RBI reduced the repo rate by 0.25 per cent to 6 per cent earlier this month, citing reduction in inflation risk. The rate cut was the first in 10 months and brought policy rates to near 7-year low.
"There is clearly room for further rate cuts. But the rate cut from RBI is not good enough. "
On July 31, SBI slashed interest rate on savings account deposits by 50 basis points to 3.5 per cent on balance of Rs 1 crore and below.
The RBI cut the Repo rate by 25 basis points to a six-year low of 6 per cent on August 2, but kept its policy stance at “neutral”. Four MPC members, including Urjit Patel and Viral Acharya, voted for 25 basis points cut, while Ravindra Dholakia voted for a 50 bps cut.
The brokerage attributed the jump in inflation numbers to rising vegetable prices, but underlined that core inflation excluding food, fuel ticked up after moderating for three straight months.
According to the RBI study, compositional shifts in the instrument-wise flow of funds were evident in 2015-16. Currency and deposits, which have been historically the most preferred financial instruments were replaced by debt securities.
In the fourth quarter of financial year 2016-17, the bank had reported a loss of Rs 3,200 crore and Rs 5,158 crore loss in the financial year 2016-17. While the reported loss was lower than the preceding quarter, bad loans continued to surge.
The State Bank of India leads with sanctions of Rs 3,965 crore, followed by Bank of India and Bank of Baroda, with amounts sanctioned of over Rs 1,200 crore each, according to government data updated till December 2015.
NITI Aayog's report is expected to set the tone for consolidation roadmap. Five associate banks and Bharatiya Mahila Bank (BMB) became part of SBI on April 1, 2017, catapulting the country's largest lender to among the top 50 banks in the world.
The operating income of the bank fell by 5.17 per cent to Rs 25,612 crore during April-June quarter of 2017-18, as against Rs 27,007 crore in the same period a year ago. Of the other key metrics, bank’s fee income increased to Rs 4,870 crore during first quarter of 2017-18, up 16.21 per cent from Rs 4,190 crore in same period year ago.
For the year 2015-16, the RBI board had approved the transfer of surplus amounting to Rs 65,876 crore to the government. In the previous year, the Central bank had paid Rs 65,896 crore to the government, which came as a boon to the government in covering the deficit.
Following the merger, the total customer base of SBI increased to 37 crore with a branch network of around 24,000 and nearly 59,000 ATMs. The merged entity began operation with a deposit base of more than Rs 26 lakh crore and advances level of Rs 18.50 lakh crore.
Hemant Contractor said, "The private sector has grown very well. The All Citizens Scheme has grown by almost 100 per cent. The Atal Pension Scheme has also grown by 100 per cent. We have 60 lakh subscribers in Atal schemes. These schemes are doing well."
The applicant should have at least five years of experience in the financial sector, preferably in offering custodial services. They will have to maintain minimum of Rs 25 crore in the form of net-owned funds has also been mandated.
While recovery in the quarter improved to Rs 1,360 crore from Rs 970 crore in the year-ago period, upgradation stood at Rs 1,379 crore in Q1 as compared to Rs 2,209 crore in the year-ago period and Rs 1,071 crore in the March 2017 quarter.
Sebi has informed the tribunal that its action is not final. Sebi said that it has taken only a first time action against the suspected shell companies after the Ministry of Corporate Affairs shortlisted the firms.
In order to facilitate FDMC functioning, it also seeks “consequential amendments” in the RBI Act, Banking Regulation Act and the Payment and Settlement Systems Act as their confidentiality clauses do not allow access to raw data.
Era Infra owes Union Bank of India Rs 681 crore in term loans and $11 million in external commercial borrowings. The company’s total debt at the end of March 2016 stood at Rs 10,065 crore.
State Bank of India said in the previous week that 60 per cent of the deposits that had come into the bank with demonetisation had since moved out. It is believed that some of these deposits may have simply moved into term deposits, where the yield is higher.
Bankers said the meeting was to take stock of the proceedings and discuss the possibilities of recovery and resolution of these accounts. “It was a regular exercise, aiming to review these accounts. We want a proper co-ordination among all parties,” a banker said
After prime lending rate, benchmark prime lending rate, base rate and marginal cost of funds-based lending rate, the central bank is planning to come up with another system to price loans.
Currently, there are four credit bureaus in India — Credit Information Bureau (India) Ltd (CIBIL), Equifax, Experian, and CRIF Highmark. These bureaus provide credit scores and allied reports and services. A Public Credit Registry will complement private credit bureaus by certifying details of collateral.
The Sebi directive would come into force from October 1. "This is to enable listed companies to put appropriate systems in place for prompt submission of disclosures as stipulated in the circular," Sebi said.
If the inflation targets are met, you will not see any interest rate hike. If inflation turns out to be lower than what it is projected right now, that might open up a chance for rate cut. However, if inflation goes up faster than expected, we could even see a rate hike. But this is a very low probability event. Going ahead, the monetary policy will be data-driven and react to the direction in which the data move”
The Banking Regulation (Amendment) Bill, 2017, seeks to amend the Banking Regulation Act, 1949 and replace the Banking Regulation (Amendment) Ordinance, 2017, which was promulgated in May this year.
The rate cut is the RBI's first since one of the same size in October and a show of confidence in a country that has experienced a surge in foreign investments into debt and shares this year.
The RBI cut is likely to put pressure on banks to lower interest rates on home, auto and personal loans further.
According to Chanda Kochhar, MD and CEO, ICICI Bank, the prudent approach of the central bank in reacting to incoming data in a calibrated manner will reinforce the confidence amongst global investors. “
RBI Deputy Governor Viral Acharya, however, said the incremental benefit from the marginal cost of funds based lending rates (MCLR), introduced in April 2016 as an alternative to the earlier system of base rate, was positive.
India’s Monetary Policy Committee cut's decides to cut the repo rate by 25 basis points, but, aims remain "focused on its commitment to keeping headline inflation close to 4 per cent on a durable basis”.
Repo rate cut: The new repo rate at 6 per cent is the lowest in six-and-a-half years. The last rate cut took place in October 2016. Commenting on the rate cut, RBI Governor Urjit Patel said the central bank has maintained the economic growth projection at 7.3 per cent for the current fiscal.
"Excluding the HRA impact which will affect the CPI cumulatively, inflation would be a little over 4 per cent by fourth quarter as against 4.5 per cent inclusive of the HRA in the June statement (of RBI policy)," Urjit Patel said.
The Reserve Bank of India on Wednesday slashed the repo rate by 25 basis points to 6 per cent. The growth forecast has unchanged at 7.3 per cent for the current fiscal, said RBI Governor
The consumer price index inflation fell to 1.54% in June, the lowest reading since ther series started in 2012. This has prompted economists, bankers and governments to call for a rate cut by RBI.
While responding to a question seeking names of companies whose loans have been restructured, Finance Minister Arun Jaitley said amount of restructured corporate loans came down to Rs 2,04,884 crore in the last financial year.
The second case related to a complaint regarding “huge cash withdrawals in certain accounts”.