New Delhi: The Reserve Bank of India (RBI) has directed banks to send important staff on a minimum of 10 days of surprise leaves. RBI’s motive behind sending a select staff on leaves for a few days is to tighten the noose on its risk management guidelines, aiming to reduce the number of bank frauds in India. 

Moreover, RBI has also asked banks to ensure that the employees sent on special leaves don’t have any access to banking operations via any physical or virtual resources during the holidays. 

“Banks shall ensure that the employees, while on mandatory leave, do not have access to any physical or virtual resources related to their work responsibilities, with the exception of internal/ corporate email which is usually available to all employees for general purposes,” RBI said in its notification. 

However, this is not the first time when RBI had directed banks to send its employees on special leave to increase the scrutiny on bank’s operations to tame the rising number of frauds. Previously, RBI came up with a similar advisory in April 2015. 

Who will get special holidays? 

According to an RBI notification, only a few bank employees in sensitive positions will be sent on special leave. “Employees posted in sensitive positions or areas of operation shall be compulsorily sent on leave for a few days (not less than 10 working days) in a single spell every year, without giving any prior intimation to these employees, thereby maintaining an element of surprise,” the RBI’s notification read. Also Read: Petrol, Diesel Prices Today, July 11, 2021: Petrol above Rs 100 in metros, check rates in your city

All the banks will have to follow the revised RBI instructions within six months. RBI has also asked banks to decide which employees fit the bill under mandatory leave requirements at their board meeting. Also Read: G-20 finance ministers back plan to stop use of tax havens

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New Delhi: The Reserve Bank of India (RBI) is opening the fourth tranche of Sovereign Gold Bond Scheme 2021 for subscriptions on Monday (July 12) for five days. Investors planning to invest in gold can choose the option of the sovereign bond, as it is usually more affordable than current rates. RBI has fixed the issue price at Rs 4,807 per gram for the latest Sovereign Gold Bond offering. 

In an official announcement, RBI said, “The nominal value of the bond based on the simple average closing price (published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity of the last three business days of the week preceding the subscription period July 07, July 08 and July 09, 2021, works out to Rs 4,807/- per gram of gold.” 

What are Sovereign Gold Bonds? 

The RBI had introduced Sovereign Gold Bonds in 2015. Basically, these bonds are similar to other government bonds. However, Sovereign Gold Bonds are denominated in grams of gold, instead of money. 

Who can buy Sovereign Gold Bonds? 

At present, Resident individuals, Hindu Undivided Family (HUF), Trusts, Universities and Charitable Institutions can subscribe to Sovereign Gold Bonds. 

What is the minimum investment in Sovereign Gold Bonds? 

According to the current rules, an investor has to buy at least one gram of gold during the subscription window. This means that you’ll invest at least Rs 4,807 in Sovereign Gold Bonds. 

Meanwhile, an individual investor can buy a maximum of 4 Kg gold. However, the upper cap limit for trusts and similar entities is 20 Kg. 

What is the minimum tenure of Sovereign Gold Bonds? 

Sovereign Gold Bonds are offered with a tenure of eight years. However, investors are given an option to exit after the fifth year itself. 

How to buy Sovereign Gold Bonds? 

Investors can buy gold bonds from commercial banks, Stock Holding Corporation of India Limited (SHCIL), post offices designated by RBI and recognised stock exchanges. Customers can buy gold bonds directly or even through their agents. Also Read: Facebook removed 5,381 malicious accounts, Groups in June 

How to get Sovereign Gold Bonds at a discounted price?

Investors can also invest in gold bonds online. RBI is offering a discount of Rs 50 per gram to investors buying bonds completely online. Also Read: SBI alert! Net banking services will remain suspended on July 10, 11, check timings

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New Delhi: The Reserve Bank of India (RBI) has slapped 14 banks with cash penalties on 14 banks due to their non-compliance with certain provisions. Some of the notable banks which came under the radar of RBI include Bank of Baroda, State Bank of India (SBI), Bandhan Bank, Bank of Maharashtra, Central Bank of India, Credit Suisse AG, Indian Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Punjab & Sind Bank, South Indian Bank, The Jammu & Kashmir Bank and Utkarsh Small Finance Bank. 

The banks were penalised for not complying with RBI directives on lending to non-banking financial companies, bank finance to non-banking financial companies, loans and advances – statutory and other restrictions, among other norms, according to an IANS report. 

