#RBI monetary policy update

[thehansindiaseo]

RBI Keeps Repo Rate at 6.5%, Changes Policy Stance to Neutral

RBI's MPC holds repo rate at 6.5% while shifting its policy stance to neutral, signaling future flexibility amid inflation concerns and economic growth projections.

[stupendouspaperfly]

Latest Current Affairs for APPSC

Staying updated with current affairs for APPSC is essential for cracking the Andhra Pradesh Public Service Commission (APPSC) exams. It helps aspirants prepare for the General Studies section, which plays a crucial role in scoring well. Here is a compilation of the latest current affairs relevant to APPSC.

Latest Current Affairs Relevant to APPSC

National News

Ram Temple Inauguration: The Ram Mandir in Ayodhya was inaugurated recently, marking a significant moment in Indian history. The event witnessed participation from dignitaries and religious leaders worldwide.

Interim Budget 2025: The Union Government presented the Interim Budget, focusing on infrastructure, employment, and economic growth. Key highlights include increased capital expenditure and support for MSMEs.

Andhra Pradesh State News

New Industrial Policy: The Andhra Pradesh government introduced a new Industrial Development Policy to boost investments and employment in the state.

Polavaram Project Update: The Polavaram irrigation project has reached another milestone, with the government allocating additional funds for its completion.

International News

India-UK Free Trade Agreement (FTA): India and the United Kingdom are in the final stages of signing a Free Trade Agreement, which is expected to strengthen economic ties.

COP29 Climate Summit: Global leaders discussed climate change policies and emission control strategies, impacting India's future environmental commitments.

Economy & Banking

RBI's Monetary Policy: The Reserve Bank of India (RBI) maintained the repo rate at 6.5%, focusing on controlling inflation while supporting economic growth.

Stock Market Growth: The Sensex and Nifty reached all-time highs due to strong investor confidence and economic recovery.

Science & Technology

ISRO’s Gaganyaan Mission: The Indian Space Research Organisation (ISRO) is progressing with its Gaganyaan mission, India's first human spaceflight project.

AI Policy Framework: The Indian government is working on an Artificial Intelligence (AI) Policy to regulate and promote AI innovations across industries.

Sports News

India’s Victory in Cricket: The Indian cricket team won the Asia Cup, strengthening its dominance in international cricket.

Olympics 2024 Preparations: Indian athletes are gearing up for the Paris Olympics 2024, with the government providing full support.

Conclusion

Current affairs for APPSC play a vital role in the APPSC exams. Aspirants should stay updated with national, state, and international events to excel in their preparation. Reading newspapers, watching news channels, and following reliable online sources can help in stay informed.

[news365timesindia]

[ad_1] By Anjali Sharma NEW YORK – According to a Motilal Oswal Private Wealth report released on Thursday.stated that India’s GDP growth is set to improve in the second half this year due to macroeconomic stability, supported by significant foreign exchange reserves and a regulated twin deficit The report expected India to be among the highest growing major economies despite the recent slowdown in growth. Indian markets are expected to remain volatile in the first half of 2025 due to several global and domestic events, including the new Donald Trump administration’s policies in the US. China’s measures to counter trade tariffs and its possible implications for emerging market currencies, and the upcoming Union budget. These events are anticipated to create uncertainty in the near term, the data said. The report stressed that the events unfold and greater clarity emerges, market volatility is expected to subside in the latter half of the year. Ashish Shanker, MD and CEO of MOPW said “The post-covid period has been extremely rewarding to equity investors driven by earnings growth, improving macros and domestic inflows into equities”. The year 2024 has been no different with broader markets doing extremely well. The mid cap and small cap segment have outperformed the large caps. Gold has also done well as an asset class. “The year 2025 will bring its share of uncertainty as the new US president gets sworn in. After years of good performance, the US markets also look tired. This calls for moderation in expectations and a sharp focus on risk management through asset allocation,” said Shanker. MOPW recommends closely monitoring the upcoming earnings season and GDP growth trajectory. “We expect this trend to reverse and expect large caps to do better this year given the valuation comfort. In the longer term, earning growth and stock returns should converge,” it suggested. The report added that despite potential short-term volatility, the medium-term outlook for Indian equities remains positive. This optimism is driven by several factors, including India’s stable macroeconomic environment, likely increase in government spending in the medium term and improving liquidity conditions and monetary stimulus by the RBI. The post India GDP growth to improve, market volatility to subside by mid year appeared first on Global Governance News- Asia's First Bilingual News portal for Global News and Updates. [ad_2] Source link

[news365times]

