The Reserve Bank of India announced various developmental and regulatory policies to address the stress in financial conditions caused by COVID-19, including expanding liquidity in the system, easing debt servicing burdens, and improving market functioning. Measures included targeted long-term repo operations of up to Rs. 1 lakh crore, reducing cash reserve ratio and marginal standing facility rates, and providing moratorium on loan repayments. The policies aim to ensure adequate liquidity and relief for borrowers while maintaining financial stability.
The document discusses the Reserve Bank of India's (RBI) credit control policies during the COVID-19 pandemic. It provides background on RBI and its functions as India's central bank, including controlling money supply and credit. During the pandemic, RBI took measures like reducing cash reserve and statutory liquidity ratios to increase bank liquidity and encourage lending. It also lowered policy rates to make borrowing cheaper. These steps aimed to stabilize the economy but led to a contraction and rising unemployment initially due to lockdowns. The economic impact was largely disruptive, with sectors like tourism and hospitality hit hard.
NON PERFORMING ASSETS – NEED FOR PRAGMATIC & PRACTICAL REGULATORY FRAMEWORK Neha Sharma
The Reserve Bank of India, Indian Banks Association, almost all Public Sector Banks and the Indian businesses are deeply concerned about significant rise in nonperforming assets during last one year. The Indian economy has been passing through unprecedented turbulent times. Many important sectors of the economy have been adversely affected.
The RBI raised key policy rates by 25 basis points each and increased the CRR by 25 basis points to absorb excess liquidity. It forecast GDP growth of 8% for FY2011 and inflation to moderate to 5.5% by March 2011. The RBI aims to support credit growth while anchoring inflation expectations. It also took steps to broaden financial markets and strengthen stability.
Systemic liquidity in India has improved in April 2012 compared to previous months, however this is largely due to seasonal factors as liquidity typically improves after the busy March quarter. While the Reserve Bank of India (RBI) has taken steps like cutting cash reserve ratio to inject liquidity, continued high government borrowing will keep liquidity pressures. Liquidity-easing measures are needed from RBI alongside cuts in policy rates to meaningfully reduce interest rates throughout the system and revive investment. Analysts expect the RBI to cut its repo rate by 100 basis points over the fiscal year, aided by relatively lower inflation, to boost the economy.
The Reserve Bank of India uses various quantitative and qualitative measures to control monetary policy in India. Quantitative measures include open market operations, cash reserve ratios, statutory liquidity ratios, bank rates, and repo/reverse repo rates. Qualitative measures include moral suasion, credit rationing, publicity, and direct actions to influence specific sectors or achieve other policy objectives. Overall, the RBI aims to balance economic growth and stability through strategic use of these monetary policy instruments.
OBJECTIVE
In these times of economic and financial distress owing to COVID-19 pandemic, we would like to stress upon the central bank's relentless efforts to revive the Indian economy. The sizeable rate cut and few other regulatory policies will ease the functioning of the banking system and make sure there is enough liquidity in the economy to promote growth.
In this webinar, we shall analyse the array of financial weapons brought into play by RBI through its Development and Regulatory Policy, and the impact they would have on the economy when they are put to use.
The document discusses India's monetary and banking reforms post-liberalization. It outlines the objectives of monetary policy in India including price stability, economic growth, full employment, and balance of payments equilibrium. It then describes the evolution of monetary policy frameworks and tools used, including key interest rates, cash reserve ratios, statutory liquidity ratios, and open market operations. Banking reforms introduced prudential norms, capital adequacy norms, and interest rate deregulation to increase efficiency and competitiveness in the banking sector. Overall, the reforms aimed to increase stability, reduce inflation, and boost economic growth.
(i) The Reserve Bank of India issued revised guidelines on priority sector lending targets and classifications.
(ii) Key changes include adding medium enterprises, social infrastructure, and renewable energy as new priority sectors. Agriculture lending now combines direct and indirect agriculture. Targets are set for lending to small and marginal farmers and micro enterprises.
(iii) Priority sector targets and sub-targets are specified for all scheduled commercial banks as well as for foreign banks with more or less than 20 branches. The targets must be achieved in an phased manner by certain dates.
The document discusses the Reserve Bank of India's (RBI) credit control policies during the COVID-19 pandemic. It provides background on RBI and its functions as India's central bank, including controlling money supply and credit. During the pandemic, RBI took measures like reducing cash reserve and statutory liquidity ratios to increase bank liquidity and encourage lending. It also lowered policy rates to make borrowing cheaper. These steps aimed to stabilize the economy but led to a contraction and rising unemployment initially due to lockdowns. The economic impact was largely disruptive, with sectors like tourism and hospitality hit hard.
NON PERFORMING ASSETS – NEED FOR PRAGMATIC & PRACTICAL REGULATORY FRAMEWORK Neha Sharma
The Reserve Bank of India, Indian Banks Association, almost all Public Sector Banks and the Indian businesses are deeply concerned about significant rise in nonperforming assets during last one year. The Indian economy has been passing through unprecedented turbulent times. Many important sectors of the economy have been adversely affected.
The RBI raised key policy rates by 25 basis points each and increased the CRR by 25 basis points to absorb excess liquidity. It forecast GDP growth of 8% for FY2011 and inflation to moderate to 5.5% by March 2011. The RBI aims to support credit growth while anchoring inflation expectations. It also took steps to broaden financial markets and strengthen stability.
Systemic liquidity in India has improved in April 2012 compared to previous months, however this is largely due to seasonal factors as liquidity typically improves after the busy March quarter. While the Reserve Bank of India (RBI) has taken steps like cutting cash reserve ratio to inject liquidity, continued high government borrowing will keep liquidity pressures. Liquidity-easing measures are needed from RBI alongside cuts in policy rates to meaningfully reduce interest rates throughout the system and revive investment. Analysts expect the RBI to cut its repo rate by 100 basis points over the fiscal year, aided by relatively lower inflation, to boost the economy.
The Reserve Bank of India uses various quantitative and qualitative measures to control monetary policy in India. Quantitative measures include open market operations, cash reserve ratios, statutory liquidity ratios, bank rates, and repo/reverse repo rates. Qualitative measures include moral suasion, credit rationing, publicity, and direct actions to influence specific sectors or achieve other policy objectives. Overall, the RBI aims to balance economic growth and stability through strategic use of these monetary policy instruments.
OBJECTIVE
In these times of economic and financial distress owing to COVID-19 pandemic, we would like to stress upon the central bank's relentless efforts to revive the Indian economy. The sizeable rate cut and few other regulatory policies will ease the functioning of the banking system and make sure there is enough liquidity in the economy to promote growth.
In this webinar, we shall analyse the array of financial weapons brought into play by RBI through its Development and Regulatory Policy, and the impact they would have on the economy when they are put to use.