In total, RBI has slapped a total penalty of Rs 14.50 crore, of which Bank of Baroda is paying the highest amount at Rs 2 crore while the State Bank of India is fined with the lowest amount at Rs 50 lakhs. 

“A scrutiny in the accounts of the companies of a group was carried out by the RBI and it was observed that the banks had failed to comply with provisions of one or more of the aforesaid directions issued by the RBI and or contravened provisions of the Banking Regulation Act, 1949,” the RBI said in its statement. 

The central bank also noted that the replies that banks gave provided it are duly considered “to the extent the charges of non-compliance with RBI directions or contraventions of provisions of Banking Regulation Act, 1949 were sustained.” 

As a result, RBI has concluded that it warranted the imposition of cash penalty on the fourteen banks. “In furtherance to the same, `Notices` were issued to the banks advising them to show cause as to why penalty should not be imposed for non-compliance with the directions or contraventions of provisions of Banking Regulation Act, 1949,” the RBI said. 

Will fine impact customers? 

RBI said that the rules related to Central Repository of Large Common Exposures, Central Repository of Information on Large Credits (CRILC) reporting in banks, operating guidelines of Small Finance Bank have been compromised by the banks. Also Read: Earned leaves to increase to 300, changes in salary and PF? Big decisions will be taken soon 

Banks have also violated section 19(2) and section 20(1) of the Banking Regulation Act, 1949, RBI noted. Since the penalties are imposed on banks for lack of regulatory compliance, the fines won’t have any impact on the banks’ customers. Also Read: Sensex ends above 53K for first time, Nifty rose to record peak

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Activity in India`s dominant services sector contracted sharply in June as tighter restrictions to contain a resurgence of coronavirus cases hammered demand and forced firms to shed jobs at a rapid clip, a private survey showed on Monday.

Asia`s third-largest economy, which has already recorded more than 400,000 COVID-19 deaths, is still reporting over 40,000 coronavirus cases per day, taking the total number of infections to over 30.5 million.

IHS Markit`s Services Purchasing Managers` Index plunged to 41.2 last month from an already depressed 46.4 in May. That was its lowest reading since July 2020 and well below the 50-level separating growth from contraction.

“Given the current COVID-19 situation in India, it was expected that the service sector would take a hit,” said Pollyanna De Lima, economics associate director at IHS Markit.

“PMI data for June showed quicker declines in new business, output and employment that were sharp but much softer than those recorded in the first lockdown.”

Muted demand sank the new business sub-index to its lowest since July 2020.

As a result, firms shed headcount for a seventh straight month, with the fastest reduction rate recorded in June. A Reuters poll taken around a month ago showed the job crisis may worsen over the coming year. [ECILT/IN]

The depressed services sector results are in line with the overall downturn in business activity, underscored by a sister survey on Thursday which showed manufacturing activity contracted for the first time in almost a year in June.

Input prices rose again last month on high raw material and transportation costs, indicating inflation could stay above the Reserve Bank of India`s comfort range of 2-6% in coming months.

India`s retail inflation rose above 6% in May to a six-month high. Yet the RBI is not expected to tighten monetary policy this fiscal year as it looks to support economic growth.

The contraction in both manufacturing and services activity sent the overall composite index plunging to 43.1 in June from 48.1 in May.

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July comes with a lot of holidays, especially for banks. This month will have 15 days in total, according to the official list released by the Reserve Bank of India (RBI). Out of 15 days, 9 holidays would come under the categories of state-wise holidays, religious holidays, or festivals. The rest of the 6 days are the usual weekends off.

July 21 would be celebrated as Bakri Id and that will be a common holiday for the banks across the country and almost each and every lender will remain closed.

The RBI has further categorised these holidays under sections such as– ‘Holiday under Negotiable Instruments Act’, ‘Holiday under Negotiable Instruments Act’ and ‘Real-Time Gross Settlement Holiday and Banks’ Closing of Accounts’. The upcoming holidays will also be under the bracket of ‘Holiday under Negotiable Instruments Act.’

Check the full list of the 15 holidays for July 2021:

1) 4 July 2021 – Sunday (Weekend off)

2) 10 July 2021 – Second Saturday (Weekend off)

3) 11 July 2021 – Sunday (Weekend off)

4) 12 July 2021 – Monday – Kang (Rathajatra) / Rath Yatra (Bhubaneswar, Imphal)

5) 13 July 2021 – Tuesday – Bhanu Jayanti (Gangtok)

6) 14 July 2021 – Wednesday – Drukpa Tshechi (Gangtok)

7) 16 July 2021- Thursday – Harela Puja (Dehradun)

8) 17 July 2021 – Saturday – U Tirot Sing Day / Kharchi Puja (Agartala, Shillong)

9) 18 July 2021 – Sunday (Weekend off)

10) 19 July 2021 – Monday – Guru Rimpoche’s Thungkar Tshechu (Gangtok)

11) 20 July 2021 – Tuesday – Bakrid (Jammu, Kochi, Srinagar, Thiruvananthapuram)

12) 21 July 2021 – Tuesday – Eid al Adha (Nation-wide with the exception of Aizawl, Bhubaneswar, Gangtok, Kochi and Thiruvananthapuram)

13) 24 July 2021 – 4th Saturday (Weekend off)

14) 25 July 2021 – Sunday (Weekend off)

15) 31 July 2021- Saturday – Ker Puja (Agartala)

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Mumbai: The second wave of the pandemic took a “grievous toll” on India, but the dented economic activity has started recovering from late-May, Reserve Bank Governor Shaktikanta Das said on Thursday. In a first, Das flagged the rising data breaches and cyber attacks as a risk facing the economy, along with others like firming global commodity prices.

“The recovery that had commenced in the second half of 2020-21 was dented in April-May 2021, but with the wave of infections abating as rapidly as it had set in, economic activity has started to look up in late May and early June,” Das wrote in his foreword to the bi-annual Financial Stability Report prepared by the RBI.

The report said the gross non-performing assets of banks have been stable at 7.5 per cent in March 2021 — the same level as six months ago — but are expected to go up to 9.8 per cent in March 2022, as per its baseline scenario.

Das said the dent on balance sheets and performance of financial institutions in India have been much less than what was projected earlier, but was quick to add that a clearer picture will emerge as the effects of regulatory reliefs fully work their way through.

He also said capital and liquidity buffers at financial institutions are “reasonably resilient” to withstand any future shocks.

The financial system is on the front foot to aid recovery, but the priority is to maintain and preserve financial stability, he said.

Domestic financial markets are also boosted by the strengthening signs of the pandemic’s abatement, the growing pace and breadth of the vaccination drive and renewed hopes of the economy clawing back lost ground as it unlocks, he said.

“…While the recovery is underway, new risks have emerged on the horizon and these include the still nascent and mending state of the upturn, vulnerable as it is to shocks and future waves of the pandemic; international commodity prices and inflationary pressures; global spillovers amid high uncertainty; and rising incidence of data breaches and cyber attacks,” he said.

The governor emphasised that sustained policy support accompanied by further fortification of capital and liquidity buffers by financial entities remain vital to tackle the risks.

The financial system can take the lead in creating the conditions for the economy to recover and thrive, he said, adding that stronger capital positions, good governance and efficiency in financial intermediation will be the touchstones of this endeavour. 

New Delhi: In India, banks will be closed for 15 days in July. However, according to the list of holidays released by the Reserve Bank of India, not all the 15 banking holidays will apply to all states and Union Territories (UTs), as banks will be shut for nine days due to regional festivals while they will be shut for six days marking usual weekend holidays. The RBI’s holiday calendar pointed out that certain bank holidays (festive offs) will be restricted to local or regional branches.

However, there are certain festive holidays on which banks across the country will remain shut in July. For instance, on July 21, banks in India will remain closed on the occasion of Eid-al-Adha or Bakrid. Also Read: Delhi witnesses hottest day of the year, monsoon unlikely for national capital, adjoining areas till July 7 

All banks including state-owned banks, private lenders, foreign banks, cooperative banks as well as regional banks have been directed to remain closed on notified holidays, according to RBI directives. Also Read: Factory activity shrinks for first time in 11 months amid COVID-19 crisis

List of holidays in July 2021

1. 4 July 2021 – Sunday

2. 10 July 2021 – 2nd Saturday

3. 11 July 2021 – Sunday

4. 12 July 2021 – Monday – Kang (Rajasthan), Rath Yatra (Bhubaneswar, Imphal)

5. 13 July 2021 – Tuesday – Bhanu Jayanti (Martyr’s Day- Jammu & Kashmir, Bhanu Jayanti- Sikkim)

6. 14 July 2021 – Drukpa Tshechi (Gangtok)

7. 16 July 2021- Thursday – Harela Puja (Dehradun)

8. 17 July 2021 – Kharchi Puja (Agartala, Shillong)

9. 18 July 2021 – Sunday

10. 19 July 2021 – Monday – Guru Rimpoche’s Thungkar Tshechu (Sikkim) 

11. 20 July 2021 – Tuesday – Eid al Adha (Jammu, Kochi, Srinagar, Thiruvananthapuram)

12. 21 July 2021 – Wednesday – Eid al Adha (Across the country)

13. 24 July 2021 – 4th Saturday

14. 25 July 2021 – Sunday

15. 31 July 2021- Saturday – Ker Puja (Agartala)

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That essentially means that banks will be closed for about half a month in the month of July. There will be 15 days of holidays in July for the banking sector due to weekend offs and various other festivals. According to the Reserve Bank of India (RBI), there will be 6 weekends and 9 festive holidays in July. The 6 weekend holidays include the second, fourth Saturday and four Sunday holidays.
  
Festivals like Rath Yatra, Bhanu Jayanti, Eid al-Adha, Ker Puja will be celebrated in July. The Rath Yatra on 12th July is celebrated mainly in Imphal, Bhubaneswar. The last holiday, Ker Puja, is celebrated in Tripura, on July 31. Let’s see the holidays for banks in July.

4th July – Sunday Holiday

10th July – Second Saturday of the month

11th July – Sunday Holiday

12th July – Kang Rath-Yatra Festival

13th July – Bhanu Jayanti Holiday

14th July –  Drukpa Tsheshi Festival

16th July –  Harela Festival

17th July – Kharchi Puja Holiday

18th July – Sunday Holiday 

19th July – Guru Rimpoche’s Trungkar Tshechu festival 

20th July – Eid al-Adha (Bakrid)  

21st July –  Eid-ul-Zuha

24th July –  Fourth Saturday of the month

25th July –  Sunday Holiday

31st July – Ker puja holiday

Holidays do not apply simultaneously in all states
It is worth noting that RBI holidays do not apply to every state simultaneously. There are holidays in banks according to the festivals locally celebrated in different states. The complete list of bank holidays on the official website of RBI can help you know which banks in your state will be closed for the celebration of a local festival.   

Mumbai: The Reserve Bank of India (RBI) has extended the restrictions on Hindu Co-operative Bank Limited, based out of Pathankot, Punjab, in terms of withdrawal and deposit limits along with grant of loans, till September 24, 2021.

RBI had first imposed the restrictions with effect from the close of business on March 25, 2019, under Sub-Section (1) of Section 35A read with Section 56 of the Banking Regulation Act, 1949(AACS), in the public interest in view of the weakened financial condition of the bank.

The validity of the directions has been extended from time to time and were last extended till June 24, 2021.

“These directions shall continue to apply to the bank for a further period of three months from June 25, 2021 to September 24, 2021, subject to review,” said an RBI statement on Friday.

The central bank further said that it may consider modifications in directions depending upon the circumstances and the issue of directions should not per se be construed as cancellation of banking license.

“The bank will be able to undertake banking business with restrictions till its financial position improves,” it said.

The notification dated March 13, 2019 by the central bank said that without prior approval, the bank will not be able to grant or renew any loan, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, among others.

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New Delhi: You should complete all your important bank-related work today because banks will be closed for the next 2 days. In Jammu and Srinagar, banks will remain closed for the next 3 days from today. In the North-East, banks will be closed on June 30 in Aizawl, the capital of Mizoram.  

The apex bank of the country, the Reserve Bank of India, releases the list of holidays every month for all the banks in the country. This information is provided so that bank account holders do not face any issues.

June 26 is the fourth Saturday of this month and thus it will be a bank holiday across the country, while all the banks will be closed the following day as it will be a Sunday.

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Holiday in Jammu and Srinagar banks today 

Today banks in Jammu and Srinagar are closed on the occasion of Guru Hargobind’s birth anniversary. The banks will be closed in Mizoram, including the capital Aizawal, on June 30, i.e. Wednesday, as this day is observed as a regional public holiday – ‘Remna Ni’. All banks in the country will remain open on 28 and 29 June so customers can complete all their important work. 

Banks will remain closed on this day 

• 25 June – Birth anniversary of Guru Hargobind (Jammu and Srinagar banks closed)
• 26 June – Fourth Saturday of the month (All banks closed)
• 27 June – Sunday (All banks closed)
• 30th June- Remna Ni (Banks closed in Aizawl, Mizoram)

New Delhi: The Delhi consumer commission has ruled that banks cannot change home loan interest rates without taking the consent of borrowers. It also called the automatic change in interest rates an “unfair trade practice”. Justice Sangita Dhingra of the commission noted that banks were obliged to inform borrowers and seek their consent whenever home loan interest rates were being changed under the floating rate of interest plan. Recalling a 2015 judgment of the Supreme Court, as well as a 2019 judgment of the national consumer forum, the commission did not dispute that in cases of floating rate of interest, the interest on loan kept fluctuating as per the approval of the Reserve Bank of India (RBI).

Also, by inking a loan agreement a borrower would agree to these interest alterations as well as changes in the tenure of the loan repayment. However, the commission maintained that an opportunity must be afforded to the borrower before changing the floating rate of interest.

What are the different interest rate options offered by banks to borrowers?

Usually, banks offer either of the following loan options –Floating Rate Home Loans and Fixed Rate Home Loans.

For a Fixed Rate Loan, the rate of interest is fixed either for the entire tenure of the loan or for a certain part of the tenure of the loan. In case of a pure fixed loan, the EMI that a borrower is due to the bank remains constant. However, if a bank offers a Loan which is fixed only for a certain period of the tenure of the loan, RBI says that borrowers should try to elicit information from the bank whether the rates may be raised after the period (reset clause). Borrowers may also try to negotiate a lock-in that should include the rate that you have agreed upon initially and the period the lock-in lasts, says the central bank. The EMI of a floating rate loan changes with changes in market interest rates. If market rates increase, your repayment increases. When rates fall, your dues also fall.

New Delhi: The Reserve Bank of India (RBI) imposed penalties on three cooperative banks (co-operative banks) on Monday. RBI imposed a fine of Rs 23 lakh on three cooperative banks for violating various norms. RBI imposed a penalty of Rs 12 lakh on Mogavira Sahakari Bank Ltd., Rs 10 lakh on Indapur Urban Co-operative Bank and Rs 1 lakh on Baramati Sahakari Bank Ltd., Baramati.

RBI said that the inspection report of Mogavira Co-operative Bank revealed that the bank had not fully transferred the unclaimed deposits to the Depositor Education and Awareness (DEA) Fund nor conducted the annual review of dormant accounts. It was also observed that there was no periodic review of the categorisation of accounts and there were many customers with the same Unique Customer Identification Code (UCIC).

Also read: Vaya Vandana Yojana: By investing in this scheme, you can get a monthly pension of Rs 9250, know the benefits 

Bank did not adhere to aggregate limit on unsecured advances.
Regarding Indapur Urban Co-operative Bank, RBI said that its inspection report revealed that the bank did not comply with the aggregate limit of unsecured advances and there was no process of periodic review of risk categorisation of accounts. Also, there is no robust system in place to generate alerts when transactions were inconsistent. Regarding Baramati Sahakari Bank, RBI said that the bank exceeded the prudential inter-bank (single bank) exposure risk limit.

Penalty imposed for lack of compliance. 
The RBI said the penalty has been imposed on account of deficiencies in regulatory compliance in each case and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Loan Rules: After the death of a person, what happens to their loan, who has to pay the dues? Find Out

New Delhi: In a recent notification, the Reserve Bank of India (RBI) has allowed the banks to raise the charges for cash and non-cash ATM transactions beyond the threshold of the free monthly limit. From next year onwards, bank customers will have to pay Rs 21 per transaction instead of Rs 20 if they exceed the monthly limit of free transactions.

What are the banks’ charges?

Most private and public banks in India currently allow five free ATM transactions (inclusive of financial and non-financial transactions) in urban cities and towns from their own bank ATMs. In case you have exhausted the monthly limit, then there are small charges by the bank that customers need to bear to keep the ATMs functional.

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Besides, these charges, effective August 1, 2021, banks are also allowed to increase interchange fees per transaction from Rs15 to Rs17 for financial transactions and from Rs5 to Rs6 for non-financial transactions in all centres, according to the RBI circular.

But some private banks are offering unlimited free ATM transactions to their customers including IndusInd Bank and IDBI Bank.

IDBI Bank offers free ATM transactions in line with the RBI prescribed minimum free limits. It also offers five free transactions at its own ATMs while in other Bank ATMs, it offers three transactions free at six metro locations and five transactions free at other locations. “The bank however offers unlimited free ATM transactions in few select product variants as per the product design,” informed Jorty Chacko, Executive Director of IDBI Bank to the business publication Mint.

IndusInd Bank also offers unlimited free ATM transactions at any bank ATM in India. “Unlimited Free ATM Withdrawal with your IndusInd Bank Debit Card across any ATM in India,” says the bank’s website.

In fact “Citi Bank still offers unlimited free transactions,” as per the BankBazaar website.

Meanwhile, the country’s largest lender State Bank of India (SBI) allows unlimited transactions at State Bank Group (SBG) ATMs for those customers who maintain an average balance of more than Rs25,000 in their savings accounts. Those maintaining an average balance of more than Rs1,00,000 in their savings accounts will also be eligible for unlimited transactions at SBG ATMs as well as other banks ATMs. SBI had revised its ATM withdrawal rules on 1 July 2020.

New Delhi: In its monthly bulletin for June 2021, the Reserve Bank of India (RBI) estimated a loss of Rs 2 lakh crore in output during the current fiscal year pertaining to the second wave of coronavirus pandemic. 

While talking about the struggle of the economy to wrestle the second wave, the central bank said that while the second wave has hit domestic demand pretty hard, on the brighter side, several aspects of aggregate supply conditions – agriculture and contactless services are holding up well, while industrial production and exports have surged compared to last year amidst pandemic protocols.

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“Going forward, the speed and scale of vaccination will shape the path of recovery. The economy has the resilience and the fundamentals to bounce back from the pandemic and unshackle itself from pre-existing cyclical and structural hindrances,” it said.

Giving more details about the economic impact the second wave has had, RBI said that there has been a significant decline in the deposits, indicating a clear drop in household savings as compared to the first wave.

“While Covid has tested the limits of flexibility in fiscal policy frameworks in India as in the rest of the world, it has offered unique opportunity to redefine fiscal policy in a manner that emphasises ‘how’ over ‘how much,” the report said.

Several agencies, including RBI have already lowered their growth expectations for the fiscal year. In RBI’s revised GDP forecast in the latest monetary policy estimates, it slashed growth projections from 10.5 percent to 9.5 percent. The state of the economy report released on Wednesday said the projection was on the assumption that real GDP will grow by 18.5 percent in the first quarter which is on a much lower base as compared to last year.

Mumbai: A report by the Reserve Bank of India has stated that the speed and scale of vaccination against Covid-19 will shape the path of economic recovery, which according to the officials, has the resilience and the fundamentals to bounce back from the pandemic and unshackle itself from pre-existing cyclical and structural hindrances.

As per the current assessment, the second wave of the pandemic has mainly hit the domestic demand, the RBI stated in an article on the ‘State of economy’ written jointly by RBI Deputy Governor MD Patra and other officials.

Observing that vaccines by themselves will not end the pandemic, the article said, “we have to learn to live with the virus, complementing vaccines with ramping up investment in healthcare, logistics and research.

“The pandemic is a real shock with real consequences. Hence, there is a need to ensure that the recovery is built on a solid foundation of business investment and productivity growth.”

The Indian economy, it added, continues to wrestle with the second wave of the pandemic, though cautious optimism is returning.

Authors of the article include, RBI Deputy Governor Michael Debabrata Patra. The central bank, however, said views expressed in the article are those of the authors and do not necessarily represent the views of the Reserve Bank of India.

On the brighter side several aspects of aggregate supply conditions – agriculture and contactless services are holding up, while industrial production and exports have surged amidst pandemic protocols, it said.

“Going forward, the speed and scale of vaccination will shape the path of recovery. The economy has the resilience and the fundamentals to bounce back from the pandemic and unshackle itself from pre-existing cyclical and structural hindrances,” the article said.

The article notes that the finance ministry estimates that in order to achieve herd immunity and regain the momentum of the economic recovery, the target population to be vaccinated is 70 crore by September 2021 and around 113 crore more doses are needed; accordingly, around 93 lakh vaccinations are required per day to achieve the herd immunity.

