The RBI decision as expected, Rajan delivered what he promised: industry

raghuram-rajanThe RBI’s decision to maintain the policy rates was in expected lines said Smt. Arundhati Bhattacharya, SBI chairman. Appreciating the move by RBI to go into Open Market Operation (OMO) she added that transmission of rates will happen gradually over the next few months as credit growth picks up pace.

Dr. Rudra Sensarma, Professor of Economics,IIMK further added that RBI may not have wanted to cut domestic rates at this juncture that would have led to capital outflows and weakening of the rupee.

Further action on the repo rate can be expected only after the effects of monsoon and salary hikes of government employees, he said.

“But by then an interest rate cut may become unnecessary if banks start lowering their lending rates as they clean up their books and begin facing competition from new entities such as payments banks and small finance banks he added. Moreover the recently released strong US jobs data indicates that the US economy continues to recover which meant that the RBI may be inclined to raise interest rates sooner than later was his inference,” he added.

VS Parthasarathy, group CFO of Mahindra & Mahindra called the latest move Rajan’s ‘Swan Song’, and credited him with delivering what he promised when he took over the reins three years ago.

“He is leaving on a high note having delivered on what he promised – a very strong foreign exchange reserve position, a steady Rupee, a national focus on keeping ‘relevant’ Inflation (CPI) in a band between 2% – 6%, and the country’s liquidity position improving from ‘deficit’ to ‘surplus’. As a result, he has prepared the stage for the new incumbent to play a symphony,” he said.



Demonetization: RBI removes ‘explanation’ requirement for KYC accounts The Reserve Bank of India has responded to widespread criticism of its directive to collect 'explanations' from those depositing more than Rs 5000 by clarifying that this directive will not apply to bank accounts with proper documentation."On a review of the above, we advise that the provisions of the above circular at sub para (i) and (ii) will not appl...
Demonetizaton: Govt places limits on last minute deposits The Reserve Bank of India said that any person who continues to hold old notes of 500 and 1000 rupees in bulk will get only one more chance to deposit them into bank accounts and will also have to provide an explanation for the delayed deposit."Tenders of SBNs in excess of ₹ 5000 into a bank account will be received for credit only once during the remain...
7 ILLOGICAL REASONS to oppose DEMONETIZATION The current demonetization move by the Narendra Modi government has seen a lot of accusations and counter-accusations being levelled by both the supporters and opponents of the move.While the government has tried to deal head on with the official accusations levelled by opposition political parties, a much more subtle misinformation campaign is going o...
DEMONETIZATION: How some earned lakhs standing in queues The government has banned over-the-counter exchange of old 500- and 1000-rupee notes due to suspected gaming of the system by those with black money. According to banking industry sources, the over-the-counter exchange system was being massively misused by hawala operators and others who had illegal funds to convert their old currency into new notes."The...
RBI chests have enough cash – ICICI Bank CEO ICICI Bank Chief Executive Officer Chanda Kocchar today said the Reserve Bank of India's currency chests have enough cash and there is no situation of scarcity for banks in securing notes.Kocchar also said that all banks including hers are bringing more and more ATMs into working mode after a change in currency put most of them out of function."Thes...
CASH SWAP: Axis Bank cuts interest rates by 0.15 percentage point Axis Bank, one of India's top two private banks, has cut its lending rates by 0.15 percentage points in the wake of the ongoing currency exchange program.With this, the bank's 'marginal cost-based lending rate' has been reduced to 9.05% for one year and 9.15% for three years.The change will come into effect from Nov 18.This would reduce the month...
Note Exchange: How to withdraw large amounts of cash for emergencies via ATM or branch Many bank branches are seeing unprecedented queues of people waiting to exchange their currency notes on Day 1 of the program, despite clear instructions that they can do so at any time over the next 50 days.Many people are waiting outside bank branches worried that if they don't exchange their old notes today, it will become totally useless.Finance ...
RBI’s OFFICIAL GUIDE on how to exchange currency notes of 500, 1000 The Reserve Bank of India has released the following question and answers to alleviate citizens' doubts about the new ban on 500 and 1000 rupee notes.We are reproducing the entire FAQ below for readers' convenience.Why is this scheme?The incidence of fake Indian currency notes in higher denomination has increased. For ordinary persons, the fake n...
US Federal Reserve likely to raise interest rate in December: Angel Broking Angel Broking said it believes that the US Federal Reserve is likely to raise policy interest rates starting from December this year.The broking house was responding to the latest move by the US central bank to keep rates steady at its last policy decision before next week’s US Presidential election.“The Federal Reserve has kept the interest rate on ...
United Bank of India cuts benchmark interest rates by 5 bps United Bank of India has cut its benchmark interest rate by 5 basis points across all tenures.With this, the marginal cost of funds-based lending rate for one year loan has been cut to 9.4%.The MCLR for one month is 9.25%. The new rate will be applicable to all new loans of the bank with effect from 17th Oct.MCLR is the new benchmark lending rate...
Hiranandani welcomes interest rate cut Surendra Hiranandani, Chairman & Managing Director, House of Hiranandani welcomed the reduction of policy interest rates by the Reserve Bank of India today as part of its monetary policy review."We welcome the new governor’s move to cut rates by 25 bps on the back of a favorable monsoon that has helped stabilize food prices and inflation. This will i...
Bank of India hikes base rate by 5 basis points Bank of India said it had revised its base rate from 9.70% to 9.65 %.The revised rate will be in effect from Friday.Base rate is the minimum interest rate that the bank charges. It is not allowed to issue loans below this rate to any of its customers.Bank of India is a commercial bank with headquarters in Mumbai, Maharashtra. Founded in 1906, it ...
Govt considers banning cash transactions of 3 lakh and above The government is considering the recommendation of Special Investigation Team (SIT) on black money to ban cash transactions above Rs 3 lakh, a top Finance Ministry official said at an ASSOCHAM event held in New Delhi today.“The SIT recommendations are under consideration. As far as the Income Tax Department is concerned, we have put a one per cent TCS (...
Axis Bank cuts interest rates on loans by 5 bps Axis bank has cut its loan interest rate by 5 basis points across all tenures.With this, the marginal cost of funds-based lending rate for three year loans has been cut to 9.4% and that for 1 year loan, has been cut to 9.25%.The MCLR for one month is 8.90%. The new rate will be applicable to all new loans of the bank with effect from tomorrow.MCL...
SBI offers discount on home loan EMIs for government servants State Bank of India, the public sector bank, announced a new scheme under which government and defence employees can get several concessions on home loans including a slower interest rate.Under the scheme, government employees will get an interest rate concession of 5 basis points (0.05%) over the Home Loan Card Interest Rate is available wherever check-...