RBI
RBI plans to introduce Digital Currency in India | 10 key points
The introduction of CBDC will create an India-centric legal and legitimate form of digital currency that will be on par with other already established cryptocurrencies, according to Deputy Governor of RBI T Rabi Sankar. Sankar further said that the central bank is working on a legal framework so that the CBDC can coexist with cash and digital payment methods in India.
RBI raises loan limit to Directors on bank boards to Rs 5 crore
In a circular issued on Friday, the central bank said that unless sanctioned by the Board of Directors or the Management Committee, banks should not grant loans and advances aggregating Rs 5 crore and above to any relative other than spouse and minor or dependent children of their own Chairmen and Managing Directors or other Directors. Same would be the rule in terms of relatives of Chairman or Managing Director or other directors of other banks.
RBI allows IDFC to exit IDFC First Bank
In a regulatory filing made to the BSE, IDFC said that the RBI on July 20 clarified that "after the expiry of lock-in period of 5 years, IDFC Limited can exit as the promoter of 'IDFC FIRST Bank Limited'" Accordingly, the company can now exit as promoter of IDFC First Bank, as the five year lock-in period has ended. The IDFC Bank was created by demerger of the infrastructure lending business of IDFC to IDFC Bank in 2015.
Several factors still hinder monetary transmission to bank rates: RBI
The RBI Bulletin for July 2021 noted that the central bank has made several attempts to improve the effectiveness of monetary transmission by refining the process of interest rates setting by banks. In response to the cumulative reduction of policy repo rate by 250 basis points, the one year median marginal cost of funds-based lending rate of SCBs declined 155 bps during February 2019 to June 2021.
RBL, Yes Bank, Bajaj Finserv most impacted by RBI curbs on Mastercard
Japanese brokerage Nomura said in a note that these three entities are the most impacted by the RBI move. HDFC Bank has 60 per cent of its card schemes tied to Mastercard, Amex and Diners, while for Axis Bank and ICICI Bank, this is about 35-36 per cent. "That said, we don't know the individual card schemes' contribution to overall profitability of the issuers to assess the potential impact," it added.
RBI Restriction: Martercard's loss may well be Visas' gain
Homegrown RuPay is also likely to benefit and grow its network further, experts said. The issuance of cobranded cards with Mastercard will also stop due to the RBI restriction. If a particular Mastercard cobranded credit card has high contribution to the overall mix of a credit card player, it will have a higher impact on the issuer's business growth, said an ICICI Securities report.
Indian economy to see 'substantial slack' in FY22 despite growth: RBI
The RBI Bulletin for July 2021 noted that the economy is struggling to regain the momentum of recovery that had started in the second half of 2020-21 but was interrupted by the second wave of Covid. "Even with a 9.5 per cent GDP growth in 2021-22, there will be substantial slack in the economy and demand pressures may take some more time to become evident," it said.
Financial inclusion priority for sustainable recovery: RBI Guv
The primary objective is to address the concerns relating to over-indebtedness of microfinance borrowers, enable market mechanism to rationalise the interest rates, and empower the borrowers to make an informed decision by enhancing transparency of loan pricing. "In order to make the post-pandemic recovery more inclusive and sustainable, financial inclusion would continue to be our policy priority," he said.
RBI proposes changes in fund raising norms of urban co-operative banks
The central bank released a draft circular for issue and regulation of share capital and securities of primary (urban) co-operative banks. "UCBs are permitted to raise equity share capital, as hitherto, by way of issue of equity shares to persons within their area of operation enrolled as members, in accordance with the provisions of their bye-laws, and issue of additional equity shares to the existing members," it said.
RBI imposes curbs on Mastercard over data storage
The RBI said that the restrictions have been imposed as in spite of lapse of considerable time and adequate opportunities being given, the entity has been found to be non-compliant with the directions on storage of Payment System Data. The supervisory action has been taken in exercise of powers vested in the RBI under Section 17 of the Payment and Settlement Systems Act, 2007 (PSS Act).
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