26 May 2018
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  • Oil price rise may force RBI to hike rates in August
    May 22, 2018
    Rise in oil prices may lead to inflationary trends in the country, forcing the Reserve Bank of India (RBI) to hike rates by 0.25 per cent in the August policy review, foreign brokerages said today. The apex bank, however, may opt for a status quo in rates at the forthcoming review in June, they said. "We now expect the RBI to embark on an earlier than expected rate hike cycle and expect the first hike in August of 0.25 per cent versus our earlier expectation of hikes to come inthe first quarter of 2019," Australian brokerage Macquarie said.
  • RBI may lean towards a rate hike on spike in crude price, inflation
    May 21, 2018
    With crude oil prices touching $80 per barrel and core inflation rising, economists have revised their expectations from the Reserve Bank of India (RBI), ahead of a crucial meeting of its monetary policy committee (MPC) on 4-6 June. While some economists expect the MPC to assume a more hawkish tone, others expect a 25 basis points hike in key policy rates. Minutes of MPC’s April meeting revealed how some members had signalled a more hawkish stance.
  • RBI sets rupee reference rate at 68.0883 against dollar
    May 21, 2018
    The Reserve Bank of India today fixed the reference rate of the rupee at 68.0883 against the US dollar and 79.9289 for the euro. The corresponding rates were 67.9577 and 80.2784, as on Friday 18th. According to an RBI statement, the exchange rates for the pound and the yen against the rupee were 91.4085 and 61.15 per 100 yens, respectively, based on reference rates for the dollar and cross-currency quotes at noon. The SDR-rupee figure will be based on this rate, the statement added.
  • Centre may ask RBI to ease prompt corrective action framework
    May 18, 2018
    The Centre may ask the Reserve Bank of India (RBI) to consider revising the prompt corrective action (PCA) framework so that a complete restriction on fresh lending does not affect credit flow to business, particularly small and medium enterprises. Piyush Goyal, who recently assumed charge as finance minister till Arun Jaitley recovers from an operation, held a review meeting with the top management of 11 public sector banks under the PCA framework on Thursday.
  • RBI issues final norms on net stable funding ratio
    May 18, 2018
    The Reserve Bank of India (RBI) on Thursday issued final guidelines on so-called net stable funding ratio (NSFR), to ensure banks have sufficient stable sources of funding to finance their activities over the long term. The concept of NSFR emerged in the aftermath of the global financial crisis, proposed by the Basel Committee on Banking Supervision to make banking sector more resilient.
  • RBI tweaks norms for setting up of IFSC Banking Units
    May 18, 2018
    Modifying the norms for setting up IFSC Banking Units, RBI said today that the parent bank will be required to provide and maintain at all times a minimum capital of USD 20 million to its IBU. In April 2015, the Reserve Bank had formulated a scheme for setting up of International Financial Services Centres (IFSC) Banking Units (IBUs) by banks in IFSCs. RBI said modification has been made based on suggestions from stakeholders to consider minimum prescribed regulatory capital at the parent level rather than at the IBU level.
  • RBI to the rescue with likely $15 billion bond-purchase to cap yields
    May 17, 2018
    Embattled investors in India’s government bond market are hoping to see the light at the end of the tunnel as the central bank comes to their rescue. Benchmark yields have likely peaked for 2018 after hitting a three-year high this week, and the Reserve Bank of India’s debt purchases will keep a lid on them even as higher inflation boosts the odds of monetary tightening, according to a survey of traders and fund managers.The RBI is likely to buy 1 trillion rupees ($15 billion) of securities in the current fiscal year, the survey showed, as authorities seek to cool yields and ensure a smooth passage for the government’s borrowing program.
  • RBI may go for three rate hikes from Dec quarter
    May 15, 2018
    The Reserve Bank of India is expected to begin its rate hike cycle from December quarter, and may go for three rate hikes by 2019 taking the key policy rate to 6.75 per cent. According to a Morgan Stanley report, a significant overshoot of inflation relative to RBI’s target is not likely. Moreover, the economic recovery will be on a surer footing by the fourth quarter of 2018 and this might prompt the central bank to go for a rate hike. “With end demand holding up well, private capex appears poised for a recovery later this year,” Morgan Stanley said in a research note.
  • RBI net buys $996 million from spot market
    May 15, 2018
    The Reserve Bank of India remained net purchaser of the US currency in March after it bought USD 996 million from the spot market. During the reporting month, the central bank purchased USD 3.328 billion dollars and sold USD 2.332 billion in the spot market, the latest RBI data showed.In February this year, RBI had bought USD 1.665 billion of greenback on a net basis, as it bought USD 3.320 billion and sold USD 1.655 billion in the spot market. RBI's intervention in the foreign exchange market is to curb volatility in the rupee and not to target a price band.
  • RBI's Support for Rupee Brings India Bond Bulls Little Relief
    May 14, 2018
    Bond investors are finding out that the Reserve Bank of India isn’t as generous as they thought. Sovereign debt declined for a third day Friday, wiping out gains fueled by the RBI’s May 4 decision to inject cash by buying bonds. The measure has failed to revive demand for debt as it simply restores the cash drained by the authority to prop up a sliding rupee, traders say. “The RBI could do more OMO purchases because of the run on the rupee,” said Vijay Sharma, executive vice president for fixed-income at PNB Gilts.
