Tag: RBi policy

RBI to launch UPI-based feature phone products; paper on digital payment charges soon

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Reserve Bank of India (RBI) governor Shaktikanta Das on Wednesday said that the central bank is proposing to release a discussion paper on charges in payment systems to make digital transactions more affordable. Further, he said that RBI will launch UPI-based payment products for feature phone users and make process flow for small value transactions simpler.

“There have been some concerns on the reasonableness of various charges incurred by customers for digital payments through credit cards, debit cards, prepaid payment instruments (cards and wallets), Unified Payments Interface (UPI) and the like. It is proposed to release a discussion paper on various charges in the payment system to have a holistic view of the issues involved and possible approaches to mitigating the concerns so as to make digital transactions more affordable,” Das said.

Further, he proposed to enhance limit for transactions via Retail Direct from Rs 2 lakh to Rs 5 lakh.

“Reserve Bank has been making efforts to facilitate greater participation of retail customers in financial markets, e.g. investment in the G-secs segment through the recent launch of Retail Direct Scheme, where UPI, in addition to other options such as internet banking, can be used to make payments for participating in both the primary and secondary markets. Over time, UPI has also become a popular payment option for Initial Public Offerings (IPOs) since its availability from January 01, 20194. It is reported that IPO applications of Rs 2 to Rs 5 lakh constitute approximately 10 percent of subscription applications,” he said.

“The transaction limit in the UPI system was enhanced from Rs 1 lakh to Rs 2 lakh in March 2020. To further encourage the use of UPI by retail investors, it is proposed to enhance the transaction limit for payments through UPI for Retail Direct Scheme and IPO applications from Rs 2 lakh to Rs 5 lakh. Separate instructions to NPCI will be issued shortly,” he added.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das announced that the central bank has decided to keep key rates unchanged – repo rate – at 4 percent and the stance remains accomodative. Das said the MPC voted 5:1 to maintain the ‘accommodative’ stance of policy for “as long as necessary to sustain and revive growth on a durable basis”.

With this, it is the ninth consecutive time since the rate remains unchanged.

Das said the pandemic has bought India together. The country is better prepared to deal with the economic disruption from COVID-19, if any. The pre-pandemic levels of output have been crossed, he said.

Catch all RBI policy related updates here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RBI policy: Shaktikanta Das proposes to enhance 14-day VRRR auction, re-establish it as main liquidity management operation

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Reserve Bank of India (RBI) will continue to rebalance liquidity conditions in a non-disruptive manner, said central bank’s governor Shaktikanta Das on Wednesday. He said that RBI’s aim is to re-establish 14-day Variable Reverse Repo Rate (VRRR) as the main liquidity operation.

The RBI is to absorb Rs 6.5 lakh crore in VRRR auction on December 17 and absorb Rs 7.5 lakh crore in VRRR auction on December 31.

“From January 2022, liquidity adjustment will be mainly via variable reverse repo auction,” Das said.

“We retain flexibility to fine-tune liquidity operations. The RBI will allow banks to make one-time pre-payment with respect to TLTROs announced,” he added.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das announced that the central bank has decided to keep key rates unchanged – repo rate – at 4 percent and the stance remains accomodative.

With this, it is the ninth consecutive time since the rate remains unchanged. RBI had last revised its policy repo rate or the short-term lending rate on May 22, 2020 in an off-policy cycle to perk up demand by cutting the interest rate to a historic low.

Das said MPC voted unanimously for keeping interest rate unchanged and decided to continue with its accommodative stance as long as necessary to support growth and keep inflation within the target. RBI retained its growth projection at 9.5 percent for the current fiscal despite concerns over Omicron.

Das also said the headline inflation would peak in the fourth quarter of the current fiscal. The inflation projection has been retained at 5.3 per cent for the current financial year.

Catch all RBI policy related updates here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RBI Monetary Policy: Rates unchanged, Das says growth good but economy needs support

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Reserve Bank of India’s (RBI) Monetary Policy Review Committee on Wednesday voted to keep benchmark signalling rates unchanged, while maintaining its ‘accommodative’ stance.

