Banking sector news & PSU Bank Updates

Banking Central | Will rate and tax cuts deliver the promised consumption boost?

A 25 bps rate cut alone is unlikely to significantly reduce EMIs—translating to mere hundreds of rupees in savings for most borrowers.

RBI’s monetary policy marks clear change of direction in regulation

Governor Malhotra highlights the trade-offs between regulations aimed at enhancing consumer protection and stability, and efficiency. Also, the underlying message is that there may be a greater weightage placed on economic growth

New RBI Guv debuts with a rate cut & ‘appropriate’ liquidity; delivers a correct combo of change & continuity

The RBI’s policy, marked by restrained dovishness, balanced the need for a rate cut with cautious liquidity assurances, making Governor Malhotra’s debut a commendable effort.

LIC evaluating stake in health insurer, deal unlikely in FY25: CEO

Factors such as regulatory approvals and valuation will take time, says Mohanty

MC Analysis | Governor Malhotra brings new thinking at RBI, but too soon to predict what next

Without giving away much on whether more rate cuts are on the anvil, or if the RBI has plans to defend a falling Rupee, Sanjay Malhotra, in his first MPC address, handed out what most asked for - a 25 basis points cut in repo rate.

RBI moves in the right direction but global uncertainty can change plans

Global disinflation is stalling due to service inflation. Expectations on the size and pace of rate cuts in the US have receded and the US dollar has strengthened. Any unanticipated increase in energy prices could also impact future stance

Focussing on the spirit of the 'flexible' inflation target framework

Given the global unknowns, the path ahead for monetary policy remains uncertain. This is reflected in the MPC’s decision to keep its stance unchanged at neutral. This provides the central bank considerable degrees of freedom in terms of future rate response.

Vault Matters | Why not 100% FDI in banking sector?

Recently, 100% Foreign Direct Investment in the insurance sector became a reality. With this, almost every sphere of financial services is eligible to tap foreign money to the fullest, except for banks, where caveats remain very high

RBI to inject as much liquidity as required by banks

Banking system liquidity has been under stress in the last few weeks due to various reasons such as tax outflows, heavy intervention by RBI in forex market to sell dollars, and less government spending.

RBI rate cut will boost power demand, increase investments in energy projects

The repo rate cut is expected to boost India’s power demand, besides making it easier for power companies to finance new renewable energy projects. It could also mean improved financial health of distribution companies (discoms).

Focus on growth as inflation risks subside

It is important to note that RBI projects GDP growth of 6.7% in FY26, which is lower than the long-term trend rate. This raises the likelihood of further policy support. At the same time, a neutral stance gives RBI the flexibility to remain watchful of the evolving global dynamics and financial sector volatility.

RBI's repo rate cut welcomed by bank leaders, expected to ensure liquidity while monitoring inflation

However, some banks acknowledged the short-term impact on their profitability, with expectations of eventual recovery

RBI MPC comes to a unanimous decision on rates after 11 months

The rate cut, the first in almost five years, comes a week after Finance Minister Nirmala Sitharaman presented the budget for FY26.

RBI cuts repo rate by 25 bps to 6.25%, Deposit rate transmission to take two quarters

The Standing Deposit Facility (SDF) rate remains unchanged at 6.5 percent, as do the Marginal Standing Facility (MSF) and bank rates, indicating a cautious yet accommodative monetary policy stance, says RBI Guv

Draft LCR, project financing norms not to be implemented before March 2026

On January 29, Moneycontrol reported that India’s banks, both state-owned and private, have requested the Reserve Bank of India (RBI) to defer the implementation of liquidity coverage ratio (LCR) norms to the later part of the next financial year, 2025-26.

RBI to introduce new guidelines on conduct of banks to tackle the issue of mis-selling

This move comes as part of an effort to curb practices that lead to consumer detriment and to ensure a level playing field in the financial services sector, he said.

Will RBI rethink its policy of banning biz of banks and NBFCs? Seems so, say bankers

Talking extensively about some of the proposed regulatory changes, the RBI governor for the first time went beyond the usual narrative of taking a consultative approach in decision making to spell out the trade-offs in the regulatory decision making process.

