One reason for mispricing has been surplus liquidity and the RBI’s move to levy 10 percent incremental cash reserve ratio (CRR) on banks was based on this view. However, despite banking sector liquidity now near deficit, corporate bond yields haven’t climbed much
Further tinkering of postal deposit rates should factor in the elevated level of retail inflation and uncertain macroeconomic scenario
If the draft RBI guidelines are implemented in its current form, it may have a significant impact on profits of banks because return on assets (RoA) will fall by 20 basis points in fiscal year 2017, says Pawan Agrawal, chief analytical officer at Crisil Ratings
The Reserve Bank of India (RBI) is unlikely to reduce the policy (repo) rate in its mid quarter monetary policy to be announced on June 17. The depreciating rupee would be the key trigger behind such action. The fear of imported inflation may resist the central bank from taking any dovish stance.