An accommodative stance means that the RBI will cut rates to inject money into the financial system whenever needed.

The repo rate stands unchanged at 4 percent, the reverse repo rate at 3.35 percent, the marginal standing facility and the bank rate have been maintained at 4.25 percent.

RBI Governor Shaktikanta Das said the country was better prepared to deal with economic disruption from COVID. He said that in several sectors, the pre-pandemic levels of output had been surpassed, but also said that the economy is not yet strong enough for self-sustaining growth and so would need policy support for some more time. The RBI retained its GDP growth forecast at 9.5 percent for the current fiscal (2021-22).

Das said prospects of economic activity were steadily improving and that various factors coming together would ease the inflationary pressures in the economy.

He said that private consumption was still below pre-pandemic levels, but on the positive side, corporate balance sheets were in a much better shape because of reduction in debt. Also, the government’s focus on capex was likely to attract investment by private sector firms as well.

Das said that latest data points indicated consumption demand was improving, and that urban demand too was strengthening.

He said that persistence of high core inflation (excluding food and fuel) was an area of concern, and that headline inflation number for the rest of the year would be high because of base effect.

Das said all components of GDP registered an year-on-year growth in the second quarter. He said recent reductions in excise duty, and Value Added Tax should support demand by increasing purchasing power.

Click here for our live blog on RBI monetary policy for more updates

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Marketbuzz Podcast With Reema Tendulkar: Sensex, Nifty50 likely to make gap-up opening ahead of RBI policy

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Indian equity benchmarks Sensex and Nifty50 are likely to start Wednesday’s session on a positive note ahead of the outcome of the RBI’s scheduled policy review. At 8:21 am, Nifty futures trading on Singapore Exchange — an early indicator of NSE’s Nifty50 benchmark index in India — were up 120 points or 0.7 percent at 17,331, suggesting a gap-up opening ahead on Dalal Street.

About MarketBuzz: The CNBCTV18.com podcast on the big themes, vital news and key events that you should know before the opening bell, powered by CNBC-TV18 anchors. MarketBuzz is your daily morning briefing by CNBC-TV18 research analysts and anchors Sonia Shenoy, Ekta Batra, Anisha Jain, Nigel D’Souza and Mangalam Maloo to kickstart your stock market investing. Subscribe to our free podcasts on Audioboom or listen on the featured podcast page on CNBCTV18.com.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Stock Market Highlights: Sensex ends 1,016 points higher after RBI policy; Maruti, SBI up 3%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Stock Market Highlights: Indian equity benchmarks Sensex and Nifty50 extended gains to a second straight day on Wednesday amid broad-based gains, after the RBI kept key interest rates on hold and decided to stay ‘accommodative’. Financial, IT, oil & gas and consumer stocks were the biggest contributors to the gains in headline indices. Broader markets also strengthened, with the midcap and smallcap finishing the day nearly two percent each. Volatility gauge VIX eased 6.5 percent.

Catch highlights of the December 8 session, and more, here:

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Stock Market Highlights: Sensex ends 887 points higher as market rebounds; Tata Steel, Axis Bank up 4%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Stock Market Highlights: Indian equity benchmarks Sensex and Nifty50 made a big comeback on Tuesday following two days of decline. Gains across sectors, led by financial, IT, oil & gas and metal shares, pushed the headline indices higher. Broader markets also strengthened, with the Nifty Midcap 100 and Smallcap 100 indices rising more than one percent each.

Catch highlights of the December 7 session, and more, here:

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Framework for retail digital payments in offline mode to be available soon, says RBI

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Reserve Bank of India (RBI) on Friday said that offline payments mechanisms will soon be made available throughout the country. As per the announcement, customers who face internet connectivity issues, which don’t allow them to make payments using online digital modes will now be able to use the offline payment mechanisms to make payments in due course.

“A scheme to test technologies that enable digital payments even in remote places where internet connectivity is either absent or barely available was announced in August 2020. Given the encouraging experience gained from the pilot tests, it is proposed to introduce a framework for retail digital payments in offline mode across the country. This will further expand the reach of digital payments and open up new opportunities for individuals and businesses,” RBI Governor Shaktikanta Das said.