[ad_1] By Anjali Sharma NEW YORK – According to a Motilal Oswal Private Wealth report released on Thursday.stated that India’s GDP growth is set to improve in the second half this year due to macroeconomic stability, supported by significant foreign exchange reserves and a regulated twin deficit The report expected India to be among the highest growing major economies despite the recent slowdown in growth. Indian markets are expected to remain volatile in the first half of 2025 due to several global and domestic events, including the new Donald Trump administration’s policies in the US. China’s measures to counter trade tariffs and its possible implications for emerging market currencies, and the upcoming Union budget. These events are anticipated to create uncertainty in the near term, the data said. The report stressed that the events unfold and greater clarity emerges, market volatility is expected to subside in the latter half of the year. Ashish Shanker, MD and CEO of MOPW said “The post-covid period has been extremely rewarding to equity investors driven by earnings growth, improving macros and domestic inflows into equities”. The year 2024 has been no different with broader markets doing extremely well. The mid cap and small cap segment have outperformed the large caps. Gold has also done well as an asset class. “The year 2025 will bring its share of uncertainty as the new US president gets sworn in. After years of good performance, the US markets also look tired. This calls for moderation in expectations and a sharp focus on risk management through asset allocation,” said Shanker. MOPW recommends closely monitoring the upcoming earnings season and GDP growth trajectory. “We expect this trend to reverse and expect large caps to do better this year given the valuation comfort. In the longer term, earning growth and stock returns should converge,” it suggested. The report added that despite potential short-term volatility, the medium-term outlook for Indian equities remains positive. This optimism is driven by several factors, including India’s stable macroeconomic environment, likely increase in government spending in the medium term and improving liquidity conditions and monetary stimulus by the RBI. The post India GDP growth to improve, market volatility to subside by mid year appeared first on Global Governance News- Asia's First Bilingual News portal for Global News and Updates. [ad_2] Source link

[traderscircuit7676]

Secrets of Intraday Trading and Swing Investing in the Indian Stock Market

The Indian stock market is buzzing with activity, presenting endless opportunities for traders and investors. Whether you're diving into intraday trading strategies, utilizing a swing stock screener, or planning long-term investments, understanding the market's pulse is crucial. This blog provides actionable insights using current scenarios from the Indian stock market to help you make informed decisions.

Intraday Trading Strategies: Seizing Short-Term Market Movements

Intraday trading focuses on buying and selling stocks within a single trading session to capitalize on price fluctuations. Here's how to approach it in the Indian market:

1. News-Based Trading in the Banking Sector

The banking sector often witnesses high volatility during major announcements like the Reserve Bank of India’s (RBI) monetary policy updates.

Example: During the last RBI rate cut announcement, stocks like HDFC Bank and SBI showed significant price movements. Traders who entered positions during the pre-announcement buildup and exited after the news capitalized on sharp intraday gains.

Strategy: Use technical tools like Bollinger Bands and Relative Strength Index (RSI) to identify overbought or oversold conditions for optimal entry and exit points.

2. Scalping in High-Liquidity Stocks

Scalping involves taking advantage of small price changes in highly liquid stocks like Reliance Industries or Infosys.

Example: Reliance Industries recently saw rapid price swings during oil price volatility, offering multiple scalping opportunities within hours.

Strategy: Focus on 5-minute charts and set strict stop-loss levels to minimize risks.

Swing Stock Screener: Spotting Mid-Term Opportunities

Swing trading bridges the gap between intraday trading and long-term investing. A swing stock screener helps identify stocks poised for short-to-medium-term price moves.

1. Riding Sectoral Trends in Renewable Energy

India’s renewable energy sector is gaining momentum, with stocks like Adani Green and Tata Power seeing increased investor interest.

Example: Tata Power recently rebounded from a key support level and showed a 15% rally over two weeks, ideal for swing traders.

Screener Criteria: Look for stocks with RSI above 60, trading near 52-week highs, and high trading volumes.

2. Earnings Momentum in IT Stocks

Quarterly earnings releases often drive stock momentum for days or weeks.

Example: Infosys posted better-than-expected earnings last quarter, resulting in a steady uptrend for two weeks. Swing traders who identified the breakout earned substantial returns.

Screener Criteria: Filter stocks with strong earnings growth, positive price momentum, and bullish technical patterns like flag or cup-and-handle formations.

Stock Market Investment Tips: Building Long-Term Wealth

Investing in the stock market requires patience and a clear strategy. Here are some tips to navigate the current Indian market environment:

1. Focus on Emerging Sectors

Example: The government’s push for infrastructure development and green energy has created opportunities in stocks like L&T and NTPC.

Tip: Allocate a portion of your portfolio to high-growth sectors like renewables, infrastructure, and technology for potential long-term gains.

2. Adopt a Balanced Portfolio Approach

Example: Combine high-growth stocks like Adani Enterprises with defensive bets like ITC, which offers consistent dividends and stability.

Tip: Diversify across sectors to mitigate risks and ensure steady returns even during market volatility.