  • RBI's net buying of dollar from spot market declines in March to $996 mn
    May 12, 2018
    The Reserve Bank of India’s (RBI’s) net buying of the US dollar from the spot market declined in March to $996 million from $1.66 billion in February. The central bank purchased $3.32 billion from the spot market and sold $2,332 million in March. In the forward dollar market, the outstanding net forward purchase at the end of March was $20.85 billion. The net forward purchase at the end of February was $31.37 billion, according to the RBI’s monthly bulletin.
  • RBI could tap NRI bonds again to offset the crdue shock
    May 11, 2018
    RBI could tap NRI bonds again to offset the crdue shock:Report Mumbai, May 10 () To cushion the impact of rising crude prices that are set to increase further on the forex reserves, the Reserve Bank could go in for NRI bonds to the tune of USD 30-35 billion which will help it maintain the import cover at a comfortable level, says a report. In a report, analysts at Wall Street brokerage Bank of America Merrill Lynch today revised upwards their Brent forecast to USD 71.8 a barrel from the earlier USD 62.5 forecast for FY19, and to USD 75.3 from USD 60 a barrel for fiscal year 2020.
  • RBI curbs bring about crypto-to-crypto trade
    May 11, 2018
    India’s reluctance to allow buying and selling of bitcoins using banking channels has pushed the country’s three large cryptocurrency exchanges — Zebpay, Koinex and Zecoex — to offer its customers trading between virtual currencies on their platforms. Traditionally, all trade on cryptocurrency exchanges happen through banking channels to trade bitcoins and other cryptocurrencies. On April 6, the Reserve Bank of India mandated banks, e-wallets and payment gateway providers to withdraw support for cryptocurrency exchanges in three months.
  • Reserve Bank of India adds 3.1 tons of gold to forex reserves in Q4
    May 10, 2018
    The Reserve Bank of India has added 3.1 tons of gold to the reserves in the quarter ending in March in two tranches. This is the first addition since 2009 when RBI bought 200 tons from IMF at $1032 per ton.. According to IMF data (updated till March 2018), on gold as part of forex reserves, India’s forex reserves in gold stand at 560.3 tonnes. While RBI did not respond to queries about addition of gold to reserves on email, sources said that, “the addition looks like a pilot purchase. Net impact is that reserves are up marginally. This is not significant and does not imply strategic addition, unless we see a creeping acquisition trend.
  • RBI to banks: Share foreign exchange data with DRI
    May 05, 2018
    The Reserve Bank of India has asked banks authorised to deal in foreign exchange (Authorised Dealer-I Banks) to share data with the Directorate of Revenue Intelligence (DRI). This directive comes in the wake of the government making rules (in December 2017) to exercise powers conferred by the relevant sections of the Customs Act, requiring a banking company to furnish, electronically, information relating to foreign exchange transactions made or received by any person to the receiving authority (DRI).
  • RBI to infuse liquidity in bond market as forex reserve dips by $3.22 bn
    May 05, 2018
    The Reserve Bank of India (RBI) has moved to address pressure points in both currency and bond markets. The central bank’s foreign exchange reserves dipped by $3.22 billion in the week to 27 April, after having fallen by $2.5 billion in the week before, according to the RBI data. This is the sharpest fall in forex reserves since the week ended October 7, 2016, when the reserves had dipped by $4.3 billion.
  • Stripping/reconstitution of bonds made easier
    May 04, 2018
    The Reserve Bank of India on Thursday said it proposes to remove the restrictions on the securities eligible for stripping/reconstitution, as well as the requirement of authorisation of all requests in this regard by Primary Dealers (PDs). This move, according to the central bank, is aimed at meeting the diverse needs of investors and making Separate Trading of Registered Interest and Principal of Securities (STRIPS) more aligned with market requirements.
  • RBI allows foreign investors to invest in treasury bills
    May 03, 2018
    The Reserve Bank of India on Tuesday permitted foreign portfolio investors or FPIs to invest in treasury bills issued by the Central government. However, the investors will have to ensure that their exposure in government securities as well as corporate bonds of less than one year maturity shall not exceed 20 per cent of total investment. In case the investments in securities go beyond the fixed limit, then the FPIs will have to bring it down to 20 per cent within a period of six months, the RBI said in a notification issued on Tuesday.
  • RBI’s monetary policy relatively unaffected by global spillovers, says paper
    May 03, 2018
    The RBI’s monetary policy is largely insulated of global spillovers including most of the policy decisions made by the US Federal Reserve, an RBI occasional paper said. “Heightened sensitivity of foreign exchange and equity markets to global spillovers notwithstanding, there is no statistically strong evidence of domestic monetary policy losing traction because of global spillovers,” the paper by RBI staff said. The latest paper was part of the RBI Occasional Papers, in which central bank’s staff members contribute.
  • RBI paper points to sharp fall in rural wages since 2014
    May 02, 2018
    The rural economy appears to be under stress, going by the trends in rural wages, especially those of agricultural labourers. According to a Reserve Bank of India (RBI) study, there has been a “significant deceleration” in rural wages since 2014. Rural wage dynamics have an impact on inflation and overall economic growth. The RBI working paper, titled ‘Rural Wage Dynamics in India: What Role does Inflation Play?’, by Sujata Kundu, says rural wages saw high growth from FY08 to FY13, followed by significant deceleration.
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