RBI has reduced inflation forecast for FY26, FY25 forecast remains unchanged

Malhotra projected the retail inflation at 4.2 percent for next financial year beginning April while retaining the forecast for 2025 at 4.8 per cent

RBI MPC: Bond yield rises 5 bps in absence of liquidity measures

The RBI in January announced a string of measures announced to support banking system liquidity, which has been under stress on tax outflows and the central bank's intervention in the forex market

Quick Take: Sanjay Malhotra’s first rate cut marks an important policy shift for RBI

A faltering growth scenario required monetary policy support. Inflation, the old nemesis of rate cuts, is no longer breathing fire. The RBI used this window to change tracks

Sayonara central bank independence?

An idea that took root globally after inflation shocks of 1970s is facing its stiffest challenge yet. Post-2008 crisis, central banks moved away from a narrow remit of targeting just inflation. Now, in a phase where multiple crises have catalysed political movements with extreme views on institutions, the very idea of central bank autonomy is facing a stiff challenge

We will strive to maintain NIM at 3%, says CS Setty, SBI Chairman

According to its investor presentation, SBI's NIM reduced to 3.01 percent in October-December quarter, from 3.14 percent in a quarter ago period and 3.22 percent in a year ago period.

RBI Feb MPC meet: GDP numbers to be key to watch

India’s growth is set to dip to 6.4 percent in FY25, its lowest level in four years, pulled down by a likely decline in manufacturing and investment growth, according to preliminary data released on January 7.

MC Analysis | Three reasons why RBI MPC meet outcome will be keenly watched on February 7

While a 25 bps rate cut seems to be a foregone conclusion, it being the first monetary policy chaired by Sanjay Malhotra, RBI governor, banker, equity, debt and currency markets will want to take cues on the policy direction.

More than the rate cut, RBI Governor’s guidance on key issues to be tracked

There is a fair chance that the MPC revises lower both growth and inflation projections for the current financial year.

Liquidity deficit narrows to a month's low on RBI measures, govt's month-end spending

Liquidity deficit in the banking system was at Rs 45,005.65 crore on February, the lowest since January 5 when it stood at Rs 28,957.58 crore

Insurance companies see no benefit from open architecture; Leaders cite unemployment, mis-selling concerns

Moreover, companies have not seen much success with the open architecture model

UIDAI to launch Aadhar authentication portal next week

Last week, union government has amended the Aadhaar rules to allow private entities to use Aadhaar authentication for delivering their services.

2025 will not be a good year for rupee, should brace for underperformance, says RBL Bank’s Anshul Chandak

On the rate action front, Chandak said that the central bank's next monetary policy is likely to announce a 25-basis-point cut in the repo rate

YES Bank infuses Rs 148.71 crore into subsidiary YES Securities via rights issue

This capital infusion strengthens YSIL’s financial base and supports its future growth, particularly enhancing its margin trading facilities and ensuring smooth client transactions, the company's press note says

NPCI CEO Dilip Asbe bats for incentives to broaden UPI base

In December 2024, the value of transactions through UPI stands at Rs 23.24 lakh crore as compared to December 2016, when it was Rs 707.93 crore and December 2020, when it was Rs 4.16 lakh crore.

Centre's ULIP tax clarification may push insurers, policyholders towards new products

While ULIP sales have significantly driven premium growth for private insurers, a downturn in market stability typically leads to reduced demand for ULIPs, with effects usually seen nine to twelve months later

Chart of the Day | Easing price trends set stage for a Friday rate cut

Food inflation, the villain in India’s inflation story, has finally begun to ease, although it is too early to say whether the decline is deceptive.

MC Exclusive | Standard Chartered Bank’s mortgages head to join L&T Finance

Jinesh Shah, MD and head of mortgages at Standard Chartered Bank to take over from Sanjay Garyali as CEO - Urban Finance, L&T Finance

TDS reduction on income from security receipts will free up additional liquidity for investors, ARCs

Currently, TDS on income derived from securitization trsut constituted under SARFAESI, is 25 percent, if the investor is individual or a Hindu Undivided Family, and 30 percent for any other person. This government has reduced to 10 percent in the Union Budget 2025.

Ujjivan Small Finance Bank applies for universal banking licence with RBI

According to the company's press note, the move to apply for this licence is part of Ujjivan's broader vision to expand and strengthen its business portfolio.

RBI likely to cut rates by 75 bps, starting with 25 bps in February monetary policy: SBI Research

On February 3, a Moneycontrol poll of bankers and economists also showed that the central bank will cut rate by 25 bps in February monetary policy as sluggish growth, government advance estimates, and a series of liquidity infusion measures have made the case for a rate cut.

FPI invest over around Rs 11,000 cr in Indian G-sec post inclusion in Bloomberg bond index

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