3. Leverage SIPs for Consistent Investments

Systematic Investment Plans (SIPs) in mutual funds remain a preferred choice for retail investors in India.

Example: SIPs in equity-focused funds linked to the Nifty50 index have delivered consistent returns over the past five years.

Tip: Start SIPs in index or sectoral funds to build wealth steadily over time.

Conclusion: Navigating the Indian Stock Market

Success in the Indian stock market lies in adapting to its dynamic nature.

For short-term traders, intraday trading strategies like news-based trading and scalping offer quick returns.

Mid-term investors can use a swing stock screener to identify trending stocks in promising sectors.

Long-term investors should focus on diversification, SIPs, and high-growth opportunities in emerging sectors.

By combining these strategies with insights from the current market, you can make informed decisions and achieve your financial goals. Whether you're a trader or an investor, the Indian stock market has something to offer everyone

[businessviewpointmag]

Retail Inflation Eases in November Amid Cooling Food Prices

https://businessviewpointmagazine.com/wp-content/uploads/2024/12/Retail-Inflation-Eases-in-November-Amid-Cooling-Food-Prices-Source-economictimes.com_.jpg

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Source: economictimes.com

India’s retail inflation eased to 5.48% in November, down from 6.21% in October, marking a significant reduction after reaching a 14-month high. The decline was primarily driven by cooling food prices, with food inflation moderating to 9% in November compared to 10.9% in the previous month. Vegetable inflation, a key contributor to elevated consumer prices, dropped sharply from 42% in October to 29% in November. Excluding vegetables, overall inflation stood at 3.9%, comfortably below the Reserve Bank of India’s (RBI) lower threshold of 4%.

Rajani Sinha, Chief Economist at CareEdge, noted, “The moderation in vegetable prices played a crucial role in bringing down the inflation rate. The November data aligns with the projected 5.5% median forecast from various analysts.” Despite this decline, inflation remains above 5% for the third consecutive month, presenting challenges for the RBI as it navigates monetary policy decisions.

Policy Challenges Ahead

The persistent inflationary pressures pose a dilemma for the RBI’s Monetary Policy Committee (MPC), which maintained the policy rate unchanged for the 11th consecutive time during its December meeting. Experts predict inflation will remain above 5% in December, complicating decisions on interest rates in February 2025.

Madan Sabnavis, Chief Economist at Bank of Baroda, commented, “With India’s retail inflation expected around 5.4% in December, the central bank will face a tough call on rates in February. However, a higher base effect from categories like pulses, fruits, and spices may aid in further cooling inflation in early 2025.”

Paras Jasrai, Senior Analyst at India Ratings and Research, added that core inflation was largely stable at 3.6% in November. He emphasized that demand conditions are unlikely to change significantly through December, indicating a steady trajectory for core inflation in the near term.

The RBI has already revised its annual inflation forecast upward from 4.5% to 4.8% following October’s higher-than-expected reading. However, analysts remain optimistic about inflation easing further in 2025.

Food Prices and Future Trends

Despite overall improvements, certain food categories continued to exhibit high inflation rates in November. Potatoes recorded a staggering 66.6% inflation, up from 64.9% in October, while garlic inflation remained over 80%. Carrots and pulses also saw double-digit inflation, highlighting the uneven nature of price moderation.

The personal care and effects category, influenced by rising gold and silver prices, contributed to core inflation staying elevated in November. Experts suggest that favorable monsoon conditions and improved agricultural output could further stabilize food prices, supporting the RBI’s inflation management efforts.

Looking ahead, the Asian Development Bank forecasts consumer inflation to decline to 4.3% by FY26, down from its earlier projection of 4.5%. If headline inflation falls to 5% or lower by December 2024, economists anticipate the MPC may consider rate cuts in early 2025. Aditi Nayar, Chief Economist at ICRA, stated, “We expect two rate cuts of 25 basis points each in the upcoming easing cycle, contingent on continued moderation in inflation.”

As food prices stabilize and India’s retail inflation shows signs of further cooling, policymakers and consumers alike remain hopeful for sustained economic relief in the months ahead.

Did you find this article helpful? Visit more of our blogs! Business Viewpoint Magazine

[f2aditya]

RBI Monetary Policy Highlights

The Reserve Bank of India (RBI) held the repo rate steady at 6.5% in its December 6, 2024, monetary policy meeting, maintaining a neutral stance. To boost liquidity, the Cash Reserve Ratio (CRR) was cut by 50 basis points to 4%, releasing ₹1.16 lakh crore into the system. The FY25 GDP growth forecast was revised downward to 6.6% from 7.2%, while CPI inflation for FY25 was raised to 4.8% from 4.5%. Quarterly projections indicate slight moderation, with Q4FY25 GDP growth at 7.2% and inflation at 4.5%.

