In the week gone by, banking sector was relatively less buzzing than the previous weeks as smaller news trends of non-performing assets (NPAs) and retail segment, interest rate reduction by banks and push by the Reserve Bank gained focus
RBI reduced the repo rate by 0.25 per cent to 6 per cent earlier this month, citing reduction in inflation risk. The rate cut was the first in 10 months and brought policy rates to near 7-year low.
According to the Japanese financial services major, the MPC minutes suggest low inflation and growth concerns led to policy easing earlier this month, and going ahead the RBI is expected to stay on hold.
Customers with savings bank account balance of Rs 5 million ($77,924.10) and above will continue to earn interest at 4 percent per annum, the lender said in a statement.
Of the 6 members of MPC headed by Patel, four favoured a 25 bps rate reduction, Ravindra Dholakia voted for a 50 bps reduction while Michael Debabrata Patra voted for status quo.
The note comes two days after data showed that headline consumer price inflation (CPI) almost doubled to 2.36 per cent for July from 1.54 per cent in the previous month, and a day after the wholesale price inflation also shot up to 1.54 per cent from being negative in the previous month.
The relaxation will be subject to certain conditions, including shareholders' approval of the stake acquisition by way of special resolution.
"Given the trend and outlook for inflation, we see clear space for a more accommodative stance in the monetary policy. This is all the more important given the state of industrial sector where growth is anaemic.
The consumer price index, the main policy target of the Reserve Bank of India (RBI), likely rose 1.87 percent in July from a year earlier, according to a Reuters poll of economists, compared with an increase of 1.54 percent in June.
The central bank further said the currency printing presses are equipped with state-of-the-art machinery, documented systems and technically qualified personnel through which quality control is ensured at each stage of banknote production.
Tri-party repo is a type of repo agreement where a third entity acts as an intermediary between two parties
Policy repo rate cut in October 2016 by 25 bps led to a fall in the base lending rate of banks by only 5 bps and that too after a lag of a quarter but term deposit rates were cut by 50 bps in the same month
Foreign investments into debt and shares have reached a net $31 billion this year, compared with $2.7 billion in sales last year, due to factors including India's low inflation and improving economic growth.
ICICI Bank had written off the highest amount of loans at Rs 15,175 crore in FY17, while HDFC Bank and Axis Bank had written off Rs 2,386 crore and Rs 2,222 crore, respectively
The credit limit for the customers is up to Rs 4 lakh based on pre-checked bureau scores. As on June end, ICICI Bank's number of outstanding credit cards stood at 43.46 lakh, below HDFC Bank and State Bank of India.
The Competition Commission of India (CCI), in May, received a complaint alleging cartelisation among banks in respect of providing locker services to customers. "The case has been registered... arraigning 20 banks, including RBI, as opposite parties," the minister said.
Higher provision requirement for banks on the cases under IBC would be a painful pill to digest.
State Bank of India cut deposit rates on savings accounts for the first time below 4 percent, while Reserve Bank of India reduced key policy interest rates to lowest in over 6 years
Lending rate cuts typically follow a deposit rate reduction. Previously, large lenders have usually matched the rate set by SBI in both deposit and lending rates.
We believe if core inflation surprises on the downside and settles below 4 percent RBI can reduce rates by another 25bps.
Replying to a debate on the Banking Regulation (Amendment) Bill, 2017, Jaitley said the Reserve Bank has already identified top 12 loan defaulters and more cases will be taken up by them for resolution.
"Slowly interest rates will become reasonable," he said in the Lok Sabha while replying to a debate on the Banking Regulation (Amendment) Bill, 2017.
It expects the impact of demonetisation to completely wane away in the next two quarters. The company was impacted by the move as it delayed the repayments by its borrowers, substantially
We expect the RBI to be cautious and on a pause for the rest of FY2018. Room for any further rate cut will possibly open up if inflation continues to surprise on the downside and well below the 4 percent mark.
Technical Analyst Prakash Gaba of prakashgaba.com is of the view that crucial support for the Nifty is at 10000-9968 and the resistance is at 10149-10260-10536. Bank Nifty on the other hand has support at 24750 and resistance at 25250.