According to Shivaji Thapliyal, Lead Analyst – Institutional Equities, YES SECURITIES, this service will popularize digital payments in areas will low internet penetration.

Adding to it, Deepak Chandnani, MD- South Asia & Middle East, Worldline said that the proposed framework to enable digital payment solutions in offline mode will certainly push forward their adoption particularly in rural pockets of the country that have a higher preponderance of poor network connectivity and quality.

“While this is primarily for the acceptance of small value transactions only, it is a big move towards achieving the overall financial inclusion objectives of the country,” he said.

Welcoming the move, SS Mallikarjuna Rao, MD and CEO at Punjab National Bank said that this is another step in a journey towards creating digital financial infrastructure.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Explained: What is RBI’s ‘On Tap TLTRO’ scheme? All you need to know

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Reserve Bank of India (RBI) extended the special 3-year long-term repo operation (LTRO) of Rs 10,000 crore for small finance banks (SFBs) till December 31 and made it available on-tap.

The ‘On Tap TLTRO’ worth Rs 1 trillion, was originally unveiled over a year ago.

Under the scheme, the RBI would allow banks to extend liquidity by pledging government securities with the central bank and then invest the said liquidity back into the economy. Targeted long-term repo operations (TLTRO) are borrowed from the central bank at repo rates, which currently stand at 4 percent, for a period of three years. These funds need to be invested in corporate bonds, commercial papers, and non-convertible debentures distributed in 31 specific sectors. These sectors were chosen based on the stress they were in as a result of the pandemic.

The scheme provided banks with a liquidity option for the long-term unlike short-term policies like liquidity adjustment facility (LAF) and marginal standing facility (MSF) that the RBI offers to banks.

Why is the TLTRO important?

The ‘on tap’ TLTRO scheme is important as banks get easy access to cheap capital from the central bank, which they, in turn, can lend out to other businesses and sectors in terms of investment-grade corporate bonds. While the RBI cannot directly give out a fiscal stimulus, by providing access to cheaper capital, the RBI ensures the steady flow of capital in the economy. Since these funds can also be used to provide bank loans and advances to the distressed sector, the cash crunch that many sectors are facing is ameliorated.

As the banks need to pledge government securities in order to take the capital, the prices for government securities also get propped up as a result.

What are the maturity restrictions?

There are no maturity restrictions on the securities that are to be acquired within the ambit of the scheme. However, banks need to keep their held to maturity (HTM) specified security portfolio above or equal to the amount that has been availed under the TLTRO scheme.

Banks availing the scheme also have to invest the amount availed under the following manner under RBI’s orders — 10 percent in securities of Microfinance Institutions (MFIs), 15 percent in securities of NBFCs with an asset size of up to Rs 500 crore or below, and 25 percent in securities by NBFCs with an asset size between Rs 500 crore and Rs 5,000 crore.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RBI raises IMPS transaction limit; Check limits on RTGS, NEFT transfers

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Reserve Bank of India (RBI) on Friday proposed to increase the per transaction limit on the Immediate Payment Service (IMPS) from the existing Rs 2 lakh to Rs 5 lakh.

IMPS managed by the National Payments Corporation of India (NPCI) is a payment system providing 24×7 instant domestic funds transfer facility and is accessible through various channels like internet banking, mobile banking apps, bank branches, ATMs, SMS and IVRS.

Apart from IMPS, National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) are also the platforms of money transfer. Using these services, customers can transfer money from one bank account to another without dealing with bank staff.

Let’s take a closer look at these:

IMPS

IMPS enables individuals to make money transfers instantly through banks across the country. It is available round the clock throughout the year, even on bank holidays.

The eligible criteria for the banks who can participate in IMPS is that the entity should have valid banking or prepaid payment instrument license from the Reserve Bank of India to participate in IMPS.

Currently, customers can send up to Rs 2 lakh using this facility. However, after RBI’s proposal, this limit will be extended to Rs 5 lakh.