While the peak daily vaccination rate attained till date is 42.65 lakh, doubling the shifts and possibly vaccinating 24×7 for a couple of months can enable the ambitious, but possible, throughput of 1 crore shots a day , as per the Monthly Economic Review (May 2020), Department of Economic Affairs, Ministry of Finance.

The article also said that an aspect of RBI’s Annual Report that has raised considerable “heat and dust” in the media is the surplus transferred to the government.

Mainly stemming from saving on balance sheet provisions and employees’ superannuation and other funds, the surplus constitutes just 0.44 per cent of GDP (which is taken as a measure of seigniorage), it said.

Referring to findings of a comprehensive research on central banking in developing countries, the article said: “From the point of the surplus transfer alone, therefore, the Reserve Bank can be characterised as ‘free-ranging’ and conducting independent monetary policy, i.e., independent of fiscal dominance”.

As per another article published in the RBI’s monthly Bulletin titled ‘Fiscal Framework and Quality of Expenditure in India’, the Covid-19 pandemic necessitated an overwhelming fiscal response from governments across the world. As India unwinds the fiscal stimulus and embarks on the path of fiscal adjustment, it is necessary to emphasise on ‘how’ over ‘how much’, it said.

RBI stated that the article proposes a few quantifiable indicators, viz, ratios of revenue expenditure to capital outlay and revenue deficit to gross fiscal deficit along with threshold levels for them that can be suitably blended into the fiscal fabric for a sustainable growth trajectory.

(With Agency Inputs)

New Delhi: Coronavirus on one hand and rising inflation on the other has made life miserable for the common man. According to data from the National Statistical Office (NSO), retail inflation rose to 6.3 percent in May, the highest in six months, due to the increase in the prices of food items like edible oils, fruits, and eggs.

In April, inflation stood at 4.23 percent while food inflation stood at 5.01 percent in May.

Wholesale Inflation Increasing For 5 Months In A Row

Inflation based on the Wholesale Price Index (WPI) climbed up to 12.94 percent in May. The reason for this is the increase in the prices of crude oil and manufactured goods and last year’s COVID-19 lockdown.

Earlier, in November 2020, the highest rate of retail inflation was 6.93 percent. In May 2020, wholesale inflation was at a negative 3.7 percent, while in April 2021, it reached a double-digit figure of 10.49 percent. This is the fifth month in a row where the wholesale inflation rate has increased.

What Became More Expensive Between April-May 2021?

• Fuel prices up by 38 percent
• 10 percent increase in the prices of pulses
• The price of edible oil increased by 30 percent
• Fruits became 12% costlier
• Eggs and soft drinks prices shot up by 15%

The prices of meat and fish, eggs, fruits, pulses, and related products have increased by 9.03 percent, 15.16 percent, 11.89 percent, and 9.39 percent respectively on an annual basis.

Inflation in the fuel and power category has increased to 11.58 percent. With the rapid rise in prices, WPI inflation in the fuel and power segment rose to 37.61 percent in May from 20.94 percent in April.

Price Of Onions Kept Rising

In the case of manufactured products, wholesale inflation stood at 10.8 percent in May (compared to 9.01 percent in the previous month). However, in the case of food articles, wholesale inflation declined marginally to 4.31 percent in May. During the same period, the price of onions increased. Onion prices escalated by 23.24 percent in May, while they declined by 19.72 percent in April.

The Reserve Bank on Monday put in place restrictions with respect to investments in payments system operators (PSOs) by new entities from jurisdictions that have weak measures to deal with money laundering and terrorist financing activities.

The Financial Action Task Force (FATF) periodically identifies jurisdictions with weak measures to combat money laundering and terrorist financing activities. Jurisdictions that do not fall under ‘high-risk’ and ‘increased monitoring’ categories are considered as FATF-compliant ones.

“Investments in PSOs from FATF non-compliant jurisdictions shall not be treated at par with that from compliant jurisdictions,” the Reserve Bank of India (RBI) said in a notification.

According to the central bank, new investors from non-compliant FATF jurisdictions would not be permitted to acquire, directly or indirectly, ‘significant influence’ in a PSO.

