News

The new restrictions are meant to encourage deposits of demonetised currency notes under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016. The   RBI   on Monday restricted deposits of demonetised Rs 500 and Rs 1,000 notes in excess of Rs 5,000 only once till December 30 -- after strict scrutiny. The new restrictions are meant to encourage deposits of demonetised currency notes under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016. In its notification, the Reserve Bank of India instructed all the banks to give full credit to demonetised notes over Rs 5,000 only in the case of accounts compliant with 'Know Your Customer' (KYC) norms If the accounts are not KYC compliant, then the credit for deposits of demonetised currencies will be restricted to Rs 50,000. Here is the full text of the RBI notification: RBI/2016-17/189 DCM (Plg) No. 1859/10.27.00/2016-17 December 19, 2016 The Chairman /...

The move is likely to curtail imports by the world's second-biggest gold consumer this month and could weigh on global prices already near their lowest level in ten months. ( Axis Bank branch closed during a raid by Income Tax officials in the Chandni Chowk in New Delhi ) Axis Bank , India's top importer of gold, has suspended the bank accounts of some bullion dealers and jewellers after two of its executives at a branch were arrested over alleged money laundering. The move is likely to curtail imports by the world's second-biggest gold consumer this month and could weigh on global prices already near their lowest level in ten months. "We have temporarily suspended transactions in a few current accounts as a part of a larger enhanced due diligence exercise being conducted on transactions post-demonetisation," the bank said in an e-mailed reply to questions from Reuters. Prime Minister Narendra Modi scrapped 500-rupee and 1,000-rupee banknotes on Nov....

Why PM Modi should ignore Subramanian Swamy's letter to sack Raghuram Rajan Subramanian Swamy, BJP’s newly nominated member to the Rajya Sabha, recently said that Reserve Bank of India governor   Raghuram Rajan   should be removed from his post. In a fresh salvo at Rajan, Swamy has written to Prime Minister Narendra Modi seeking immediate sacking of the former IMF Chief Economist while alleging he was "mentally not fully Indian" and has "willfully" wrecked the economy. Following up his barb against Rajan at the end of Parliament session last week, Swamy yesterday wrote to Prime Minister seeking termination of Rajan's services with immediate effect. According to Swamy, Rajan has hiked interest rates "in the garb of controlling interest inflation", which has "damaged the country", and that he was responsible for “unemployment and collapse of industrial activity". Read more.

The government is soon likely to announce rationalised interest rates on small savings schemes, enabling banks transmit the policy rate reduction by the Reserve Bank of India to borrowers.  Read Articles  

A  Reserve Bank of India  (RBI) committee on financial inclusion has suggested that the government should transfer cash directly to persons instead of giving subsidies, and should replace interest subvention on agriculture loans with affordable universal crop insurance scheme. The committee on medium-term path on financial inclusion, headed by RBI executive director Deepak Mohanty, also recommended linking credit accounts with unique identification number, or Aadhaar number, and share information with credit information companies to enhance stability of the credit system and improve access. The committee was set up in mid-July after Prime Minister Narendra Modi told RBI in its 80th anniversary that a road map should be built to include 90 per cent of India’s unbanked population in the financial fold. The group opined that the most efficient way for an effective financial inclusion is direct cash transfer. Presently, the government gives interest rate subvention of two pe...

Reserve Bank of India  (RBI) Governor Raghuram Rajan has called for closer monitoring of the threat to banks from weakening corporate performance and debt-servicing capabilities of leveraged business groups. “Corporate sector vulnerabilities and the impact of their weak balance sheets on the financial system need closer monitoring,” Rajan said, in his foreword to the Financial Stability Report (FSR) released on Wednesday by RBI on behalf of the Financial Stability Development Council (FSDC). PROJECTION OF SYSTEM LEVEL GNPA RATIOS All signs point to rising stress on bank books Share of large firms in bad loans going up Loans to infrastructure, steel, construction pose risk Banks resilient to withstand shocks backed by capital India Inc’s overall ability to repay debt, as measured by earnings relative to interest owed, improved in the months to September, but the report warned bad debt was becoming more concentrated among large, highly-leveraged borrowers. The pr...