Key policy updates include an increase in the agricultural loan limit to ₹2 lakh and a framework for Responsible AI in Finance. The CRR reduction is expected to stabilize yields and address liquidity concerns. Market experts predict easing inflation and improved financial stability in the coming quarters. Read More :- https://www.linkedin.com/feed/update/urn:li:activity:7271011292130242560

[jarvis-invest]

Discover the latest RBI Monetary Policy updates, including key decisions on repo rates, inflation, liquidity management, and growth outlook. Learn how these changes impact sectors like banking, real estate, and AI-driven technology.

[kgsupsccourses]

Daily Current Affairs for UPSC - Stay Updated with KGS IAS

Staying updated with daily current affairs is essential for cracking the UPSC examination. With KGS IAS, we provide a streamlined approach to help you stay on top of the most relevant topics. Here’s a breakdown of today’s significant events that you need to know.

National News Highlights

The Indian government recently introduced a new economic policy aimed at strengthening the small and medium enterprises (SMEs) sector. This policy focuses on providing financial aid and infrastructure support to SMEs, promoting entrepreneurship. Candidates preparing for UPSC should focus on the potential impacts this policy might have on employment and economic growth.

In addition, the Supreme Court of India passed a landmark judgment on environmental protection, emphasizing stricter regulations for industries to reduce pollution levels. This is crucial for the Environment and Ecology portion of the UPSC syllabus.

International Relations Update

India and Japan held a bilateral meeting to discuss regional security and economic cooperation. The growing partnership between these two nations is pivotal for maintaining stability in the Indo-Pacific region. UPSC aspirants should pay attention to the strategic importance of this alliance and its relevance to India’s foreign policy.

The UN General Assembly also adopted a resolution on climate change, which India supported. This move underscores the country's commitment to global climate efforts. Understanding India's role in international organizations is vital for aspirants.

Economic Affairs and Finance

The Reserve Bank of India (RBI) recently made adjustments to the repo rate to control inflation. Monitoring the trends in India’s monetary policies will provide insights into the Indian Economy segment of the UPSC exam.

Additionally, a new report highlights that India's GDP growth is expected to rise in the coming quarter due to increased foreign investments. Aspirants should focus on understanding how these trends influence government spending and fiscal policies.

Science and Technology Developments

India successfully launched a new satellite aimed at improving communication networks across the country. The launch is significant for the advancement of telecommunication and digital services, which have been areas of major focus for the government.

For Science and Technology in UPSC, keep track of such technological advancements, especially those related to space exploration and digital transformation.

Environment and Ecology

The Ministry of Environment announced new conservation projects for endangered species in the Western Ghats. This initiative will focus on preserving biodiversity while promoting sustainable development in the region.

Understanding the balance between conservation efforts and development is critical for the Environment and Ecology section of the UPSC syllabus.

Conclusion

Daily current affairs play an essential role in shaping your preparation for the UPSC exam. By focusing on relevant national, international, economic, and environmental news, you can stay updated and ensure a comprehensive understanding of critical issues. Rely on KGS IAS for a detailed breakdown of daily news and events to boost your preparation and achieve success in the UPSC.

[avisionins]

Why Understanding Banking Topics Forms the Backbone of Success?

Introduction:

In today's competitive world, one needs to understand various banking topics if a candidate aspires to crack the banking exams. Be it the best banking coaching in Kolkata or self-study, a candidate who masters the basics of different types of banking concepts stands a better chance of succeeding at the exams.

The Base of Banking Exams

Banking exams test one's knowledge in financial systems, economic principles, and functioning banks. There will usually be sections on general awareness, quantitative aptitude, reasoning ability, and, most important of all, banking awareness. The banking awareness section will contain questions on monetary policies, banking regulations, the role of central banks, and new and emerging developments in the financial sector.

You have to understand these topics not just for the sake of the exam but also to comprehend your future role in banking. The role of the banker incorporates the management of financial transactions, understanding the economic indicators, reaching wise decisions. If you do not have a strong understanding of banking topics, you might find it hard to perform well in the career.

How Coaching Helps

For most aspirants, joining a coaching institute makes all the difference in one's preparation. Banking coaching in Kolkata aids by offering a systematic approach toward learning and aiding students with experienced faculty members, comprehensive study material, and regular mock tests. These resources help build a strong foundation in banking topics and ensure that they are well prepared for the exam.

The coaching institutes also provide individual guidance as to which sectors a student is good or bad at. This focused approach would allow him to spend more time on the section where he is weak, increasing the chances of his selection by many folds.

Key Banking Topics to Focus On

As mentioned earlier, a candidate should focus on topics that have frequently appeared in banking exams. These include:

Monetary Policy: Very important to understand how money supply and rate of interest has been managed by RBI. 

Banking Regulations: Regulations such as Basel norms, RBI model, anti money laundering are crucial to understand. The system can afford stability and safety with this process.