The document discusses India's monetary and banking reforms post-liberalization. It outlines the objectives of monetary policy in India including price stability, economic growth, full employment, and balance of payments equilibrium. It then describes the evolution of monetary policy frameworks and tools used, including key interest rates, cash reserve ratios, statutory liquidity ratios, and open market operations. Banking reforms introduced prudential norms, capital adequacy norms, and interest rate deregulation to increase efficiency and competitiveness in the banking sector. Overall, the reforms aimed to increase stability, reduce inflation, and boost economic growth.
(i) The Reserve Bank of India issued revised guidelines on priority sector lending targets and classifications.
(ii) Key changes include adding medium enterprises, social infrastructure, and renewable energy as new priority sectors. Agriculture lending now combines direct and indirect agriculture. Targets are set for lending to small and marginal farmers and micro enterprises.
(iii) Priority sector targets and sub-targets are specified for all scheduled commercial banks as well as for foreign banks with more or less than 20 branches. The targets must be achieved in an phased manner by certain dates.
Index Performance: Indian equity indices S&P BSE Sensex and Nifty 50 tanked 23% each in March 2020 due to worries about the rapid spread of Covid19 in the country and the government’s lockdown decision. The benchmark
indices also logged their biggest one-day fall on March 23 and hit their lower circuits twice in the month, triggering trading halts for 45 minutes.
Inflation: Retail inflation, based on Consumer Price Index (CPI), fell to 6.58% in February 2020 from a 68-month high of 7.59% in January, because of a decline in food prices and the base effect.
Our Honorable Chief Minister of Delhi, announced a special seven day drive of removing Malba, dust and garbage in case he receives photographs through a special mobile application. Huge amounts were spent on the entire exercise specially on advertisement. Delhi did not see any result and the outcome couldn't be measured, in the absence of accounting, Management Information System, proper checks and control and no provision for monitoring of outcome.
"Tide is Turning" aims to simplify key pointers pertaining to the recent RBI's policy. It details newly introduced Standing Deposit Facility (SDF) and how with SDF, LAF (Liquidity Adjustment Facility) corridor will be restored back to pre-pandemic levels. Floating rate bonds can provide necessary cushion in such an rising rate environment.
Indian Growth under Rising Risks Show Financial Stability Report June 2016atul baride
RBI Detail Financial Stability Report shows that, Growth is Stagnant and Corporate Indebtedness ability to service Banking Debt weakening daily. The Indian Public sector Banks Return on Assets has fallen to mere 0.4 , ROE 4.8 , and Net Interest Income to 8.3 from 15.8 in 2012. The Iron and Steel , Telecom, Construction, Electricity, Transport are enlarging systemic risks. While Macro Economic and Institutional Risk have risen. The Housing Price and Price Indices showing Significant divergence.
My Comments : Britain exit from Euro is not accounted. And, Slow down in IT is not considered. Also, Slowing Global Growth particularly China and now EU is not considered. The Rise 45 % Investors from Small Town indicates Equity Markets is taken as Positive Dispersion, While it shows that Indian Equity market is increasingly in ' Weaker Hands ' .
The Big Money should surely ' Press Pause Button ' and Cash is going to be King
BANKING SECTOR REFORMS IN MYANMAR COLLECTION
https://www.mmbiztoday.com/articles/inside-banking-reform-myanmar
Inside: Banking Reform in Myanmar
https://www.reuters.com/article/us-myanmar-banking-exclusive/exclusive-tussle-over-myanmar-bank-reform-puts-spotlight-on-debt-pile-idUSKBN1DM25W
Exclusive: Tussle over Myanmar bank reform puts spotlight on debt pile
https://www.aseanbriefing.com/news/2018/03/21/banking-sector-reforms-myanmar.html
Banking Sector Reforms in Myanmar
https://carnegieendowment.org/2014/06/05/banking-on-myanmar-strategy-for-financial-sector-reform-pub-55813
Banking on Myanmar: A Strategy for Financial Sector Reform
https://www.mmtimes.com/news/regulatory-roadmap-needed-banking-sector-reform.html
Regulatory roadmap needed for banking sector reform
https://muse.jhu.edu/article/550663/pdf
Banking and Financial Regulation and Reform in Myanmar
http://www.myanmarmatters.com/banking-reforms-in-myanmar/
BANKING REFORMS IN MYANMAR
http://www.mizzima.com/business-opinion/extensive-reforms-will-enable-myanmars-banking-sector-grow-eightfold-report
Extensive reforms will enable Myanmar's banking sector to grow eightfold: report
https://www.bloomberg.com/news/articles/2017-03-08/myanmar-to-vet-state-banks-to-protect-asia-s-top-growing-economy
Myanmar Wants to Modernize Its Banking System
http://www.nationmultimedia.com/business/Reform-of-the-banking-system-tops-Myanmars-agenda-30202140.html
Reform of the banking system tops Myanmar's agenda
http://www.milkeninstitute.org/publications/view/875
The Banking Sector in Myanmar: An Assessment of Recent Progress
http://assets1c.milkeninstitute.org/assets/Publication/Viewpoint/PDF/083117-MyanmarBanking.pdf
https://burmese.voanews.com/a/burma-forum-financial-reform-and-nld/4197608.html?ltflags=mailer
NLD အစိုးရ ဘဏ္လုပ္ငန္းျပဳျပင္ေျပာင္းလဲမႈ
Comments on Draft Decree on the Introduction of Government BondsJean-Marc Lepain
The document provides an assessment of a draft decree on introducing government bonds and government guaranteed bonds in Laos. Key points include:
1) The decree lays out regulations for bond types, currencies, investors, and roles of the Ministry of Finance and central bank, but requires additional details to become operational.
2) More clarification is needed on instruments, participant responsibilities, and establishment of a secondary market.
3) A borrowing policy must be developed to guide the strategy and assess whether the decree allows objectives to be met.
4) Additional regulations and a feasibility study are recommended before fully implementing the bond market framework.
Interbank call money rates remained below the RBI’s repo rate of 5.75% during most parts of the month as systemic liquidity remained in surplus amid periodic repo auctions conducted by the central bank. The RBI also conducted frequent reverse repo auctions to drain away excess liquidity and give the opportunity to banks to park their idle funds.
Read the full document to know more.
Loan and deposit growth in India improved to 18.7% and 14.3% YoY in the first fortnight of FY13, largely driven by seasonal factors. The credit-deposit ratio moderated to 77% due to higher deposit mobilization. Investments increased, causing the statutory liquidity ratio to improve to 27.2%. Outlook expects loan growth of 15-16% in FY13 due to macroeconomic uncertainties.
This document discusses measures of nominal and real effective lending rates of banks in India from 1992-2010. It finds that nominal lending rates have declined significantly over this period from around 16-17% in the 1990s to about 10.5% by 2010. Real lending rates have also declined from their peak levels in the early 2000s. There is a statistically significant negative relationship between real output growth and real interest rates. The analysis is based on computation of weighted average lending rates using granular bank credit data from the BSR system.