“Fresh investments (directly or indirectly) from such jurisdictions, in aggregate, should account for less than 20 percent of the voting power (including potential voting power) of the PSO,” it said, adding that the restriction would be applicable only for new investors.

Further, the RBI noted that investors in existing PSOs holding their investments prior to the classification of the source or intermediate jurisdictions as FATF non-compliant, may continue with the investments. Such investors can also bring in additional investments as per extant regulations so as to support continuity of business in India, it added.

The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog.

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New Delhi: In a latest move that will have a bearing on the common man, the Reserve Bank of India on Thursday allowed banks to increase charges for cash and non-cash ATM transactions beyond free monthly permissible limit from next year.

What it means for customers?

For customers, it means they have to pay Rs 21 per transaction, instead of Rs 20, with effect from January 1, 2022 if the monthly limit of free transactions are exceeded. “To compensate the banks for the higher interchange fee and given the general escalation in costs, they are allowed to increase the customer charges to Rs 21 per transaction. This increase shall be effective from January 1, 2022,” the RBI said in a circular.

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Normally, bank customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank ATMs. Apart from this, three free transactions are allowed from other bank ATMs in metro centres and five in non-metro centres.

What are other significant changes?

Banks can also raise interchange fee per transaction from Rs 15 to Rs 17 for financial transactions and from Rs 5 to Rs 6 for non-financial transactions in all centres, as per the RBI circular. ATMs are deployed by banks for serving their own customers and also provide services to other banks” customers as acquirers where they earn interchange income. It simply means that every time Bank A’s customer uses their card to makes a transaction at an ATM deployed by Bank B, the former bank will be liable to pay a fee to latter, which is termed as the interchange fee.  Hence, if you are using other banks’ ATMs beyond the free limit, then customers will have to pay more from next year.

What’s the reason behind this hike?

The charges have been allowed to be increased due to increasing cost of ATM deployment and expenses towards ATM maintenance incurred by banks/white label ATM operators besides the need to balance expectations of stakeholder entities and customer convenience.

The apex bank had set up a committee in June 2019 under the chairmanship of the chief executive of Indian Banks” Association to review the entire gamut of Automated Teller Machine (ATM) charges and fees with particular focus on interchange structure for ATM transactions.

The current charges have been decided based on the suggestions of the panel.

“It is also observed that the last change in interchange fee structure for ATM transactions was in August 2012, while the charges payable by customers were last revised in August 2014. A substantial time has thus elapsed since these fees were last changed,” it said.

These instructions shall also apply to transactions done at cash recycler machines, other than for cash deposit transactions.

 

There were 1,15,605 onsite ATMs and 97,970 off-site ones as on March 31, 2021. About 90 crore debit cards issued by different banks were outstanding at end-March 2021.

New Delhi: The Reserve Bank of India has announced a couple of changes in the ATM rules. While these rules are in line with the long pressing demands by the payment services, banks and white label ATM operators for customers it also means a little more burden on their pocket.

Here are 5 big rule changes related to ATM card you must know

1.  RBI has now permitted banks to increase charges for cash and non-cash ATM transactions beyond free monthly permissible limit from next year. “To compensate the banks for the higher interchange fee and given the general escalation in costs, they are allowed to increase the customer charges to Rs 21 per transaction. This increase shall be effective from January 1, 2022,” the RBI said in a circular.

2. Bank customers will have to pay Rs 21 per transaction, instead of Rs 20, with effect from January 1, 2022, if they exceed the monthly limit of free transactions.

3. Customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank ATMs.

4. Customers are also eligible for free transactions (inclusive of financial and non-financial transactions) from other bank ATMs viz. three transactions in metro centres and five transactions in non-metro centres. Beyond the free transactions, the ceiling/cap on customer charges is Rs 20 per transaction.

5. In another announcement, RBI has said, effective August 1, 2021, banks are allowed to increase interchange fee per transaction from Rs 15 to Rs 17 for financial transactions and from Rs 5 to Rs 6 for non-financial transactions in all centres, the circular said. ATMs are deployed by banks for serving their own customers and also provide services to other banks’ customers as acquirers where they earn interchange income.

New Delhi: The Reserve Bank of India (RBI) has increased the fees charged on cash withdrawal from Rs 20 to Rs 21. Currently, banks in India offer five free ATM transactions, including both financial and non-financial. 

This means that Rs 21 will be charged from the sixth ATM transaction onwards. