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<ul><li>Bank lending to NBFCs was growing at 24-25% y-o-y, whereas the rest of the system was growing at 12-14%. </li><li>Interconnectedness is building in the system and <keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword> moves intend to address that. </li><li>RBI governor said that its preemptive measures are intended to proactively take action before the bubble bursts.</li></ul>India’s central bank intends to cut down consumption led-loans given out by banks and shadow banks. Reserve Bank of India’s deputy governor <keyword id="10055827" type="General" weightage="50" keywordseo="swaminathan-janakiraman" source="Orion">Swaminathan Janakiraman</keyword> said that its intention behind increased risk weightage on unsecured loans is to cut down growth of loans which do not have a clearly defined end use. Some segments’ growth within NBFCs are outliers, and the measures taken are to address that. <keyword id="162353" type="General" weightage="80" keywordseo="swaminathan" source="Orion">Swaminathan</keyword> insists that per se, small ticket loans are no risk to the system. “The loans in the under ₹50,000 segments is less than half a percent of total outstanding. They may be dealing with a lot of people, it’s a segment that cannot pose a great risk to the system,” he said while speaking at the post-monetary policy press conference on Friday. Last month, RBI asked banks and non-banking financial institutions (NBFCs) to provide more for unsecured loans, under which personal loans are covered. This measure also addresses interconnectedness building in the system where banks are lending to NBFCs. Bank lending to NBFCs was growing at 24-25% y-o-y, whereas the rest of the system was growing at 12-14%. “Bank lending to NBFCs had to be re-caliberated. The idea is not to deny liquidity or ration the lending,” said Swaminathan. He also added that the business models of some of these institutions will be re-caliberated along with their growth numbers. “Risk measure protection and underwriting practices are getting better. It’s too early to comment on the effect it has had. Governance and effectiveness of assurance functions is top of our priority. You will hear more from us on that,” said the deputy governor. <cmsannotation type="cmsannotation" annotationid="To take action before bubble bursts" comment="subhead" text="To take action before bubble bursts">To take action before bubble bursts</cmsannotation> The RBI governor <keyword id="6359111" type="General" weightage="50" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword> also insisted that this move is a preemptive measure to address potential risks. “We don’t wait for the house to catch fire and then act. Our effort is to proactively take action before the bubble bursts,” Das said in his speech. Apart from keeping policy rates unchanged, the RBI’s rate-setting panel also remained focussed on withdrawal of accommodation. It has also kept its projections on inflation for FY24 unchanged at 5.4%, and also warned that the November print of inflation might come in higher. Inflation management cannot be on auto-pilot even as the future is expected to be clouded by uncertain food prices. But Das also said that summer of 2022 is behind us. The RBI also increased its GDP growth projection for FY24 to 7% from 6.5% earlier. “There is growing international confidence in the Indian economy, as we speak to other central bank governors and some large investors. There is confidence from the point of view of investment, quality of Indian products and its service exports,” Das said at the conference. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/rbi-expects-indias-gdp-to-grow-at-7-in-fy24-keeps-repo-rate-unchanged/articleshow/105828012.cms">RBI expects India’s GDP to grow at 7% in FY24; keeps repo rate unchanged</a> <a href="https://www.businessinsider.in/finance/news/rbi-hikes-upi-transaction-limit-for-education-and-healthcare/articleshow/105832824.cms">UPI transaction limit for education and healthcare hiked to ₹5 lakh per day</a>

We’d like to curtail consumption-led loans with no clear end use: RBI Dy Governor