NEFT

National Electronic Funds Transfer (NEFT) is a nationwide centralised payment system owned and operated by the Reserve Bank of India (RBI). It offers round-the-clock availability on all days of the year and provides near-real-time funds transfer to the beneficiary account and settlement in a secure manner.

NEFT has a PAN-India coverage through a large network of branches of all types of banks.

There is no limit imposed by the RBI for funds transfer through the NEFT system. However, some lenders may place amount limits based on their own risk perception with the approval of their board.

RTGS

RTGS can be explained as a system where there is a continuous and real-time settlement of fund transfers, individually on a transaction-by-transaction basis (without netting).

‘Real Time’ means the processing of instructions at the time they are received; ‘Gross Settlement’ means that the settlement of funds transfer instructions occurs individually.

Considering that the funds’ settlement takes place in the books of the Reserve Bank of India, the payments are final and irrevocable.

The minimum amount to be remitted through RTGS is Rs 2 lakh with no upper or maximum ceiling.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Closing Bell: Nifty50 hits record 17,895 as market extends gains to second day after RBI policy

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Indian equity benchmarks extended gains to a second straight day to post a record high, after the RBI held the key interest rates at existing levels and maintained its “accommodative” stance. Gains in IT, oil & gas and PSU banking shares led the market higher. Most analysts said the market drew comfort from no big surprises as the RBI’s policy was along expected lines.

The Nifty50 benchmark climbed 104.9 points to settle at a record 17,895.2, surpassing an existing closing high registered on September 27.  The 30-scrip Sensex gauge rose 381.2 points or 0.6 percent to settle at at 60,059.1.

During the session, both indices came within reach of their all-time highs registered late last month.

Among blue-chip stocks, Reliance Industries, Wipro, Infosys, tata Motors and Tech Mahindra — closing between 1.6 percent and 3.8 percent higher — were the top gainers. On the other hand, Coal India, SBI Life, NTPC, Maruti and Shree Cement — down between 1.1 percent and 1.6 percent — were the worst hit among the 27 laggards in the Nifty50 universe.

“The credit policy is neutral to positive as the market was already expecting that interest will remain unchanged. It is is cheering the fact that there is no change in stance… We are outperforming despite a rise in US bond yields, the dollar index and crude oil prices,” said Santosh Meena, Head of Research, Swastika Investmart.

RIL shares scaled a record high and were the biggest boost for both headline indices.

ALSO READ: Reliance becomes first Indian company to hit Rs 18 lakh crore mcap

TCS shares ended 1.3 percent higher at Rs 3,943 apiece on NSE as investors awaited the IT major to kick off the earnings season. The country’s largest IT company will post its financial results for the July-September period after market hours.

Broader markets also rose with the smallcap index beating headline indices by rising 1.2 percent. The midcap index rose 0.4 percent. Dixon, IndiaMart, MRF, Chambal Fertilizers and IEX — rising between 5.5 percent and 15.7 percent — were among the top gainers from the midcap and smallcap segments. On the flipside, Godrej Properties, MFSL, Adani Total, GNFC and Infibeam — falling between 2.5 percent and 4.6 percent — were among the top losers.

The Monetary Policy Committee kept interest rates steady at record lows as widely expected, and reiterated the need to unwind COVID-era stimulus gradually to aid the nascent economic recovery. Currently, the repo rate — the key interest rate at which the RBI lenders funds to commercial banks — is at four percent and the reverse repo rate — the rate at which it borrows — at 3.35 percent.

The central bank retained its GDP growth forecast for the year ending March 2022 at 9.5 percent, while lowering its consumer inflation projection to 5.3 per cent 5.7 per cent citing evenly-balanced risks. 

The RBI policy seemed more dovish than expected but in line with forecasts, said Nikhil Gupta, Chief Economist at Motilal Oswal Financial Services. “Weak growth should keep the RBI go more easy on normalisation, even if some emerging markets have already hiked rates,” he said.

Catch highlights of the Oct 8 session here | RBI policy

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow