Heena Sharma Blog

. The Reserve Bank of India (RBI) on Friday announced additional set of regulatory measures to reduce the burden of debt servicing due to disruptions caused by the coronavirus (Covid-19) pandemic, including an asset classification standstill for accounts that avail a moratorium between March 1 and May 31. Such accounts will, therefore, be classified as non-performing assets from 180 days of overdue, rather than the current norm of 90 days, according to a set of measures announced by RBI Governor Shaktikanta Das on Friday. “Economic activity has come to a standstill during the period of the lockdown, with consequential lingering effects which have unambiguously affected the cash flows of households and businesses,” the RBI said. On March 27, the RBI had permitted lending institutions in India to grant a moratorium of three months on payment of current dues falling between March 1 and May 31, 2020. Read More

Addressing the media for the second time since the Narendra Modi government imposed a national lockdown on March 25, RBI Governor Shaktikanta Das announced a reduction in reverse repo rate by 25 basis points from 4 per cent earlier to 3.75 per cent now. The reduction in reverse repo rate is one of a slew of announcements made by the RBI governor today. This was his first address since the lockdown was extended till May 3 by the Prime Minister. "The mission is to minimise the epidemiological damage in the country due to coronavirus. I want to convey the RBI's resolve and the way forward," said the RBI governor. Read More

After RBI allowed commercial banks to provide their customers a moratorium of three months for repayment of term loans, public sector banks have sprung into action. Public sector banks have informed their customers about deferment of EMIs and interest dues to help soften the blow due the coronavirus crisis . The deferment may come at a price though. The country's largest lender State Bank of India on Wednesday warned borrowers that deferment of equated monthly instalments (EMIs) offered under the RBI's relief package on account of COVID-19 could put an additional cost on them. The lender also advised borrowers to repay their loans if they are in a position to do the same. SBI said on its website that deferring the EMIs for a home loan of Rs 30 lakhs with a remaining maturity of 15 years, the net additional interest would be approximately Rs 2.34 lakhs, which is equal to eight EMIs. In other words, if customers defers three EMIs then they will end up paying 8 EMIs more...

A rate cut by the Reserve Bank of India (RBI) was much expected this time and the Governor did not disappoint. The aggressive cut of 75 basis points (bps) in the repo rate is commendable, as it provides the balm required to revive the economy. This is evidently meant to counter the negative impact of the coronavirus (Covid-19) pandemic . Governor Shaktikanta Das was very prudent in not giving a forecast for growth or inflation because, as he rightly stated, with things changing so fast, it is not certain how long the threat will last and how its spread and depth will impact the economy. Therefore, the policy is directed towards the immediate problem of mitigating the damage caused by the virus. The RBI has decided to use a novel way to influence interest rates. The repo rate has come down to 4.4 per cent, while the reverse repo rate is now 4 per cent with a difference of 40 bps. The idea is to ensure that banks do not deposit surpluses in the reverse repo auctions, which is av...

Following in the footsteps of global central banks, the Reserve Bank of India (RBI) on Friday lowered the key repo rate by 75 basis points (bps) to 4.4 per cent, to help arrest the economic slowdown in the wake of the coronavirus (Covid-19) outbreak. The reverse repo rate now stands at 4 per cent, down 90 bps. Repo rate is the rate at which a country’s central bank lends money to commercial banks, and reverse repo rate is the rate at which it borrows from them. MPC voted 4-2 in favour of the reduction of the repo rate by 75 bps, RBI Governor Shaktikanta Das said in an address to media. The governor informed that the members of the MPC met on March 24, 25 and 27. "It is our effort to ensure normal functioning of the market," Das said. The governor further said that the economic growth and inflation projection would be highly contingent depending on the duration, spread and intensity of the pandemic. "Need of the hour is to shield the economy from the pandemi...

Finance Minister Nirmala Sitharama assured the depositor that their corpus was safe in YES Bank and the Reserve Bank of India would manage the situation well. She said that the YES Bank board has been bypassed and former State Bank of India chief financial officer Prashant Kumar has been appointed administrator of YES Bank. RBI is finding a solution to this, and no depositor will lose any money, she said. She added that the people can withdraw money to deal with tough situations and the cash crunch is being dealt with. Read More

Defending the timing of YES Bank 's moratorium, Reserve Bank of India (RBI) governor Shaktikanta Das on Friday assured swift resolution to the issues concerning the beleaguered lender. “ The resolution will be done very swiftly, it will be done very fast. 30 days which we have given is the outer limit. You will see a very swift action from RBI,” told reporters after ASSOCHAM's 15th annual banking summit. "The decision is taken at a larger level, not at individual entity level, the move is aimed at ensuring safety of financial system," he added On the timing of the action on YES Bank, Das said there is always debate over RBI acting prematurely or taking too long to act. “ A market-led and bank-led resolution of the problem is always preferable. You have to give time to the bank management to take step and efforts. And the bank did take efforts. When we found that we cannot wait and should not wait any longer, we decided to intervene," Das added. Read...

The monetary policy committee (MPC) of the Reserve Bank of India (RBI) on Thursday kept the repo rate unchanged at 5.15 per cent — a 10-year low in its last policy review of the financial year 2019-20 (FY20). Consequently, the reverse repo rate stands unchanged at 4.90 per cent. Further, the bank said it will maintain 'accommodative' policy stance as long as it takes. The committee voted 6-0 in favour of the status quo of the interest rates. GDP growth forecast for the financial year 2020-21 (FY21) is projected at 6 per cent and in the range of 5.5-6.0 per cent in the first half of the next fiscal. while real GDP growth for 2019-20 was projected in the December 2019 policy at 5.0 per cent – 4.9-5.5 per cent in H2. In its last policy meet, the central bank had maintained the repo rate at 5.15 per cent points (bps). However, GDP growth forecast for FY20 was slashed to 5 per cent from 6.1 per cent. Read More

The Reserve Bank of India’s MANI ( Mobile Aided Note Identifier ) app is for visually-impaired persons to identify bank notes. And it is off to a poor start. The complaints on the Google Play Store are stacking up with no signs of improvement so far. First, it suffers from some basic flaws. The problem starts with the name. Visually-impaired persons are already struggling to adapt to Android’s perilous talkback feature in smartphones, which announces everything on the screen and helps them perform basic functions. A lot of the actions require people to give voice commands through Google Assistant. And the voice assistant just does not recognise an app spelled MANI (instead of money), yet. So, one has to have the MANI app widget on the home screen to find it with touch. The app recognises new currency notes accurately when placed in front of the phone’s camera and speaks the denomination out loud, but it struggles with the old notes. It also does not identify coins, nor can it...

The Centre told the Delhi High Court on Thursday that blocking of online gaming sites, including those of card games, was " technologically infeasible " as many states have enacted laws which partially or fully allow such activities. The submission on affidavit was made before a bench of Chief Justice D N Patel and Justice C Hari Shankar by the Ministry of Electronics and Information Technology (MEITY) which said that it has to be determined first whether the games on the sites involved games of skill or chance in order to block them for propagating gambling activities. The Delhi government told the court it can only take action if a gambling site was being hosted in the national capital or if there were instances of offline gambling. The Reserve Bank of India (RBI), in its affidavit, has said it has taken each and every step under the Foreign Exchange Management Act (FEMA) to prohibit, forbid and bar any kind of transaction which was illegal and contrary to forex ...

It was widely expected that the Reserve Bank of India (RBI) would cut interest rates on Friday for two reasons. The first is that by now it has become a habit where low growth tendencies, which have taken precedence over the original goal of inflation targeting gets thumbs-up for a rate cut. The second is that over the last month or so, the government has announced various steps to revive the economy with the last measure being the corporate tax cut. A rate cut after all these announcements appeared to be a foregone decision. The point of interest, however, was the quantum of the cut. The last time the Governor went in for 35 basis point (bps) cut, which was non-conventional and had popped up the choice between 25 bps and something more this time around. The RBI has settled for 25 bps this time. Given that the 110 bps rate cut so far has not quite led to the uptick in investment, one can look upon the series of rate cuts as being work in progress to lower the cost of capital ...

RBI Recruitment 2019: The Reserve Bank of India (RBI) has invited online applications to recruit for 199 vacancies to the post of RBI Grade B (DR) officer through the recruitment examination. The RBI recruitment notification is available on the official website of the RBI, rbi.org.in . The online application process is going to start from September 21, 2019, on on rbi.org.in and the last date to apply for the post of RBI Grade B officer is October 11, 2019. Direct link of RBI job notification 2019 The central bank will conduct the RBI Grade B Phase-I examination for the post of Grade B (DR) General/DEPR/DSIM on November 9, 2019, and RBI Grade B Phase-II examination on December 1, 2019. Candidates who clear the examination will be called for an interview session in January next year. Steps to apply for RBI Grade B recruitment 2019 Visit the official website of RBI on rbi.org.in Click on ‘Recruitment related Announcements’ A new page will appear, and then click o...

With a view to boost digital payments, the Reserve Bank of India (RBI) will allow the National Electronic Funds Transfer (NEFT) payment system to operate on a 24x7 basis from December 2019. RBI Governor Shaktikanta Das said the move was expected to revolutionise the retail payments system of the country. At present, the facility of NEFT — usually preferred for fund transfers of less than Rs 2 lakh — is available between 8 am and 7 pm on all working days, except the second and fourth Saturdays of every month. According to Mrutyunjay Mahapatra, managing director and chief executive of Syndicate Bank, the new process might require a standard operating procedure, which can be prescribed by the regulator, for seamless clearing and settlement of fund transfers among banks. “ Banks will need to tweak their back-end system. At present, they get a closure window between 11 pm and 4 am, for NEFT transactions. This process might involve a little higher operating cost,” said a senio...

The Reserve Bank of India Thursday lowered the economic growth forecast for the current fiscal to 7 per cent due to slowdown in domestic activities and escalation in global trade war. In the April monetary policy, the growth of Gross Domestic Product (GDP) for 2019-20 was projected at 7.2 per cent - in the range of 6.8-7.1 per cent for the first half of the fiscal and 7.3-7.4 per cent for the second part - with risks evenly balanced. Data for January-March quarter 2018-19 indicate that domestic investment activity has weakened and overall demand has been weighed down partly by slowing exports, the RBI said after the meeting of the Monetary Policy Committee (MPC), which decides on key policy rates. Weak global demand due to escalation in trade wars may further impact India's exports and investment activity, it added. Further, private consumption, especially in rural areas, has weakened in recent months. However, on the positive side, political stability, high capaci...

As expected, the six-member monetary policy committee (MPC) of the Reserve Bank of India (RBI) unanimously voted to lower the repo rate by 0.25 per cent in its three-day monetary policy meet, which ended on Thursday. The repo rate that stands at 5.75 per cent post the Thursday’s review is the lowest in nine years. This is the first time in 2019 when all members of the MPC (Dr. Chetan Ghate, Dr. Pami Dua, Dr. Ravindra H. Dholakia, Dr. Michael Debabrata Patra, Dr. Viral V. Acharya and Shri Shaktikanta Das) unanimously decided to reduce the policy repo rate by 25 basis and change the stance of monetary policy from neutral to accommodative. Accommodative stance indicates that the rate increase is off the table, said RBI Governor Shaktikanta Das. “ The RBI policy announcement is exactly on the same lines as expected by most of the market participants. The repo rate cut of 0.25 % and the change of stance from neutral to accommodative is key to supporting the sagging economic grow...

The Reserve Bank of India Thursday said it has done away with charges on fund transfers through RTGS and NEFT routes to boost digital transactions and asked banks to pass on the benefits to customers. The Real Time Gross Settlement System (RTGS) is meant for large-value instantaneous fund transfers while the National Electronic Funds Transfer (NEFT) System is used for fund transfers up to Rs 2 lakh. Country's largest bank SBI charges between Re 1 and Rs 5 for transactions through NEFT and between Rs 5 and Rs 50 for RTGS route. In its statement on developmental and regulatory policies after the Monetary Policy Committee's meeting, the RBI said it levies minimum charges on banks for transactions routed through RTGS and NEFT system for other fund transfers. Banks, in turn, levy charges on their customers. In order to provide an impetus to digital funds movement, it has been decided to do away with the charges levied by the RBI for transactions processed in the RTGS...

The Delhi High Court on Wednesday asked the Reserve Bank of India (RBI) how Google's mobile payment app , GPay, was facilitating financial transactions without the requisite authorisation from it. A bench of Chief Justice Rajendra Menon and Justice A J Bhambhani posed the query to RBI while hearing a PIL which claimed that GPay was acting as a payments system provider in violation of the Payments and Settlements Act as it has no valid authorisation from the central bank of the country to carry out such functions. The court issued notice to RBI and Google India seeking their stand on the issue raised in the plea by Abhijit Mishra, who has contended that GPay does not figure in RBI's list of authorised 'payment systems operators' released by the central bank on March 20, 2019. Read More Article Source -> Business Standard

The Reserve Bank of India (RBI), having changed management last month following a clash with the government, is likely to transfer an interim dividend of Rs 300-400 billion ($4.32 billion-$5.8 billion) to the government by March, according to three sources with direct knowledge of the matter. The dividend could help Prime Minister Narendra Modi's administration bridge a widening budget deficit following a drop in tax collections, and would come after the government pushed the RBI for the additional funds ahead of a national election due by May. Former finance ministry official Shaktikanta Das was appointed as the new governor of the Reserve Bank of India (RBI), following resignation of Urjit Patel last month amid tensions over the dividend payout and other issues. The government and RBI have now appointed a panel to look into the issue around the sharing of the RBI's reserves. Read More Business Standard

With the year coming to an end, and no communication on the issue of updating pension yet, the Reserve Bank of India (RBI) could be heading towards big agitations in the New Year. The government was expected to communicate by month-end its nod for improvement of the RBI's pension scheme, but that has not been done yet. In August, the RBI staff went on mass leave, protesting the government's rigid stance on the issue, harming the "real-time gross settlement" system for a few hours. However, this time, the unions may go on an indefinite strike and the RTGS system, which is the backbone of financial transactions in the country, could get severely impacted for days on end, the unions have threatened. What is the RBI pension issue The central bank has a pension kitty of over Rs 160 billion with which it manages the pension of its staff. For this purpose, it doesn't seek money from the government like other central government departments. At the ve...

The Reserve Bank of India (RBI) has revealed that Paytm was in violation of know-your-customer (KYC) rules while on-boarding users for its payments bank business for which it was banned from opening new accounts and e-wallets in August, The Times of India reported. In an RTI reply, the RBI revealed the payments bank failed to maintain the prescribed net worth limit of Rs 1 billion and also violated the end-of-the-day Rs 100,000 limit per account. Payments banks are not allowed to hold more than Rs 100,000 in each account. The RBI also expressed unhappiness at the close relations between Paytm founder Vijay Shekhar Sharma’s One97 Communications and the entity that runs Paytm Payments Bank (PPB). While Sharma owns a 51% stake, the rest is owned by One97 Communications and its subsidiaries. Payments banks are expected to maintain an arm’s length relationship with promoter group entities. Read More Business Standard