<ul><li><keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>’s MPC keeps <keyword id="6371181" type="General" weightage="20" keywordseo="interest-rates" source="Orion">interest rates</keyword> unchanged in the first policy of FY25.</li><li>Most experts had expected the RBI to maintain the status quo on interest rates.</li><li>A few, however, expected it to soften its hawkish forward guidance. </li></ul>The Indian central bank’s rate-setting panel, the <keyword id="6357126" type="General" weightage="20" keywordseo="monetary-policy" source="Orion">Monetary Policy</keyword> Committee (MPC), kept the repo rate unchanged at 6.5% on Friday. It remained focused on the withdrawal of accommodation in the first monetary policy of FY25. Both these decisions were taken with a majority of five to one. “Two years ago, around this time, when CPI inflation had peaked at 7.8% in April 2022, the elephant in the room was inflation. The elephant has now gone out for a walk and appears to be returning to the forest. We would like the elephant to return to the forest and remain there on a durable basis,” said Shaktikanta Das, governor of the Reserve Bank of India. The second advance estimate (SAE) placed real GDP growth at 7.6% for the recently concluded FY24 — the third successive year of 7 per cent or higher growth. RBI projects FY25’s real GDP growth at 7%. “Robust growth prospects provide the policy space to remain focused on inflation and ensure its descent to the target of 4%. Under these circumstances, monetary policy must continue to be actively disinflationary to ensure anchoring of inflation expectations and fuller transmission of the past actions,” said Shaktikanta Das, governor of the Reserve Bank of India. His speech pointed out that uncertainties in food prices continue to pose challenges especially as temperatures are expected to be above normal. The MPC remains vigilant to the upside risks to inflation that might derail the path of disinflation. “Elephant moves slowly, and last mile inflation tends to be sticky,” said Das at the RBI press conference. RBI sees FY25’s consumer price inflation (CPI) inflation, assuming a normal monsoon, at 4.5%. The RBI had repeatedly insisted that it intends to bring down retail inflation below 4%. “It is essential, in the best interest of the economy, that CPI inflation continues to moderate and aligns with the target on a durable basis. Till this is achieved, our task remains unfinished,” said Das pointing to frequent incidences of supply chain shocks. He also added that the crude oil price movements in the last few days. GDP growth &amp; inflation projections by RBI for FY25 <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Time period </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Real GDP growth </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">CPI inflation </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY25 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q1 FY25 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.1% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.9% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q2 FY25 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.9% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3.8% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q3 FY25 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.6% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q4 FY25 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.5% </td></tr></tbody><tbody></tbody></table> Hot inflation keeping RBI in wait-and-watch mode say economists This is the seventh consecutive policy review cycle where the MPC has chosen to keep the repo rate unchanged at 6.5%. Most experts have been expecting the RBI to maintain the status quo. Its current decision, most say, is a balanced approach towards growth while being vigilant over headline inflation. “This careful stance reflects concerns over potential inflationary pressures arising from volatile food prices, recent upticks in oil prices, and robust economic growth. While there was some anticipation of rate cuts by the end of 2024, the RBI seems inclined to adopt a wait-and-see approach before initiating a rate cut cycle,” says Sujan Hajra, chief economist &amp; executive director at Anand Rathi Shares and Stock Brokers. Volatile food inflation in the last few months has been worrying economists. The ongoing heatwave combined with the persistent El Niño impact brings back worries about cereal and pulse price hikes. While the wheat crop has by and large been harvested, vegetable prices also pose an additional worry. The Indian Meteorological Department (IMD) has predicted higher-than-normal maximum temperatures across the country this summer. While core inflation has been softening, in the last few days, crude oil prices have inched up to cross $90 per barrel. "The monetary policy stance announced today reflects that the RBI is evenly balancing the two divergent objectives of growth and inflation. It seems a case of full commitment to growth with an even higher commitment to inflation targets. I hope we will see sustained growth and softened inflation,” Anu Aggarwal, president &amp; head of corporate banking, Kotak Mahindra Bank. The RBI governor’s stance on bringing down inflation has made economists delay their rate cut expectations as far as Q3 of FY25. The Bank of Japan has recently ended its negative interest rate policy and the US Fed has also delayed its much anticipated easing cycle. Most economists believe that RBI policy is pegged to the Fed, especially in the last two years, even as it formally targeted inflation. “External dynamics have been fluid, implying that the policy prerogative needs to be flexible for ensuring financial stability. We maintain the RBI’s tone will slowly tiptoe to ‘Gracklish’ from the usual ‘Hawk-Dove’ signaling, implying a non-committal stance and limited definite forward guidance ahead,” said Madhavi Arora, lead economist, Emkay Global Financial Services.

