility of a digital currency, but no one is ready to bite the bullet, yet

BI India Bureau

Covid-19: Banks sensitise branches on EMI moratorium, other RBI relief measures

PTI

SBI says tax cuts, and not rate cuts, can lift consumption

PTI

Raghuram Rajan assures that rupee is bulletproof and there is nothing to worry about

BI India Bureau

The new CEO behind Burger King, Popeyes, and Tim Hortons reveals his plans for the future of the chains

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You Searched For "rbi bullet" and got 8 results

Not out of the woods yet and have miles to go: RBI on inflation

PTI

RBI doubles bullet repayment gold loan limits for urban co-op banks to Rs 4 lakh

PTI

FAQs about RBI’s three-month deferment on EMIs answered by the Indian Banks Association

BI India Bureau

US, China, Europe and India — all are mulling the possibility of a digital currency, but no one is ready to bite the bullet, yet

BI India Bureau

Covid-19: Banks sensitise branches on EMI moratorium, other RBI relief measures

PTI

SBI says tax cuts, and not rate cuts, can lift consumption

PTI

​Raghuram Rajan assures that rupee is bulletproof and there is nothing to worry about

BI India Bureau

The new CEO behind Burger King, Popeyes, and Tim Hortons reveals his plans for the future of the chains

Kate Taylor

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Raghuram Rajan assures that rupee is bulletproof and there is nothing to worry about