This document analyzes the performance of banks in India before and after the World Trade Organization's General Agreement on Trade in Services (GATS). It discusses how GATS led to increased competition in India's banking sector through allowing more foreign bank presence. The study develops a composite index to rank different bank groups (public sector, private sector, foreign) based on measures of productivity, profitability, and efficiency. It finds that while foreign and new private banks initially outperformed public sector banks, the traditional banks improved after GATS as they adapted to greater competition. The document provides context on banking reforms in India and reviews prior literature on comparing performance of different bank ownership groups.
Acquisory News Bytes 30 June 2016
RBI -
1. External Commercial Borrowings (ECB) – Approval Route cases
2. Discontinuation of Quarterly reporting system- Foreign branches/ subsidiaries/ joint ventures/ associates of Indian banks
SEBI -
1. Press Release on Electronic book mechanism for issuance of debt securities on private placement basis
2. Frequently Asked Questions (FAQs) on SEBI (Foreign Portfolio Investors) Regulations, 2014
MCA-
Amendment in rules for acceptance of Deposit by Companies
TAXATION -
1. CBDT issues new set of FAQs to clarify queries regarding Income Declaration Scheme, 2016.
2. Government Notifies Rules regarding Fair market value and reporting requirement for Indian concern - Indirect transfer provisions - section 9(1) of the Income-tax Act, 1961
3. CBDT notifies rules for Foreign Tax Credit
This document is a student's project submission on priority sector lending in India. It includes sections on the introduction, history and background of priority sector lending in India, pre-reform and post-reform periods, key thrust areas and need for priority sector lending. It also discusses changing criteria of priority sectors, interest rate structures, and analysis of non-performing assets in priority sector lending between public and private sector banks. The document provides an overview of priority sector lending guidelines and regulations in India.
Banking Sector Q4FY15 preview: Asset quality will remain under pressureIndiaNotes.com
- Loan growth for state-owned banks is expected to be moderate at 10-11% YoY due to weak corporate demand and capital conservation efforts, while private banks may see higher growth of 18-20% due to strong retail loans.
- Asset quality is likely to remain under pressure with high slippages of 2.4% and increased restructuring as the RBI forbearance period ends. Stress additions will be a key factor for state-owned bank earnings.
- Net interest margins are expected to be stable for most banks, while treasury gains from falling bond yields and provision reversals may support earnings. However, retail fees growth and high operating expenses will impact state-owned bank profits.
- The
This document summarizes the Financial Stability Report for 2014 published by Nepal Rastra Bank. It discusses the macroeconomic environment and performance of the financial system in Nepal. The banking sector is well-capitalized and profitable. Non-performing loans remain low although they increased slightly. The central bank is taking measures to ensure financial stability in line with Basel III standards and has developed frameworks for problem bank resolution and liquidity monitoring. Overall, the financial system remains stable but continued consolidation in the banking sector is needed to improve stability, intermediation, and access to finance.
Non performing assets and its impact on performance of karnataka state co-opeIAEME Publication
This document discusses non-performing assets (NPAs) and their impact on the performance of the Karnataka State Co-operative Apex Limited bank. It defines NPAs as loans where interest or principal payments are overdue by 90 days or more. The bank has seen rising NPAs in recent years. The objectives of the study are to understand NPAs, examine reasons for rising NPAs, analyze their impact on bank performance, and suggest measures to reduce NPAs. Primary data was collected through bank officers and records, while secondary data came from annual reports, publications, and websites. Data analysis found that the percentage of sub-standard assets to gross NPAs decreased from 2007-2008 to 2009-2010 but increased in later
The document summarizes the key points from the Financial Stability Report 2015 presented by Reserve Bank of India. It highlights that while India's macroeconomic fundamentals are relatively strong, continued global growth uncertainty remains a risk. The banking sector shows improvement with credit growth of 9.7% and asset quality stable, but stressed advances are still high. The report also covers trends in financial inclusion, insurance and pension sectors regulation aimed at strengthening stability.
RBI policy highlights:
- RBI reduced the Repo rate by 25 basis points to 5.75%
- Reverse Repo rate stands adjusted to 5.50%
- Marginal Standing Facility (MSF) rate and the Bank rate stands adjusted to 6.00%
- Cash Reserve Ratio (CRR) remains unchanged at 4%
- Statutory Liquidity Ratio (SLR) stands adjusted to 19.00%
Read the full document to know more.
The document summarizes monetary and credit control measures taken by the State Bank of Pakistan in 2006-2007, including reducing interest rates for export financing, revising reserve requirements for banks, and enhancing rates for borrowing from SBP. It also discusses various capital market reforms introduced by the Securities and Exchange Commission of Pakistan during the fiscal year, such as implementing a new risk management structure at stock exchanges based on value-at-risk, introducing position limits to prevent market manipulation, and working to develop new derivative products and demutualize stock exchanges.
This document provides an overview of monetary and banking reforms in India. It discusses the role and objectives of monetary policy conducted by the Reserve Bank of India, including various instruments used like open market operations, cash reserve ratio, statutory liquidity ratio, and repo/reverse repo rates. The current state of monetary policy is outlined, with the repo rate most recently reduced from 7.5% to 7.25%. Banking reforms and recommendations of the Narasimhan Committee on reforms are also summarized. Key assessments from monetary policy reviews focus on slowing growth, industrial weakness, inflationary pressures, and liquidity issues for small and medium enterprises.
In continuation to RBI announcements dated March 27, 2020, the RBI announced additional liquidity and regulatory measures to improve the system liquidity and to improve credit spreads.
Relief Measures by RBI and Banks to MSME, Real Estate and NBFC SectorSumedha Fiscal
In order to alleviate the economic pain widely caused by the global pandemic, RBI announces new measures. Here is a breakdown of the steps taken and what the future holds.
Index Performance: Indian equity indices S&P BSE Sensex and Nifty 50 tanked 23% each in March 2020 due to worries about the rapid spread of Covid19 in the country and the government’s lockdown decision. The benchmark
indices also logged their biggest one-day fall on March 23 and hit their lower circuits twice in the month, triggering trading halts for 45 minutes.
Inflation: Retail inflation, based on Consumer Price Index (CPI), fell to 6.58% in February 2020 from a 68-month high of 7.59% in January, because of a decline in food prices and the base effect.
Our Honorable Chief Minister of Delhi, announced a special seven day drive of removing Malba, dust and garbage in case he receives photographs through a special mobile application. Huge amounts were spent on the entire exercise specially on advertisement. Delhi did not see any result and the outcome couldn't be measured, in the absence of accounting, Management Information System, proper checks and control and no provision for monitoring of outcome.