We want the elephant of inflation to walk back to the forest: Shaktikanta Das

<ul><li>Unified regulatory framework on connected lending aims to strengthen pricing and management of credit by regulated entities.</li><li>Experts believe that this move is related to bank lending to NBFCs.</li><li><keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword> will also come up with a regulatory framework for web-aggregation of loan products. </li></ul> The Reserve Bank of India (RBI) said on Friday that it will come up with a unified regulatory framework on connected lending for the entities it regulates. This move is to strengthen the pricing and management of credit by regulated entities. “The extant guidelines on connected lending are limited in scope,” said Shaktikanta Das, governor of RBI said in his speech where he announced that the Monetary Policy Committee <a href="https://www.businessinsider.in/finance/news/rbi-expects-indias-gdp-to-grow-at-7-in-fy24-keeps-repo-rate-unchanged/articleshow/105828012.cms">has decided to keep repo rates unchanged</a>. RBI’s deputy governor Rajeshwar Rao clarified at the press conference that the regulations do not refer to interconnectedness. “Connected lending refers to persons who are in the position to control the decision of the lender,” he said, without giving any more details. Das said that it refers to cases where the director of a bank borrows from the same bank and can have some influence. It also refers to cases of related parties as well, he clarified. “It has nothing to do with interconnectedness,” Das said. The central bank has recently increased the risk weightage on unsecured loans given out by banks and NBFCs. “It’s a pre-emptive measure to address potential risks. We don’t wait for the house to catch fire and then act,” said Das. Neutrality and transparency to web-aggregators of loans The RBI also said it will lay down a regulatory framework for web-aggregation of loan products. Das said that he has noticed that such loan products are harming consumer interest and the framework is expected to result in enhanced customer centricity and transparency in digital lending. This move is a follow-up to the recommendations they received from the working group on digital lending norms, says Rabi Shankar, deputy governor of RBI. The Reserve Bank had introduced a regulatory framework for digital lending in August/September 2022. The digital lending ecosystem also comprises of services that aggregate loan offers from lenders (called web-aggregation of loan products) for guidance of customers. “Lenders on web platforms get their information from various sources and give weightage to customers. Sometimes they might miss something,” added Shankar. Das said that the move will bring neutrality, transparency and avoid mis-selling and also not influence the decision of the borrower. SEE ALSO <a href="https://www.businessinsider.in/stock-market/markets/news/nifty-scales-21000-as-stocks-rally-and-rbi-mpc-hikes-growth-forecast/articleshow/105829753.cms">Nifty scales Mount 21,000 as RBI hikes growth forecast</a> <a href="https://www.businessinsider.in/finance/news/rbi-expects-indias-gdp-to-grow-at-7-in-fy24-keeps-repo-rate-unchanged/articleshow/105828012.cms">RBI expects India’s GDP to grow at 7% in FY24; keeps repo rate unchanged</a>

RBI to come up with unified regulatory framework on connected lending

<ul><li>The <keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword> on Friday cut its economic growth estimate for fiscal year 2023 to 7% from 7.2% forecast earlier.</li><li>India’s central bank has lowered its growth estimates due to constant geopolitical tensions, monetary policy tightening across nations and elevated inflation.</li><li>Several rating agencies have also recently trimmed their annual growth rate projections after GDP growth rate fell short of expectations in the past quarters.</li></ul>The <keyword id="6354335" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (RBI) on Friday cut its economic growth estimate for fiscal year 2023 to 7% from 7.2% forecast earlier. While it expects GDP growth to drop to 4.6% in the third and fourth quarter, respectively, from the estimated 6.3% in the second quarter, the broad expectation is that economic activity will recover by the first quarter of the next fiscal year. India’s central bank has lowered its growth estimates on risks emanating from geopolitical tensions, monetary policy tightening across nations and elevated inflation. Global growth is expected to slow down from 6.1% in 2021 to 3.2% in 2022 as the outlook is “gloomy and more uncertain,” <keyword id="7268643" type="General" weightage="20" keywordseo="rbi-governor-shaktikanta-das" source="Orion">RBI Governor Shaktikanta Das</keyword> said in his speech on Friday. “Against this challenging global environment, economic activity in India remains stable. While real GDP growth in Q1:2022-23 turned out to be lower than our expectations, the late recovery in kharif sowing, the comfortable reservoir levels, improvement in capacity utilisation, buoyant bank credit expansion and government’s continued thrust on capital expenditure are expected to support aggregate demand and output in H2:2022-23,” Das said. Markets reacted positively to the 50-basis-point rate hike on Friday, as the outlook for India is relatively better than most developed economies, which are expected to slip into recession in the aftermath of the massive rate hike cycle undertaken earlier this year. India’s been battling several of these risks, but with capital outflows abating and prices of several commodities cooling, the risk to the external sector has abated. India’s import cover stands at nine months, from 20 months a year ago. There’s been much talk about India’s decoupling from the rest of the world, with many believing that India is an oasis in the midst of a global sand storm. While there’s no doubt that India has been hit by the fallout of the war and rate hikes undertaken by central banks across developed markets, economic activity remains stable. The positive commentary by the RBI Governor helped cheer markets despite the rate hike. Inflation in India has been lower than the double-digit spikes seen in many other developed countries. The fight against inflation may call for more rate hikes by the RBI, but robust demand could save the day for economic growth. With rainfall coming in higher than the long-period average across most parts of India, higher rural consumption could provide a kicker to economic growth this festive season. According to Nomura’s India economist and vice president, Aurodeep Nandi, “The relatively unchanged growth and inflation outlook by the RBI indicates that the policy arithmetic hasn’t materially changed for it.” While the Indian economy continues to battle the aftershocks of the pandemic, war in Ukraine and aggressive rate tightening cycle in most developed markets, the havoc is still not as bad as it has been for many other economies. Real economic growth in the April-June quarter of the current fiscal year was at 13.5% on a year-on-year basis, surpassing the pre-pandemic level by 3.8%. This growth has been driven by private consumption largely and investment demand. High frequency indicators also suggest that the second half of the fiscal should continue to be buoyant. Not just the RBI, but several rating agencies have also recently trimmed their annual growth rate projections after the GDP growth rate fell short of expectations in the past quarters. “Rising interest rates, uneven distribution of monsoons and slowing global growth will dampen economic momentum,” said Moody’s while cutting growth forecasts on September 1. It cut calendar year 2023 growth rate projections to 5.2%. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Institution </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">GDP forecast cut FY23 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Earlier projection </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Moody’s </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.2% (Calendar year 2023) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">International Monetary Fund (IMF) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.4% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8.2% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nomura </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FICCI </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Goldman Sachs </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.2% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Asian Development Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">CRISIL </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.3% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.8% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">SBI </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.8% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">YES Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.9% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td></tr></tbody></table> With prices of most commodities coming off the highs seen during the first half of the fiscal year, markets are betting on a better second half. The RBI Governor echoed this sentiment on Friday in his speech. The August consumer price inflation remains elevated and above the upper tolerance band of the RBI, however, a good kharif crop and declining prices of most commodities could bring some respite to inflation. Das in his speech said: “The recent correction in global commodity prices including crude oil, if sustained, may ease cost pressures in the coming months. The inflation trajectory remains clouded with uncertainties arising from continuing geopolitical tensions and nervous global financial market sentiments.” Clearly, the battle against inflation is not over and more rate hikes are in the offing. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/rbi-hikes-repo-rate-by-50-bps-taking-it-to-a-three-year-high-of-5-9-das-says-inflation-at-alarmingly-high-levels/articleshow/94550429.cms">RBI hikes repo rate by 50 bps, taking it to a three-year high of 5.9% – Das says inflation at ‘alarmingly high levels’ across jurisdictions</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/e-commerce-sales-will-drive-credit-cards-spends-in-september-says-report/articleshow/94538013.cms">E-commerce sales will drive credit cards spends in September, says report</a>