Financial Markets: The way in which financial markets, like stock exchanges, the bond market, and foreign exchange markets, operate has relevance in a finance context. Questions are asked to assess how a person understands the money flow in an economy.

Recent Developments: One stays updated with the latest happenings in the Banking industry, such as merger and acquisition, new financial products, and technology. These types of questions are asked many a time in the general awareness section.

The Role of Practice

While one has to understand the concepts related to banking, practice becomes equally important. Mock tests and practice papers help you in applying knowledge and improving speed and accuracy. They also enable one to get accustomed to the exam pattern. Many institute will come and go but the efforts of "Avision Coaching" is priceless because of its efforts, test series, question banks for practice and build confidence.

The role of the base banking coaching like "Avision Institute" sealed with top faculties to gain more knowledge and solve issues. Group studies and discussions are effective in deepening understanding and having more retention power in memory.

Conclusion:

The key to success in banking exams is a deep understanding of the topics of banking. Whether you're aiming at the best coaching for banking or doing it yourself, basic concepts along with recent developments will always give additional advantages. If you have the right knowledge and guidance, coupled with ample practice, then you can get much more than just clearing the exam--you will have a very successful career ahead in the banking industry.

[arena-nikita]

Predicting SRG Housing Finance Interest Rate Changes

In today's dynamic financial landscape, securing a home loan with a favorable interest rate is a top priority for many. SRG Housing Finance is a prominent player in the market, but will their interest rates change soon? This blog explores the factors that influence interest rate fluctuations and equips you with strategies to make informed decisions regarding your SRG Housing Finance loan.

Understanding Interest Rate Movement: A Complex Equation

Predicting the exact timing and direction of SRG Housing Finance rate of interest changes is challenging. Multiple factors contribute to this movement:

Macroeconomic Conditions: The overall health of the Indian economy, including inflation rates and GDP growth, significantly impacts interest rates. A strong economy often leads to higher interest rates, while a slowdown might trigger reductions.

RBI Monetary Policy: The Reserve Bank of India (RBI) plays a critical role in regulating interest rates. The RBI's repo rate, the rate at which it lends to banks, directly influences lending rates offered by institutions like SRG Housing Finance.

Liquidity in the Banking System: The availability of funds in the banking system impacts interest rates. When there's ample liquidity, interest rates tend to be lower, and vice versa.

Competition in the Housing Finance Market: The competitiveness of the housing finance market plays a role. If other lenders offer significantly lower rates, SRG Housing Finance might have to adjust their rates to remain competitive.

Limited Predictive Power: Transparency is Key

While predicting specific interest rate changes is difficult, SRG Housing Finance prioritizes transparency. Here's what you can do:

Review SRG Housing Finance Policy Documents: SRG Housing Finance outlines its interest rate setting process and review schedule in their policy documents, publicly. This document specifies that the interest rate models, base rate, and other charges are reviewed periodically by their Asset Liability Management Committee (ALCO) with recommendations made to the Board. The date of the last board meeting reviewing these rates is also usually mentioned in the document. By staying updated on the latest board meeting dates and reviewing these policy documents, you can gain insights into potential upcoming reviews that might lead to interest rate adjustments.

Monitor Industry Trends: Keep yourself informed about broader economic trends, RBI policy announcements, and movements in interest rates offered by other housing finance companies. This awareness equips you to make informed decisions about your SRG Housing Finance loan.

Strategies to Secure a Favorable Rate:

Even with potential future changes, here's how you can position yourself for a favorable SRG Housing Finance interest rate:

Maintain a High Credit Score: A strong credit score significantly increases your chances of securing a lower interest rate.

Negotiate Terms: While interest rates might be predetermined, explore negotiating processing fees or other charges with SRG Housing Finance, especially if you have a strong credit score or a sizable down payment.

Compare with Other Lenders: Don't limit yourself to SRG Housing Finance. Research and compare interest rates offered by other lenders in the market. This empowers you to choose the most competitive option available.

Consider a Fixed or Floating Rate Loan: SRG Housing Finance might offer fixed and floating-rate loan options. Evaluate your risk tolerance and choose the option that best aligns with your financial goals and market predictions.

Conclusion

Predicting the exact timing and direction of SRG Housing Finance interest rate changes is challenging. However, by understanding the influencing factors, staying informed, and employing strategic planning, you can make well-rounded decisions. Remember, a strong credit score, negotiating skills, and comparing loan options empower you to secure the most favorable SRG Housing Finance interest rate for your home loan needs. So, stay informed, explore your options, and embark on your homeownership journey with confidence!

[news365timesindia]

[ad_1] Paromita Das GG News Bureau New Delhi, 28th Dec. A Reversal of Opinions: Raghuram Rajan, the former Governor of the Reserve Bank of India (RBI), has been a vocal critic of the Modi government during his tenure at the central bank. His frequent disagreements with the government, particularly over monetary policies and handling of the economy, earned him the tag of being a “darling of the opposition.” However, in a surprising turn of events, Rajan recently lauded the Modi administration for its effective management of Non-Performing Assets (NPAs), a key challenge for the Bharatiya banking system. This unexpected praise comes after years of sharp criticisms and is worthy of scrutiny, considering Rajan’s pivotal role in the banking reforms during his tenure at RBI. Understanding the NPA Crisis: The Historical Context: To comprehend the significance of Rajan’s recent remarks, it is essential to revisit the context of Bharat’s NPA crisis. NPAs are loans that have gone unpaid for an extended period, and their rise in the Bharatiya banking system has been a long-standing issue, primarily beginning after the global financial crisis of 2008. Rajan noted that projects funded by banks before the crisis started facing significant setbacks post-2008 due to factors such as corruption, delays in permits, and mismanagement. These factors caused a steep rise in NPAs, especially in public sector banks. Rajan’s 2015 Asset Quality Review (AQR) was a watershed moment in addressing this crisis. The AQR helped to clean up the balance sheets of banks by ensuring that bad loans were promptly identified, with the necessary provisioning made. According to Rajan, this was crucial for alleviating the growing financial insecurity surrounding public sector banks. He recalled how he took his proposal for an AQR and the end of the moratorium on bad loans to Arun Jaitley, the then Finance Minister, who approved it without hesitation. This marked a turning point in the fight against NPAs. The Modi Government’s Response, A Shift in NPA Management: Rajan’s praise for the Modi government’s handling of NPAs aligns with recent updates from Finance Minister Nirmala Sitharaman. According to her, between 2014 and 2023, the government’s initiatives helped recover more than ₹10 lakh crores from bad loans. The gross NPA ratio fell to a 12-year low of 2.8 percent by the end of the fiscal year 2024. These figures are a direct reflection of the government’s ongoing efforts to manage bad loans and prevent further escalation of the NPA crisis. Rajan acknowledges that the implementation of AQR was a pivotal step. However, the Modi government’s broader policy initiatives played a crucial role in reducing NPAs over time. One of the most significant steps was the introduction of the Insolvency and Bankruptcy Code (IBC) in 2016. This law gave authorities the power to take control of defaulting companies from their promoters, thereby protecting the interests of creditors. Additionally, wilful defaulters were barred from participating in the resolution process, ensuring that there would be greater accountability. Additional Measures to Tackle NPAs: Alongside the IBC, the government took several other steps to address the NPA issue. One such measure was the amendment to the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (SARFAESI Act) of 2002, allowing banks to auction the assets of defaulters. This was complemented by the establishment of the National Asset Reconstruction Company Limited (NARCL) to resolve stressed assets over ₹500 crore. The government also provided a ₹30,600 crore guarantee to back NARCL’s receipts, further enhancing the efficiency of the recovery process. Public sector banks were also restructured through the establishment of Stressed Asset Management Verticals, such as the one in the State Bank of India (SBI), to manage and recover loans more effectively. These verticals allowed banks to monitor loans more closely, ensuring that any potential defaults were caught early.

Moreover, the RBI implemented a system of Early Warning Signals (EWS) to trigger timely remedial actions for loans at risk of default. A Positive Outlook: Rajan’s Acknowledgment: Raghuram Rajan’s acknowledgment of the Modi government’s success in reducing NPAs is notable, especially considering his earlier critiques. He conceded that the government’s approach, including the AQR, the IBC, and other reforms, helped set the stage for the reduction in bad loans. As he put it, “Eventually the situation is back on track,” signifying a recovery after years of financial distress. Rajan’s perspective carries weight given his experience and expertise in managing the Bharatiya economy, and his remarks add credibility to the government’s claims of progress. Conclusion: The Long Road Ahead: While the reduction in NPAs under the Modi government is a significant achievement, experts agree that the work is far from over. The underlying issues that contribute to the creation of bad loans—such as poor project planning, delays in clearances, and systemic corruption—continue to be challenges for Bharat’s banking sector. Therefore, while Rajan’s praise is deserved, it also highlights the complexity of tackling NPAs and the need for continued vigilance. The government’s strategy of combining regulatory reforms, legal frameworks, and institutional restructuring has certainly yielded results. Yet, with Bharat’s banking sector still grappling with certain vulnerabilities, it is essential to keep refining these measures. Raghuram Rajan’s shift in stance reflects a recognition of these efforts, providing a balanced view of the Modi government’s handling of one of the most significant financial challenges in Bharat’s economic history.   The post Raghuram Rajan’s Remark on Modi Government’s NPA Management: A Shift in Perspective appeared first on Global Governance News- Asia's First Bilingual News portal for Global News and Updates. [ad_2] Source link

[news365times]

[ad_1] Paromita Das GG News Bureau New Delhi, 28th Dec. A Reversal of Opinions: Raghuram Rajan, the former Governor of the Reserve Bank of India (RBI), has been a vocal critic of the Modi government during his tenure at the central bank. His frequent disagreements with the government, particularly over monetary policies and handling of the economy, earned him the tag of being a “darling of the opposition.” However, in a surprising turn of events, Rajan recently lauded the Modi administration for its effective management of Non-Performing Assets (NPAs), a key challenge for the Bharatiya banking system. This unexpected praise comes after years of sharp criticisms and is worthy of scrutiny, considering Rajan’s pivotal role in the banking reforms during his tenure at RBI. Understanding the NPA Crisis: The Historical Context: To comprehend the significance of Rajan’s recent remarks, it is essential to revisit the context of Bharat’s NPA crisis. NPAs are loans that have gone unpaid for an extended period, and their rise in the Bharatiya banking system has been a long-standing issue, primarily beginning after the global financial crisis of 2008. Rajan noted that projects funded by banks before the crisis started facing significant setbacks post-2008 due to factors such as corruption, delays in permits, and mismanagement. These factors caused a steep rise in NPAs, especially in public sector banks. Rajan’s 2015 Asset Quality Review (AQR) was a watershed moment in addressing this crisis. The AQR helped to clean up the balance sheets of banks by ensuring that bad loans were promptly identified, with the necessary provisioning made. According to Rajan, this was crucial for alleviating the growing financial insecurity surrounding public sector banks. He recalled how he took his proposal for an AQR and the end of the moratorium on bad loans to Arun Jaitley, the then Finance Minister, who approved it without hesitation. This marked a turning point in the fight against NPAs. The Modi Government’s Response, A Shift in NPA Management: Rajan’s praise for the Modi government’s handling of NPAs aligns with recent updates from Finance Minister Nirmala Sitharaman. According to her, between 2014 and 2023, the government’s initiatives helped recover more than ₹10 lakh crores from bad loans. The gross NPA ratio fell to a 12-year low of 2.8 percent by the end of the fiscal year 2024. These figures are a direct reflection of the government’s ongoing efforts to manage bad loans and prevent further escalation of the NPA crisis. Rajan acknowledges that the implementation of AQR was a pivotal step. However, the Modi government’s broader policy initiatives played a crucial role in reducing NPAs over time. One of the most significant steps was the introduction of the Insolvency and Bankruptcy Code (IBC) in 2016. This law gave authorities the power to take control of defaulting companies from their promoters, thereby protecting the interests of creditors. Additionally, wilful defaulters were barred from participating in the resolution process, ensuring that there would be greater accountability. Additional Measures to Tackle NPAs: Alongside the IBC, the government took several other steps to address the NPA issue. One such measure was the amendment to the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (SARFAESI Act) of 2002, allowing banks to auction the assets of defaulters. This was complemented by the establishment of the National Asset Reconstruction Company Limited (NARCL) to resolve stressed assets over ₹500 crore. The government also provided a ₹30,600 crore guarantee to back NARCL’s receipts, further enhancing the efficiency of the recovery process. Public sector banks were also restructured through the establishment of Stressed Asset Management Verticals, such as the one in the State Bank of India (SBI), to manage and recover loans more effectively. These verticals allowed banks to monitor loans more closely, ensuring that any potential defaults were caught early.

Moreover, the RBI implemented a system of Early Warning Signals (EWS) to trigger timely remedial actions for loans at risk of default. A Positive Outlook: Rajan’s Acknowledgment: Raghuram Rajan’s acknowledgment of the Modi government’s success in reducing NPAs is notable, especially considering his earlier critiques. He conceded that the government’s approach, including the AQR, the IBC, and other reforms, helped set the stage for the reduction in bad loans. As he put it, “Eventually the situation is back on track,” signifying a recovery after years of financial distress. Rajan’s perspective carries weight given his experience and expertise in managing the Bharatiya economy, and his remarks add credibility to the government’s claims of progress. Conclusion: The Long Road Ahead: While the reduction in NPAs under the Modi government is a significant achievement, experts agree that the work is far from over. The underlying issues that contribute to the creation of bad loans—such as poor project planning, delays in clearances, and systemic corruption—continue to be challenges for Bharat’s banking sector. Therefore, while Rajan’s praise is deserved, it also highlights the complexity of tackling NPAs and the need for continued vigilance. The government’s strategy of combining regulatory reforms, legal frameworks, and institutional restructuring has certainly yielded results. Yet, with Bharat’s banking sector still grappling with certain vulnerabilities, it is essential to keep refining these measures. Raghuram Rajan’s shift in stance reflects a recognition of these efforts, providing a balanced view of the Modi government’s handling of one of the most significant financial challenges in Bharat’s economic history.   The post Raghuram Rajan’s Remark on Modi Government’s NPA Management: A Shift in Perspective appeared first on Global Governance News- Asia's First Bilingual News portal for Global News and Updates. [ad_2] Source link

[best-news-report]

Stay informed on the latest updates and insights into the RBI Monetary Policy 2024. Explore key decisions, market impacts, and economic forecasts from the Reserve Bank of Indias latest monetary policy announcement.

[sanjana-s]

RBI Monetary Policy updates - Repo rate unchanged at 6.50%

The Reserve Bank of India's Monetary Policy Committee (MPC) recently announced its decision to maintain key interest rates at 6.50%, aligning with market expectations. The policy stance remains at 'withdrawal of accommodation', indicating a cautious approach towards economic support measures.

The MPC's decision was supported by a 5:1 majority vote, highlighting a broad consensus among members. This move was largely anticipated by economists and experts, who welcomed the decision as a prudent step by the central bank.

Economists believe that the RBI has ample room to keep the repo rate unchanged, especially given the robust GDP growth forecast of 7% for FY25. This strong growth outlook, coupled with the central bank's commitment to targeting a 4% inflation rate, suggests that any future rate cuts are likely to be gradual and measured.

However, analysts point out that the timing of rate cuts may be influenced by external factors, such as the US Federal Reserve's (Fed) monetary policy stance. Many expect that the RBI will wait for the Fed to initiate its rate cut cycle before considering similar actions in India.

Looking ahead, the RBI's focus on financial stability is expected to remain paramount. This could mean that in certain circumstances, ensuring stability in the financial system may take precedence over managing inflation.

The GDP growth forecast for FY25, pegged at 7%, reflects the RBI's confidence in the economy's resilience and recovery. Growth projections for the June and September quarters stand at 7% and 6.9% respectively, with expectations of sustained growth momentum in the third and fourth quarters as well.

The MPC's decision to maintain status quo on policy rates and stances in its last review meeting, held in February 2024, underscores the central bank's commitment to a cautious and balanced approach towards monetary policy.

In conclusion, the RBI's decision to keep key rates unchanged reflects a balanced assessment of the current economic landscape, with an eye towards supporting growth while ensuring financial stability. The central bank's future actions are likely to be guided by a combination of domestic economic indicators and global developments, particularly the trajectory of the US Fed's monetary policy.

[divisional-news]

Expectations for RBI's First FY25 Meeting: Likely Reasons for Keeping Repo Rate Unchanged

As the Reserve Bank of India (RBI) gears up for its first Monetary Policy Committee (MPC) meeting of the financial year 2024-25 in April, all eyes are on the potential decisions regarding the repo rate and monetary policy stance. Here's a breakdown of what to expect and why the central bank may opt to maintain the status quo.

Forecast and Outlook: Deutsche Bank's projections suggest that the RBI might uphold its FY25 CPI inflation forecast at 4.5%, while possibly revising upward the growth forecast for the next fiscal year to 7.4% from the current 7%.

Steady Repo Rate Anticipated: Market analysts widely predict that the MPC will choose to keep the repo rate unchanged at 6.5%. This expectation is grounded in the backdrop of seven consecutive meetings where the rate has remained stagnant following a 25-basis point hike in February 2023.

Cautionary Approach: The RBI is likely to exercise caution due to persistent risks to food inflation, which could have repercussions on the consumer price index (CPI) or retail inflation. The mandate to maintain inflation at 4% with a comfort band of 2% in both directions necessitates a vigilant stance until durable achievement of the target.

Monetary Policy Stance: While the prevailing stance of 'withdrawal of accommodation' is expected to persist, there's speculation among analysts about a potential shift to a 'neutral' stance. This adjustment could hinge on various factors, including past instances of RBI's surprising decisions.

Projections and Forecasts: Deutsche Bank's projections indicate a likely unchanged CPI inflation forecast for FY25 at 4.5%, while the growth forecast for the next fiscal year might witness an upward revision to 7.4%. These estimates provide insights into the RBI's outlook on the economic trajectory.

Impact on Lending Rates: In the event of an unchanged repo rate, lending rates linked to external benchmark lending rates (EBLR) will likely remain stable, offering relief to borrowers. However, there might be a possibility of interest rate adjustments on loans linked to the marginal cost of fund-based lending rate (MCLR).

Future Rate Cuts: Forecasts by Goldman Sachs suggest potential rate cuts of 25 basis points each in the third and fourth quarters of the 2024 calendar year, indicating a forward-looking approach by the central bank.

As the financial landscape evolves, the decisions taken by the RBI during its upcoming meeting will have far-reaching implications for various stakeholders. Stay tuned for updates on the monetary policy trajectory and its impact on the economic landscape.