"Tide is Turning" aims to simplify key pointers pertaining to the recent RBI's policy. It details newly introduced Standing Deposit Facility (SDF) and how with SDF, LAF (Liquidity Adjustment Facility) corridor will be restored back to pre-pandemic levels. Floating rate bonds can provide necessary cushion in such an rising rate environment.
Indian Growth under Rising Risks Show Financial Stability Report June 2016atul baride
RBI Detail Financial Stability Report shows that, Growth is Stagnant and Corporate Indebtedness ability to service Banking Debt weakening daily. The Indian Public sector Banks Return on Assets has fallen to mere 0.4 , ROE 4.8 , and Net Interest Income to 8.3 from 15.8 in 2012. The Iron and Steel , Telecom, Construction, Electricity, Transport are enlarging systemic risks. While Macro Economic and Institutional Risk have risen. The Housing Price and Price Indices showing Significant divergence.
My Comments : Britain exit from Euro is not accounted. And, Slow down in IT is not considered. Also, Slowing Global Growth particularly China and now EU is not considered. The Rise 45 % Investors from Small Town indicates Equity Markets is taken as Positive Dispersion, While it shows that Indian Equity market is increasingly in ' Weaker Hands ' .
The Big Money should surely ' Press Pause Button ' and Cash is going to be King
BANKING SECTOR REFORMS IN MYANMAR COLLECTION
https://www.mmbiztoday.com/articles/inside-banking-reform-myanmar
Inside: Banking Reform in Myanmar
https://www.reuters.com/article/us-myanmar-banking-exclusive/exclusive-tussle-over-myanmar-bank-reform-puts-spotlight-on-debt-pile-idUSKBN1DM25W
Exclusive: Tussle over Myanmar bank reform puts spotlight on debt pile
https://www.aseanbriefing.com/news/2018/03/21/banking-sector-reforms-myanmar.html
Banking Sector Reforms in Myanmar
https://carnegieendowment.org/2014/06/05/banking-on-myanmar-strategy-for-financial-sector-reform-pub-55813
Banking on Myanmar: A Strategy for Financial Sector Reform
https://www.mmtimes.com/news/regulatory-roadmap-needed-banking-sector-reform.html
Regulatory roadmap needed for banking sector reform
https://muse.jhu.edu/article/550663/pdf
Banking and Financial Regulation and Reform in Myanmar
http://www.myanmarmatters.com/banking-reforms-in-myanmar/
BANKING REFORMS IN MYANMAR
http://www.mizzima.com/business-opinion/extensive-reforms-will-enable-myanmars-banking-sector-grow-eightfold-report
Extensive reforms will enable Myanmar's banking sector to grow eightfold: report
https://www.bloomberg.com/news/articles/2017-03-08/myanmar-to-vet-state-banks-to-protect-asia-s-top-growing-economy
Myanmar Wants to Modernize Its Banking System
http://www.nationmultimedia.com/business/Reform-of-the-banking-system-tops-Myanmars-agenda-30202140.html
Reform of the banking system tops Myanmar's agenda
http://www.milkeninstitute.org/publications/view/875
The Banking Sector in Myanmar: An Assessment of Recent Progress
http://assets1c.milkeninstitute.org/assets/Publication/Viewpoint/PDF/083117-MyanmarBanking.pdf
https://burmese.voanews.com/a/burma-forum-financial-reform-and-nld/4197608.html?ltflags=mailer
NLD အစိုးရ ဘဏ္လုပ္ငန္းျပဳျပင္ေျပာင္းလဲမႈ
Comments on Draft Decree on the Introduction of Government BondsJean-Marc Lepain
The document provides an assessment of a draft decree on introducing government bonds and government guaranteed bonds in Laos. Key points include:
1) The decree lays out regulations for bond types, currencies, investors, and roles of the Ministry of Finance and central bank, but requires additional details to become operational.
2) More clarification is needed on instruments, participant responsibilities, and establishment of a secondary market.
3) A borrowing policy must be developed to guide the strategy and assess whether the decree allows objectives to be met.
4) Additional regulations and a feasibility study are recommended before fully implementing the bond market framework.
Interbank call money rates remained below the RBI’s repo rate of 5.75% during most parts of the month as systemic liquidity remained in surplus amid periodic repo auctions conducted by the central bank. The RBI also conducted frequent reverse repo auctions to drain away excess liquidity and give the opportunity to banks to park their idle funds.
Read the full document to know more.
Loan and deposit growth in India improved to 18.7% and 14.3% YoY in the first fortnight of FY13, largely driven by seasonal factors. The credit-deposit ratio moderated to 77% due to higher deposit mobilization. Investments increased, causing the statutory liquidity ratio to improve to 27.2%. Outlook expects loan growth of 15-16% in FY13 due to macroeconomic uncertainties.
This document discusses measures of nominal and real effective lending rates of banks in India from 1992-2010. It finds that nominal lending rates have declined significantly over this period from around 16-17% in the 1990s to about 10.5% by 2010. Real lending rates have also declined from their peak levels in the early 2000s. There is a statistically significant negative relationship between real output growth and real interest rates. The analysis is based on computation of weighted average lending rates using granular bank credit data from the BSR system.
This document analyzes the performance of banks in India before and after the World Trade Organization's General Agreement on Trade in Services (GATS). It discusses how GATS led to increased competition in India's banking sector through allowing more foreign bank presence. The study develops a composite index to rank different bank groups (public sector, private sector, foreign) based on measures of productivity, profitability, and efficiency. It finds that while foreign and new private banks initially outperformed public sector banks, the traditional banks improved after GATS as they adapted to greater competition. The document provides context on banking reforms in India and reviews prior literature on comparing performance of different bank ownership groups.
Acquisory News Bytes 30 June 2016
RBI -
1. External Commercial Borrowings (ECB) – Approval Route cases
2. Discontinuation of Quarterly reporting system- Foreign branches/ subsidiaries/ joint ventures/ associates of Indian banks
SEBI -
1. Press Release on Electronic book mechanism for issuance of debt securities on private placement basis
2. Frequently Asked Questions (FAQs) on SEBI (Foreign Portfolio Investors) Regulations, 2014
MCA-
Amendment in rules for acceptance of Deposit by Companies
TAXATION -
1. CBDT issues new set of FAQs to clarify queries regarding Income Declaration Scheme, 2016.
2. Government Notifies Rules regarding Fair market value and reporting requirement for Indian concern - Indirect transfer provisions - section 9(1) of the Income-tax Act, 1961
3. CBDT notifies rules for Foreign Tax Credit
This document is a student's project submission on priority sector lending in India. It includes sections on the introduction, history and background of priority sector lending in India, pre-reform and post-reform periods, key thrust areas and need for priority sector lending. It also discusses changing criteria of priority sectors, interest rate structures, and analysis of non-performing assets in priority sector lending between public and private sector banks. The document provides an overview of priority sector lending guidelines and regulations in India.