RBI cuts FY23 GDP growth forecast to 7% as developed world heads into recession

<ul><li><keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>’s MPC keeps <keyword id="43352" type="General" weightage="20" keywordseo="repo-rate" source="Orion">repo rate</keyword> unchanged for the fifth time in a row.</li><li>Most economists had unanimously expected a ‘pause’ for the fifth consecutive time.</li><li>A few economists also expected the MPC to change its stance to ‘neutral’ from withdrawal of accommodation. </li></ul>The Reserve Bank of India (RBI)’s Monetary Policy Committee unanimously decided to keep the repo rate unchanged at 6.5% for the fifth consecutive time on Friday. The central bank also revised its GDP growth projections for FY24 to 7% instead of 6.5% it had projected earlier. This is after the second quarter’s GDP however threw in a surprise by coming in at 7.6%, much higher than RBI’s forecasts of 6.5%. RBI’s real GDP growth forecast table <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Period of time </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">RBI earlier forecast </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Revised estimates </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Actual GDP growth </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY24 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.6% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">NA </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q1 FY24 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">NA </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.8% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q2 FY24 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">NA </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.6% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q3 FY24 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">NA </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q4 FY24 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">NA </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>‘We don’t wait for the house to catch fire’ The MPC also decided to remain focussed on ‘withdrawal of accommodation’. This is to ensure inflation progresses along the target of 4%, said <keyword id="6359111" type="General" weightage="20" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword>, governor of RBI. It has also kept FY24’s CPI inflation projections unchanged at 5.4%. Addressing the central bank’s decision to increase risk weightage on unsecured loans, the governor said it’s a pre-emptive measure to address potential risks. “We don’t wait for the house to catch fire and then act,” Das said in his speech. The central bank has to be mindful of the risk of being carried away by a few months of good data. “We have to be watchful of new shocks that can hit the economy from anywhere anytime” he said. Das also said that as the new year begins, the long awaited normalcy eludes the global economy. “In such volatile times, emerging markets have remained resilient to volatility," he said. Experts expected the ‘pause’ Food inflation, which accounts for nearly half of the overall consumer price basket, rose 6.61% in October as compared with 6.56% in September. Consumer Price Index (CPI) is also expected to come around 5.4-5.5% by March 2023, though November and December inflation could overshoot 6%. Says Mandar Pitale, head- treasury, SBM Bank India, “Overall data prints released after October MPC are supportive for MPC to continue with its current “withdrawal of accommodation” stance. The MPC is also likely to maintain the status quo on rates in the forthcoming policy announcement.” A few also expected RBI’ MPC to change its stance to ‘neutral’ from withdrawal of accommodation. However, this may not happen just yet as the governor has been insisting on bringing inflation within its target of 4%. A note by Yes Bank says that the 4% inflation target continues to elude, the only option for the RBI is to hold policy rates and keep the stance of ‘withdrawal of accommodation’ unchanged. “Given its (RBI) worry on the personal credit space, the RBI is also unlikely to change its thoughts on tight liquidity conditions. While liquidity conditions are difficult to predict given volatility in flows, we think there ought to be more clarity on OMOs and the plans around the same,” said Yes Bank. Sheersham Gupta, director and senior technical analyst at Rupeezy said that the spread of lending rates and repo rate have also been narrowing down in the past couple of months, indicating a more direct transmission of monetary policy.

RBI expects India’s GDP to grow at 7% in FY24; keeps repo rate unchanged

Despite extreme volatility in global stock markets, especially after US Federal Reserve chairman <keyword id="1727754" type="General" weightage="50" keywordseo="jerome-powell" source="Orion">Jerome Powell</keyword>'s Jackson Hole symposium remarks last week, <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (<keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword>) Governor <keyword id="6359111" type="General" weightage="50" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword> said on Monday that the Indian rupee has "held its own" and moved in an "orderly manner at a time of sharp depreciation in other currencies". "The recent commentary from the US Fed at Jackson Hole on the future trajectory of US monetary policy has infused substantial volatility into global financial markets, with large spillovers and knock-on effects on emerging market economies (EMEs)," Das said while delivering a speech during the annual event of Fixed Income Money Market and Derivatives Association of India (FIMMDA). He, however, quickly went on to add that the RBI has intervened in forex markets to prevent excessive volatility in the exchange rate. "RBI's policy is to prevent excessive volatility of the rupee, or the exchange rate and also anchor expectations around the currency's depreciation," he said. Das further indicated that the central bank's monetary policy, going forward, will be "watchful, nimble-footed and calibrated". He also said that India is widely perceived to be the fastest growing economy in the world this year at a time when other major economies may actually be encountering recession or considerable moderation in their growth momentum. Referring to <keyword id="362955" type="General" weightage="80" keywordseo="powell" source="Orion">Powell</keyword>'s comments on keeping up with rate hikes, Das said that financial markets in India have recovered from the lows that they fell to in the immediate aftermath of the Jackson Hole event. "In this turbulent global environment, the resilience exhibited by Indian financial markets reflects the robust macroeconomic fundamentals of the economy," he added. Last week, Powell, while speaking at the Jackson Hole symposium, had indicated that the US Federal Reserve is likely to keep the interest rates high for some time. The comment had led to large-scale volatility in global markets. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/india-has-not-generated-outsized-returns-for-foreign-investors-says-ambits-nitin-bhasin/articleshow/94013159.cms">India has not generated outsized returns for foreign investors, says Ambit’s Nitin Bhasin</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/personal-finance/news/investment-lessons-from-rakesh-jhunjhunwalas-1111-partner-utpal-sheth/articleshow/94008505.cms">Investment lessons from Rakesh Jhunjhunwala’s 1+1=11 partner, Utpal Sheth</a>

Rupee has held its own despite sharp depreciation in other currencies: RBI Governor

New Delhi, <keyword id="50847" type="General" weightage="80" keywordseo="reserve-bank" source="Orion">Reserve Bank</keyword> Governor <keyword id="6359111" type="General" weightage="50" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword> on Tuesday said the central bank is firmly focused on bringing down inflation to 4 per cent and remains prepared to undertake policy responses to deal with supply shocks, which have become more frequent with profound implications. The current episode of high global inflation and preceding overlapping shocks of the pandemic and Russia-Ukraine war have raised significant issues and challenges for the conduct of monetary policy, the governor said in a speech on 'Art of Monetary Policy Making: The Indian Context' at <keyword id="3658227" type="General" weightage="50" keywordseo="delhi-school-of-economics" source="Orion">Delhi School of Economics</keyword> (DSE) <keyword id="18666750" type="General" weightage="50" keywordseo="diamond-jubilee-distinguished-lecture" source="Orion">Diamond Jubilee Distinguished Lecture</keyword>. He said the monetary policy framework in India has evolved in line with the developments in theory and country practices, the changing nature of the economy and developments in financial markets. Within the broad objectives, the relative emphasis on inflation, growth and financial stability has, however, varied across monetary policy regimes since independence. Das listed out steps the central bank took to deal with the situation created in the wake of the COVID pandemic and the Russia-Ukraine war. Following the outbreak of the war, the central bank raised the policy rates by 250 basis points since May 2022. "After a near-zero policy rate for a prolonged period, central banks in these (advanced) economies started raising interest rates aggressively in 2022, which contributed to stress in certain banks in these economies. In contrast, our battle against inflation is not constrained by financial stability concerns. In fact, even during the COVID phase, we continuously took measures to strengthen financial stability," the governor said. The Reserve Bank, he said, has adopted a prudent approach and taken several initiatives to revamp the regulation and supervision of banks, NBFCs and other financial entities by developing an integrated and harmonised architecture. "Our banking system remains resilient and healthy with improved capital ratios, asset quality and profitability," he said. Das said the <keyword id="30067" type="General" weightage="50" keywordseo="rbi" source="Orion">RBI</keyword>'s experience in recent years shows that supply shocks have become more frequent with profound implications for inflation management and anchoring of inflation expectations. A key risk of sustained high inflation is that it can de-anchor inflation expectations. "It is, therefore, important to remain vigilant and take necessary steps in a calibrated and timely manner to keep expectations firmly anchored. "The Reserve Bank has been quick and calibrated while navigating through such turbulences. We look through fleeting shocks but remain prepared to undertake policy responses if such shocks show signs of persistence and getting generalised," he said. In such a scenario, monetary policy has to focus on containing the second-round effects, the governor added. "We will remain watchful of this also. The role of continued and timely supply-side interventions, as being undertaken by the government, assumes criticality in limiting the severity and duration of such food price shocks. "In these circumstances, it is necessary to be watchful of any risk to price stability and act timely and appropriately. We remain firmly focused on aligning inflation to the target of 4.0 per cent," he added. Headline inflation based on the Consumer Price Index (CPI) had eased to 4.8 per cent in June 2023 from the peak of 7.8 per cent in April 2022. It, however, surged to 7.4 per cent in July, mainly on account of a spurt in vegetable prices, which have already started moderating. Das noted that low and stable inflation helps households and businesses in planning for long-term savings and investments, which ultimately drive innovation, productivity and sustainable growth. On the contrary, high and volatile inflation corrodes the economy by denting productivity and the long-term growth potential, he said, adding inflation also imposes a disproportionate burden on the poor. The Reserve Bank has been mandated to maintain price stability, keeping in mind the objective of growth. Price stability has been numerically defined as maintaining a headline CPI inflation target of 4.0 per cent with a tolerance band of +/- 2 per cent. The tolerance band provides flexibility to accommodate growth and financial stability concerns, supply shocks and measurement and forecast errors, Das said. The target is set by the government in consultation with the Reserve Bank for 5 years.

RBI firmly focused to bring down inflation to 4%: Shaktikanta Das

<ul><li>Amidst the rising cost of properties and the cumulative 250 bps rate hikes by the <keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword> in the last one year and more, affordable housing buyers have taken a blow. </li><li>With a steady interest rate environment, potential buyers of affordable homes may be encouraged to proceed with their home buying plans. </li><li>Banks may potentially be required to provide borrowers with clearer and more detailed information about how their loan EMIs are calculated and how they may vary over time. </li></ul>The Reserve Bank of India keeping lending (repo) rates unchanged is nothing but good news for aspiring <keyword id="6371902" type="General" weightage="20" keywordseo="home-buyers" source="Orion">home buyers</keyword>, especially for those in the middle income categories who aspire to buy a home. <keyword id="1263554" type="General" weightage="20" keywordseo="affordable-home" source="Orion">Affordable home</keyword> buyers were at the receiving end of rate hikes for more than a year before the RBI paused hiking rates. Now, the third successive pause gives buyers a better planning window, especially as economists don’t expect further hikes till the end of the year. “By maintaining a steady interest rate environment, there is a hopeful projection that these potential buyers will be encouraged to proceed with their home buying plans,” says Pradeep Aggarwal, founder and chairman, Signature Global, a real estate developer. As per research by ANAROCK, a real estate service provider, for homebuyers with a ₹30 lakh loan of a 20 year tenure, EMIs jumped up by 20% in the last two years. <keyword id="6354730" type="General" weightage="20" keywordseo="home-loan" source="Orion">Home loan</keyword> borrowers who were paying an EMI of approximately ₹22,700 in July 2021 are now paying approx. ₹7,300 - an increase of approx. ₹4,600 per month. “While home prices have also risen by 8-15% over the last twelve months, this increase is likely to be kept in balance by the countervailing forces of the unchanged policy rates. With interest rates holding steady, affordability synergies will continue to persist and thus support the homebuyer momentum and residential sales during the coming quarters,” says Samantak Das, chief economist and head research &amp; REIS India, JLL, another real estate service provider. Greater transparency on EMIs for floating rate loans The RBI Governor during his monetary policy speech said that steps will be taken to bring greater transparency to equated monthly instalments of floating rate loans. Says Das, “When there is change in policy rates and interest rates change, banks normally change the tenure without intimating the customers. Only when the EMI changes, is the customer intimated. What this would mean is that even for a tenure change banks need to adhere to a framework and intimate customers.” While specifics have not been provided in the monetary policy, such transparency can mean a number of things. “For example, banks may potentially be required to provide borrowers with clearer and more detailed information about how their loan EMIs are calculated and how they may vary over time,” says Anuj Puri, Chairman, ANAROCK Group. Lenders may also need to provide borrowers with comprehensive information on how the interest rate for their floating rate loan is determined. This may involve specifying the benchmark rate and explaining how the borrower's interest rate is derived from the benchmark rate, including any additional margin or spread added by the lender. “Borrowers could potentially expect a breakdown of their EMI components, including the portion allocated to interest and principal repayment, to help them understand how their monthly payment is distributed and how much is going towards reducing the principal amount owed versus paying interest charges,” says Puri. In the event that the interest rate for a variable-rate loan fluctuates, banks might need to inform borrowers in a timely manner about the alteration, including its effect on their EMIs. This procedure would enable borrowers to remain updated regarding alterations in their repayment commitments and manage their financial plans accordingly.

With RBI MPC not hiking rates, affordable home buyers have clearer planning trajectory

<ul><li><keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword> governor <keyword id="6359111" type="General" weightage="20" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword> claims that cryptocurrencies have no underlying value, not even worth a single tulip.</li><li>In comparison, India’s upcoming <keyword id="10678165" type="General" weightage="100" keywordseo="digital-rupee" source="Orion">digital rupee</keyword> will carry the same liability of the RBI as paper currency.</li><li>Das reiterated that private cryptocurrencies, such as Bitcoin, threaten the apex bank’s ability to maintain financial stability within the country.</li></ul>India’s <keyword id="6358156" type="General" weightage="20" keywordseo="central-bank" source="Orion">central bank</keyword> continues to be <a href="https://www.businessinsider.in/cryptocurrency/news/rbi-finally-explains-its-problem-with-cryptocurrencies-and-why-cbdcs-are-safer/articleshow/84666785.cms">apprehensive of cryptocurrencies</a>. Reserve Bank of India’s (RBI) governor, Shaktikanta Das, described cryptocurrencies as having no underlying value — “not even a tulip” — during the monetary policy press conference on February 10. <div type="ExtQuote" text="Private cryptocurrencies, or cryptocurrencies, which have currency-like characteristics, will undermine RBI’s ability to deal with issues of financial stability." auname="Statement by RBI Governor Shaktikanta Das during the monetary policy press conference on February 10"></div> RBI’s Executive Director, T Rabi Shankar, clarified that, unlike cryptocurrencies, the country’s central bank digital currency (<a href="https://www.businessinsider.in/investment/news/what-is-cbdc-fight-for-fiat-currencies-to-remain-relevant-in-the-age-of-digital-cryptocurrencies/articleshow/86222386.cms">CBDC</a>) will carry the same liability of the central bank. The <a href="https://www.businessinsider.in/cryptocurrency/news/indias-digital-rupee-may-not-necessarily-be-on-the-blockchain-according-to-rbi/articleshow/89475650.cms">digital rupee</a> will be a convertible to paper currency at a 1:1 ratio. The only difference between the <keyword id="6791630" type="General" weightage="20" keywordseo="cbdc" source="Orion">CBDC</keyword> and paper notes would be that one is digital while the other is physical. <div type="ExtQuote" text="Digital rupee will be issued by the RBI, it will carry the same liability of the central bank. Cryptocurrencies are privately created products." auname="Statement by RBI Executive Director T Rabi Shankar during the monetary policy press conference on February 10"></div> <cmsannotation type="cmsannotation" annotationid="What was tulip mania?" comment="subhead" text="What was tulip mania?">What was tulip mania?</cmsannotation> The hype around cryptocurrencies has often been compared to the ‘<a href="https://www.businessinsider.in/jamie-dimon-bitcoin-is-a-fraud-thats-worse-than-tulip-bulbs/articleshow/60485379.cms">tulip mania</a>’ of the 17th century, which happened in Holland. It is one of the more famous market bubbles and subsequent market crashes of all time. Long story short, speculation drove up the drives of tulip bulbs to all-time-highs — which was around $750,000 at its peak in today’s value, according to author and journalist <a href="https://www.google.com/books/edition/Memoirs_of_Extraordinary_Popular_Delusio/exA2AAAAMAAJ?hl=en&amp;gbpv=1&amp;dq=charles+mackay+memoirs+of+extraordinary+popular+delusions+and+the+madness+of+crowds&amp;printsec=frontcover">Charles Mackay</a> — before the market finally fell apart with buyers declaring they simply could not make payments. One doesn’t even need to go as far back as the 17th century to see the pitfalls of overly inflated assets. The 1990s ‘dot com bubble’ and the more recent 2008 global financial crisis are other examples of how a boom in consumerism has led markets into disarray. <cmsannotation type="cmsannotation" annotationid="RBI has no empathy for cryptocurrency traders" comment="subhead" text="RBI has no empathy for cryptocurrency traders">RBI has no empathy for cryptocurrency traders</cmsannotation> Das also told the press that traders should be aware that any investments that they put towards cryptocurrencies are “at their own risk” — a sentiment that Das has reiterated multiple times during this tenure at the helm of the RBI. However, this time around, the warning comes on the footsteps of the Indian government announcing a <a href="https://www.businessinsider.in/cryptocurrency/news/income-tax-return-form-will-have-a-whole-new-column-just-for-crypto-next-year/articleshow/89300147.cms">30% tax on all transactions of ‘virtual digital assets’</a> as well as a 1% tax deducted at source (TDS). While industry participants, like exchanges, decentralised finance (DeFi) startups and non-fungible token (NFT) marketplaces, have welcomed the news, they are also wary that the rate may discourage the rallying investments happening in the space. A <a href="https://www.businessinsider.in/cryptocurrency/news/income-tax-return-form-will-have-a-whole-new-column-just-for-crypto-next-year/articleshow/89300147.cms">tax rate of 30%</a> is currently applied to gambling and lottery winnings, which has led many to interpret that the government views cryptocurrencies as a speculative asset, in line with the RBI governor’s comments. Indian Finance Minister <keyword id="2640262" type="General" weightage="20" keywordseo="nirmala-sitharman" source="Orion">Nirmala Sitharman</keyword> stated that just because India is taxing cryptocurrencies, it does not mean that they are getting any legitimate status — that will occur once the crypto bill is passed. However, the formulation of laws around this new emerging asset class has been <a href="https://www.businessinsider.in/investment/news/heres-a-quick-look-at-how-the-evolution-of-cryptocurrencies-has-played-out-in-india/slidelist/87902549.cms">caught in limbo</a> for nearly a year. It was initially scheduled for parliamentary discussion in February last year, and then again during the <a href="https://www.businessinsider.in/cryptocurrency/news/no-india-crypto-bill-in-sight-even-after-winter-session-of-parliament-comes-to-a-close/articleshow/88449161.cms">Winter Session</a>. Both times, the legislation did not get introduced for debate owing to <a href="https://www.businessinsider.in/cryptocurrency/news/india-crypto-bill-waiting-on-approval-from-pm-modi-before-parliament-discussion-can-happen/articleshow/88206954.cms">pending approval</a> from the Cabinet, India’s highest decision making authority. Stakeholders are hopeful that it may finally surface for public purview sometime this year. The RBI’s <a href="https://www.businessinsider.in/budget/news/digital-rupee-to-be-introduced-by-the-rbi-confirms-fm-nirmala-sitharaman-speech/articleshow/89268343.cms">digital rupee</a> is expected to go live before March 2023. The bank is currently only working with agencies within the RBI’s ecosystem — not external agencies are involved thus far. Moreover, there is <a href="https://www.businessinsider.in/cryptocurrency/news/indias-digital-rupee-may-not-necessarily-be-on-the-blockchain-according-to-rbi/articleshow/89475650.cms">no guarantee</a> that the CBDC will be based on blockchain. “The technology choices are open,” said Shankar. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/indias-digital-rupee-may-not-necessarily-be-on-the-blockchain-according-to-rbi/articleshow/89475650.cms">India’s digital rupee may not necessarily be on the blockchain, according to the country’s central bank</a> <a href="https://www.businessinsider.in/cryptocurrency/news/indias-definition-of-virtual-digital-assets-isnt-set-in-stone/articleshow/89403743.cms">India’s definition of ‘virtual digital assets’ isn’t set in stone</a> <a href="https://www.businessinsider.in/tech/news/here-are-the-main-areas-where-technology-took-a-big-role-in-the-union-budget-2022/slidelist/89279470.cms">All things tech in Nirmala Sitharaman's budget speech</a>

You Searched For "rbi governor speech" and got 9 results

We’d like to curtail consumption-led loans with no clear end use: RBI Dy Governor

Katya Naidu

We want the elephant of inflation to walk back to the forest: Shaktikanta Das

Katya Naidu

RBI to come up with unified regulatory framework on connected lending

Katya Naidu

RBI cuts FY23 GDP growth forecast to 7% as developed world heads into recession

Malini

Bhakti

RBI expects India’s GDP to grow at 7% in FY24; keeps repo rate unchanged

BI India Bureau

Rupee has held its own despite sharp depreciation in other currencies: RBI Governor

IANS

RBI firmly focused to bring down inflation to 4%: Shaktikanta Das

PTI

With RBI MPC not hiking rates, affordable home buyers have clearer planning trajectory

Anagh Pal

RBI governor still has not thawed on ‘private’ cryptocurrencies — compares crypto hype to ‘tulip mania’

Prabhjote Gill

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