Banking Sector Q4FY15 preview: Asset quality will remain under pressureIndiaNotes.com
- Loan growth for state-owned banks is expected to be moderate at 10-11% YoY due to weak corporate demand and capital conservation efforts, while private banks may see higher growth of 18-20% due to strong retail loans.
- Asset quality is likely to remain under pressure with high slippages of 2.4% and increased restructuring as the RBI forbearance period ends. Stress additions will be a key factor for state-owned bank earnings.
- Net interest margins are expected to be stable for most banks, while treasury gains from falling bond yields and provision reversals may support earnings. However, retail fees growth and high operating expenses will impact state-owned bank profits.
- The
This document summarizes the Financial Stability Report for 2014 published by Nepal Rastra Bank. It discusses the macroeconomic environment and performance of the financial system in Nepal. The banking sector is well-capitalized and profitable. Non-performing loans remain low although they increased slightly. The central bank is taking measures to ensure financial stability in line with Basel III standards and has developed frameworks for problem bank resolution and liquidity monitoring. Overall, the financial system remains stable but continued consolidation in the banking sector is needed to improve stability, intermediation, and access to finance.
Non performing assets and its impact on performance of karnataka state co-opeIAEME Publication
This document discusses non-performing assets (NPAs) and their impact on the performance of the Karnataka State Co-operative Apex Limited bank. It defines NPAs as loans where interest or principal payments are overdue by 90 days or more. The bank has seen rising NPAs in recent years. The objectives of the study are to understand NPAs, examine reasons for rising NPAs, analyze their impact on bank performance, and suggest measures to reduce NPAs. Primary data was collected through bank officers and records, while secondary data came from annual reports, publications, and websites. Data analysis found that the percentage of sub-standard assets to gross NPAs decreased from 2007-2008 to 2009-2010 but increased in later
The document summarizes the key points from the Financial Stability Report 2015 presented by Reserve Bank of India. It highlights that while India's macroeconomic fundamentals are relatively strong, continued global growth uncertainty remains a risk. The banking sector shows improvement with credit growth of 9.7% and asset quality stable, but stressed advances are still high. The report also covers trends in financial inclusion, insurance and pension sectors regulation aimed at strengthening stability.
RBI policy highlights:
- RBI reduced the Repo rate by 25 basis points to 5.75%
- Reverse Repo rate stands adjusted to 5.50%
- Marginal Standing Facility (MSF) rate and the Bank rate stands adjusted to 6.00%
- Cash Reserve Ratio (CRR) remains unchanged at 4%
- Statutory Liquidity Ratio (SLR) stands adjusted to 19.00%
Read the full document to know more.
The document summarizes monetary and credit control measures taken by the State Bank of Pakistan in 2006-2007, including reducing interest rates for export financing, revising reserve requirements for banks, and enhancing rates for borrowing from SBP. It also discusses various capital market reforms introduced by the Securities and Exchange Commission of Pakistan during the fiscal year, such as implementing a new risk management structure at stock exchanges based on value-at-risk, introducing position limits to prevent market manipulation, and working to develop new derivative products and demutualize stock exchanges.
This document provides an overview of monetary and banking reforms in India. It discusses the role and objectives of monetary policy conducted by the Reserve Bank of India, including various instruments used like open market operations, cash reserve ratio, statutory liquidity ratio, and repo/reverse repo rates. The current state of monetary policy is outlined, with the repo rate most recently reduced from 7.5% to 7.25%. Banking reforms and recommendations of the Narasimhan Committee on reforms are also summarized. Key assessments from monetary policy reviews focus on slowing growth, industrial weakness, inflationary pressures, and liquidity issues for small and medium enterprises.
In continuation to RBI announcements dated March 27, 2020, the RBI announced additional liquidity and regulatory measures to improve the system liquidity and to improve credit spreads.
Relief Measures by RBI and Banks to MSME, Real Estate and NBFC SectorSumedha Fiscal
In order to alleviate the economic pain widely caused by the global pandemic, RBI announces new measures. Here is a breakdown of the steps taken and what the future holds.
This assignment is related for a bank (SBP)Amna Abrar
1:Importance of Prudential Regulation from regulators point of view
2:Types of Prudential Regulations provide by SBP
3:Definitions of:
Exposure limits for banks:
Limit On Exposure Against Contingent Liabilities:
Minimum Requirement For Different Types Of Consumer Finance:
General Reserves Against Consumer Finance:
Window Dressing:
Margin Requirement:
Maximum Card Limit:
Maximum Consumer Loans Tenure:
This document contains directions issued by the Reserve Bank of India regarding the regulatory framework for microfinance loans. Key points include:
1. It defines microfinance loans as collateral-free loans up to Rs. 300,000 provided to households with annual income up to Rs. 300,000.
2. It sets guidelines for regulated entities like banks, NBFCs, and cooperatives that provide microfinance loans regarding assessing borrower income, limits on monthly loan repayment obligations, pricing and disclosure of loans, and conduct towards borrowers.
3. Regulated entities must have board-approved policies on various aspects of microfinance lending like income assessment methodology, pricing approach, and fair practices code for borrowers. The
Challenge of big business stimulus packageM S Siddiqui
Government may consider to introduce risk/credit guarantee schemes, where governments share potential losses in case of default, are proven tools globally to address this challenge. The current package does not include any such support. Some experts are stating that BB can go for risk sharing method. It means if the money will not come back then BB will subsidized by sharing principal as like interest subsidy.
The document discusses the evolution of interest rate policies on advances in India. It begins with deregulation of interest rates in 1977, which gave banks freedom to set their own benchmark rates. Over time, various benchmarks were introduced, including the Base Rate system in 2010 and Marginal Cost of Funds based Lending Rates (MCLR) in 2016. MCLR comprises four components and is the minimum rate below which banks cannot lend. In 2019, the Reserve Bank of India mandated external benchmarks for certain loans, leading banks to introduce Repo Based Lending Rates (RBLR) linked to the repo rate. The document provides details on the composition of MCLR and RBLR and the applicability of these rates
RBI GUIDELINES: RESOLUTION OF STRESSED ASSETS DATED 12 FEBRUARY 2018GK Dutta
The Reserve Bank of India has issued various instructions aimed at the resolution of stressed assets in the economy, including the introduction of certain specific schemes at different points of time. In view of the enactment of the Insolvency and Bankruptcy Code, 2016 (IBC), it has been decided to substitute the existing guidelines with a harmonised and simplified generic framework for resolution of stressed assets. The details of the revised framework are elaborated in the following paragraphs.
Subordinate debt worth Rs. 20,000 crores introduced for stressed MSMEs. Those companies which are stressed or even an NPA are eligible for this facility. 2 lakh MSMEs are likely to benefit from this.
Monetary Policy of Nepal 2020-HighlightsTilak Mahara
The key highlights of the monetary policy of Nepal for FY 2077/78. Nepal Rastra Bank on Friday, July 17 has issued the monetary policy for the fiscal year 2077/78. The policy has been made public to relieve the economy and social life that has been weakened by the Corona epidemic.
RESTRUCTURING OF MSMEs & CREDIT GUARANTEE SCHEME FOR SUBORDINATE DEBT (CGSSD)Ajayan Kavungal Anat
This is a brief presentation to give insights into the
new guidelines issued by Reserve Bank of India for
‘Restructuring of MSMEs’ and also on Subordinate
Debt for Stressed MSMEs’
Increasing NPA In PSU Banks And Its Management Amit Sharma
The document discusses non-performing assets (NPAs) in the Indian banking system. It defines NPAs and different categories of assets based on payment delays. It notes that rising NPAs have increased banks' provisioning costs and reduced their profitability. High NPAs also constrain banks' ability to lend, potentially slowing economic growth. The document outlines some of the negative impacts of NPAs on banks and the financial system as a whole. It concludes by discussing some steps that can be taken to prevent and manage NPAs.
Rbi master circular lending to micro, small & medium enterprises (msme) secto...Kale Law Office
The document summarizes guidelines from the Reserve Bank of India on lending to micro, small, and medium enterprises (MSMEs) in India. Key points include:
1) The MSMED Act of 2006 modified definitions of micro, small, and medium enterprises and included services.
2) Guidelines stipulate timelines for disposing loan applications, mandatory acknowledgements, collateral-free loans up to Rs. 10 lakh, composite loans up to Rs. 1 crore, and penalties for delayed payments to MSMEs.
3) Banks must rehabilitate potentially viable sick MSME units within 6 months and implement debt restructuring mechanisms for eligible MSMEs.
The Reserve Bank of India released a draft report from a working group examining issues related to discrimination in pricing of credit, which made several recommendations to promote transparency and fairness in credit pricing, including moving towards computing base rates based on marginal cost of funds, ensuring boards approve pricing policies to prevent discrimination, and developing new benchmarks for floating rate loan products. The report also recommended improving grievance redressal systems, financial education initiatives, and enhancing borrower mobility between loans.
Decoding of government of india 20 lakhs crore packageRajivRoy28
The follwing article decodes Government of India Announcement regarding COVID 19 Economic Package its vision/purpose, its intended usage, its implication in Indian circuit.
The document provides an economic capsule with information on banking and finance, the economy and business, and international news.
Key points include:
- Commercial Bank's 9-month post-tax profit crossed Rs 10 billion with a growth of 15.19% and other strong financial results.
- The bank was ranked 2nd in Business Today's Top 30 companies for the fourth consecutive year.
- The bank launched NFC-enabled premium credit cards for both Visa and Mastercard, a first in Sri Lanka.
- The 2017 budget highlights, implications for the banking sector including new taxes and regulations.
- Sri Lanka's external sector performance showed a 4.1% decline in exports for January to August 2016
Interest Rate on Advances : RBI Policy 2016Niki Gala
A brief walk through to the various policies introduced by RBI in India over the years in developing the banking sector of India. This presentation focuses only on aspects associated to lending rate determination.
We expect growth and inflation to come down which may provide further headroom to RBI to continue its accommodative stance. On the fiscal side, we are comfortable with Govt. taking measures to combat COVID-19 impact due to absence of private credit demand (No crowding-out
effect) Keeping the above in mind, we believe the near term appears to be bullish for bond markets. Hence, we have added duration across our
portfolios. Our tactical call seeks to benefit from our bullish view in the short term by taking tactical positions on the longer end of the yield curve. Hence, we believe that the best strategy may be to create a portfolio with maturity in the range of 2-5 years with combination of short term assets and long term assets. Focus should be on accumulating spread assets to give better carry to the portfolio with tactical exposure towards longer term assets to give the capital appreciation flavour.
This document provides information on various loan schemes and targets for MSME lending in India. It discusses loan eligibility limits and categories for micro, small, and medium enterprises. It also summarizes guidelines for the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, including eligible sectors, guarantee coverage amounts and periods, claim settlement processes, and other operational details.
United Nations World Oceans Day 2024; June 8th " Awaken new dephts".Christina Parmionova
The program will expand our perspectives and appreciation for our blue planet, build new foundations for our relationship to the ocean, and ignite a wave of action toward necessary change.
UN WOD 2024 will take us on a journey of discovery through the ocean's vastness, tapping into the wisdom and expertise of global policy-makers, scientists, managers, thought leaders, and artists to awaken new depths of understanding, compassion, collaboration and commitment for the ocean and all it sustains. The program will expand our perspectives and appreciation for our blue planet, build new foundations for our relationship to the ocean, and ignite a wave of action toward necessary change.
This report explores the significance of border towns and spaces for strengthening responses to young people on the move. In particular it explores the linkages of young people to local service centres with the aim of further developing service, protection, and support strategies for migrant children in border areas across the region. The report is based on a small-scale fieldwork study in the border towns of Chipata and Katete in Zambia conducted in July 2023. Border towns and spaces provide a rich source of information about issues related to the informal or irregular movement of young people across borders, including smuggling and trafficking. They can help build a picture of the nature and scope of the type of movement young migrants undertake and also the forms of protection available to them. Border towns and spaces also provide a lens through which we can better understand the vulnerabilities of young people on the move and, critically, the strategies they use to navigate challenges and access support.
The findings in this report highlight some of the key factors shaping the experiences and vulnerabilities of young people on the move – particularly their proximity to border spaces and how this affects the risks that they face. The report describes strategies that young people on the move employ to remain below the radar of visibility to state and non-state actors due to fear of arrest, detention, and deportation while also trying to keep themselves safe and access support in border towns. These strategies of (in)visibility provide a way to protect themselves yet at the same time also heighten some of the risks young people face as their vulnerabilities are not always recognised by those who could offer support.
In this report we show that the realities and challenges of life and migration in this region and in Zambia need to be better understood for support to be strengthened and tuned to meet the specific needs of young people on the move. This includes understanding the role of state and non-state stakeholders, the impact of laws and policies and, critically, the experiences of the young people themselves. We provide recommendations for immediate action, recommendations for programming to support young people on the move in the two towns that would reduce risk for young people in this area, and recommendations for longer term policy advocacy.
karnataka housing board schemes . all schemesnarinav14
The Karnataka government, along with the central government’s Pradhan Mantri Awas Yojana (PMAY), offers various housing schemes to cater to the diverse needs of citizens across the state. This article provides a comprehensive overview of the major housing schemes available in the Karnataka housing board for both urban and rural areas in 2024.
Combined Illegal, Unregulated and Unreported (IUU) Vessel List.Christina Parmionova
The best available, up-to-date information on all fishing and related vessels that appear on the illegal, unregulated, and unreported (IUU) fishing vessel lists published by Regional Fisheries Management Organisations (RFMOs) and related organisations. The aim of the site is to improve the effectiveness of the original IUU lists as a tool for a wide variety of stakeholders to better understand and combat illegal fishing and broader fisheries crime.
To date, the following regional organisations maintain or share lists of vessels that have been found to carry out or support IUU fishing within their own or adjacent convention areas and/or species of competence:
Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR)
Commission for the Conservation of Southern Bluefin Tuna (CCSBT)
General Fisheries Commission for the Mediterranean (GFCM)
Inter-American Tropical Tuna Commission (IATTC)
International Commission for the Conservation of Atlantic Tunas (ICCAT)
Indian Ocean Tuna Commission (IOTC)
Northwest Atlantic Fisheries Organisation (NAFO)
North East Atlantic Fisheries Commission (NEAFC)
North Pacific Fisheries Commission (NPFC)
South East Atlantic Fisheries Organisation (SEAFO)
South Pacific Regional Fisheries Management Organisation (SPRFMO)
Southern Indian Ocean Fisheries Agreement (SIOFA)
Western and Central Pacific Fisheries Commission (WCPFC)
The Combined IUU Fishing Vessel List merges all these sources into one list that provides a single reference point to identify whether a vessel is currently IUU listed. Vessels that have been IUU listed in the past and subsequently delisted (for example because of a change in ownership, or because the vessel is no longer in service) are also retained on the site, so that the site contains a full historic record of IUU listed fishing vessels.
Unlike the IUU lists published on individual RFMO websites, which may update vessel details infrequently or not at all, the Combined IUU Fishing Vessel List is kept up to date with the best available information regarding changes to vessel identity, flag state, ownership, location, and operations.
How To Cultivate Community Affinity Throughout The Generosity JourneyAggregage
This session will dive into how to create rich generosity experiences that foster long-lasting relationships. You’ll walk away with actionable insights to redefine how you engage with your supporters — emphasizing trust, engagement, and community!
AHMR is an interdisciplinary peer-reviewed online journal created to encourage and facilitate the study of all aspects (socio-economic, political, legislative and developmental) of Human Mobility in Africa. Through the publication of original research, policy discussions and evidence research papers AHMR provides a comprehensive forum devoted exclusively to the analysis of contemporaneous trends, migration patterns and some of the most important migration-related issues.
A Guide to AI for Smarter Nonprofits - Dr. Cori Faklaris, UNC CharlotteCori Faklaris
Working with data is a challenge for many organizations. Nonprofits in particular may need to collect and analyze sensitive, incomplete, and/or biased historical data about people. In this talk, Dr. Cori Faklaris of UNC Charlotte provides an overview of current AI capabilities and weaknesses to consider when integrating current AI technologies into the data workflow. The talk is organized around three takeaways: (1) For better or sometimes worse, AI provides you with “infinite interns.” (2) Give people permission & guardrails to learn what works with these “interns” and what doesn’t. (3) Create a roadmap for adding in more AI to assist nonprofit work, along with strategies for bias mitigation.
1. 1
प्रेस प्रकाशनी PRESS RELEASE
संचार �वभाग, क� द्र�य कायार्लय, एस.बी.एस.मागर्, मुंबई-400001
_____________________________________________________________________________________________________________________
Department of Communication, Central Office, S.B.S.Marg, Mumbai-400001
फोन/Phone: 022-22660502
भारतीय �रज़वर् ब�क
RESERVE BANK OF INDIA
0वेबसाइट : www.rbi.org.in/hindi
Website : www.rbi.org.in
इ-मेल email: helpdoc@rbi.org.in
March 27, 2020
Statement on Developmental and Regulatory Policies
This Statement sets out various developmental and
regulatory policies that directly address the stress in financial
conditions caused by COVID-19. They consist of: (i) expanding
liquidity in the system sizeably to ensure that financial markets
and institutions are able to function normally in the face of
COVID-related dislocations; (ii) reinforcing monetary
transmission so that bank credit flows on easier terms are
sustained to those who have been affected by the pandemic;
(iii) easing financial stress caused by COVID-19 disruptions by
relaxing repayment pressures and improving access to working
capital; and (iv) improving the functioning of markets in view of
the high volatility experienced with the onset and spread of the
pandemic. The policy initiatives in this section should be read
in conjunction with the MPC’s decision on monetary policy
actions and stance in its resolution.
I. Liquidity Management
As stated earlier, the first set of measures is intended to
ensure that adequate liquidity is available to all constituents so
that COVID-19 related liquidity constraints are eased.
2. 2
1. Targeted Long Term Repos Operations (TLTROs)
The onset and rapid propagation of COVID-19 in India
has ignited large sell-offs in the domestic equity, bond and forex
markets. With the intensification of redemption pressures,
liquidity premia on instruments such as corporate bonds,
commercial paper and debentures have surged. Combined
with the thinning of trading activity with the COVID outbreak,
financial conditions for these instruments, which are used, inter
alia, to access working capital in the face of the slowdown in
bank credit, have also tightened. In order to mitigate their
adverse effects on economic activity leading to pressures on
cash flows, it has been decided that the Reserve Bank will
conduct auctions of targeted term repos of up to three years
tenor of appropriate sizes for a total amount of up to ` 1,00,000
crore at a floating rate linked to the policy repo rate.
Liquidity availed under the scheme by banks has to be
deployed in investment grade corporate bonds, commercial
paper, and non-convertible debentures over and above the
outstanding level of their investments in these bonds as on
March 27, 2020. Banks shall be required to acquire up to fifty
per cent of their incremental holdings of eligible instruments
from primary market issuances and the remaining fifty per cent
from the secondary market, including from mutual funds and
non-banking finance companies. Investments made by banks
under this facility will be classified as held to maturity (HTM)
even in excess of 25 per cent of total investment permitted to
be included in the HTM portfolio. Exposures under this facility
will also not be reckoned under the large exposure framework.
3. 3
The first TLTRO auction will be held today (March 27,
2020). Following a review of the outcome of this auction, the
subsequent TLTRO auctions will be announced. Details about
this facility are being issued separately.
2. Cash Reserve Ratio
a. Liquidity in the banking system remains ample, as
reflected in absorption of surpluses from the banking
system under reverse repo operations of the LAF of the
order of ` 2.86 lakh crore on a daily average basis during
March 1-25, 2020. It is observed, however, that the
distribution of this liquidity is highly asymmetrical across
the financial system, and starkly so within the banking
system.
As a one-time measure to help banks tide over the
disruption caused by COVID-19, it has been decided to
reduce the cash reserve ratio (CRR) of all banks by 100
basis points to 3.0 per cent of net demand and time
liabilities (NDTL) with effect from the reporting fortnight
beginning March 28, 2020. This reduction in the CRR
would release primary liquidity of about ` 1,37,000 crore
uniformly across the banking system in proportion to
liabilities of constituents rather than in relation to holdings
of excess SLR. This dispensation will be available for a
period of one year ending on March 26, 2021.
b. Furthermore, taking cognisance of hardships faced by
banks in terms of social distancing of staff and
consequent strains on reporting requirements, it has been
decided to reduce the requirement of minimum daily CRR
balance maintenance from 90 per cent to 80 per cent
4. 4
effective from the first day of the reporting fortnight
beginning March 28, 2020. This is a one-time
dispensation available up to June 26, 2020.
3. Marginal Standing Facility
Under the marginal standing facility (MSF), banks can
borrow overnight at their discretion by dipping up to 2 per cent
into the Statutory Liquidity Ratio (SLR). In view of the
exceptionally high volatility in domestic financial markets which
bring in phases of liquidity stress and to provide comfort to the
banking system, it has been decided to increase the limit of 2
per cent to 3 per cent with immediate effect. This measure will
be applicable up to June 30, 2020. This is intended to provide
comfort to the banking system by allowing it to avail an
additional ` 1,37,000 crore of liquidity under the LAF window in
times of stress at the reduced MSF rate announced in the
MPC’s resolution.
These three measures relating to TLTRO, CRR and MSF
will inject a total liquidity of ` 3.74 lakh crore to the system.
4. Widening of the Monetary Policy Rate Corridor
In view of persistent excess liquidity, it has been decided
to widen the existing policy rate corridor from 50 bps to 65 bps.
Under the new corridor, the reverse repo rate under the liquidity
adjustment facility (LAF) would be 40 bps lower than the policy
repo rate. The marginal standing facility (MSF) rate would
continue to be 25 bps above the policy repo rate.
5. 5
II. Regulation and Supervision
Alongside liquidity measures, it is important that efforts
are undertaken to mitigate the burden of debt servicing brought
about by disruptions on account of the fall-out of the COVID-19
pandemic. Such efforts, in turn, will prevent the transmission of
financial stress to the real economy, and will ensure the
continuity of viable businesses and provide relief to borrowers
in these extraordinarily troubled times.
5. Moratorium on Term Loans
All commercial banks (including regional rural banks,
small finance banks and local area banks), co-operative banks,
all-India Financial Institutions, and NBFCs (including housing
finance companies and micro-finance institutions) (“lending
institutions”) are being permitted to allow a moratorium of three
months on payment of instalments in respect of all term loans
outstanding as on March 1, 2020. Accordingly, the repayment
schedule and all subsequent due dates, as also the tenor for
such loans, may be shifted across the board by three months.
6. Deferment of Interest on Working Capital Facilities
In respect of working capital facilities sanctioned in the
form of cash credit/overdraft, lending institutions are being
permitted to allow a deferment of three months on payment of
interest in respect of all such facilities outstanding as on March
1, 2020. The accumulated interest for the period will be paid
after the expiry of the deferment period.
In respect of paragraphs 5 and 6 above, the
moratorium/deferment is being provided specifically to enable
6. 6
the borrowers to tide over the economic fallout from COVID-19.
Hence, the same will not be treated as change in terms and
conditions of loan agreements due to financial difficulty of the
borrowers and, consequently, will not result in asset
classification downgrade. The lending institutions may
accordingly put in place a Board approved policy in this regard.
7. Easing of Working Capital Financing
In respect of working capital facilities sanctioned in the
form of cash credit/overdraft, lending institutions may
recalculate drawing power by reducing margins and/or by
reassessing the working capital cycle for the borrowers. Such
changes in credit terms permitted to the borrowers to
specifically tide over the economic fallout from COVID-19 will
not be treated as concessions granted due to financial
difficulties of the borrower, and consequently, will not result in
asset classification downgrade.
In respect of paragraphs 5, 6 and 7, the rescheduling of
payments will not qualify as a default for the purposes of
supervisory reporting and reporting to credit information
companies (CICs) by the lending institutions. CICs shall ensure
that the actions taken by lending institutions pursuant to the
above announcements do not adversely impact the credit
history of the beneficiaries.
7. 7
8. Deferment of Implementation of Net Stable Funding
Ratio (NSFR)
As part of reforms undertaken in the years following the
global financial crisis, the Basel Committee on Banking
Supervision (BCBS) had introduced the Net Stable Funding
Ratio (NSFR) which reduces funding risk by requiring banks to
fund their activities with sufficiently stable sources of funding
over a time horizon of a year in order to mitigate the risk of
future funding stress. As per the prescribed timeline, banks in
India were required to maintain NSFR of 100 per cent from April
1, 2020. It has now been decided to defer the implementation
of NSFR by six months from April 1, 2020 to October 1, 2020.
9. Deferment of Last Tranche of Capital Conservation Buffer
The capital conservation buffer (CCB) is designed to
ensure that banks build up capital buffers during normal times
(i.e., outside periods of stress) which can be drawn down as
losses are incurred during a stressed period. As per Basel
standards, the CCB was to be implemented in tranches of
0.625 per cent and the transition to full CCB of 2.5 per cent was
set to be completed by March 31, 2019. It was subsequently
decided to defer the implementation of the last tranche of 0.625
per cent of the CCB from March 31, 2019 to March 31, 2020.
Considering the potential stress on account of COVID-19, it has
been decided to further defer the implementation of the last
tranche of 0.625 per cent of the CCB from March 31, 2020 to
September 30, 2020. Consequently, the pre-specified trigger
for loss absorption through conversion/write-down of Additional
8. 8
Tier 1 instruments (PNCPS and PDI) shall remain at 5.5 per
cent of risk-weighted assets (RWAs) and will rise to 6.125 per
cent of RWAs on September 30, 2020.
III. Financial Markets
The decision in respect of financial markets is essentially
of a developmental nature, intended to improve depth and price
discovery in the forex market segments by reducing arbitrage
between onshore and offshore markets. This measure
assumes greater importance in the context of the increased
volatility of the rupee caused by the impact of COVID-19 on
currency markets.
10. Permitting Banks to Deal in Offshore Non-Deliverable
Rupee Derivative Markets (Offshore NDF Rupee Market)
The offshore Indian Rupee (INR) derivative market - the
Non-Deliverable Forward (NDF) market - has been growing
rapidly in recent times. At present, Indian banks are not
permitted to participate in this market, although the benefits of
their participation in the NDF market have been widely
recognised. All aspects of the issue have been examined in
detail and a consensus has emerged in RBI that the time is
apposite to remove segmentation between the onshore and
offshore markets and improve efficiency of price discovery.
Accordingly, it has been decided, in consultation with the
Government, to permit banks in India which
operate International Financial Services Centre (IFSC) Banking
Units (IBUs) to participate in the NDF market with effect from
June 1, 2020. Banks may participate through their branches in
9. 9
India, their foreign branches or through their IBUs. Final directions
are being issued today.
(Yogesh Dayal)
Press Release : 2019-2020/2130 Chief General Manager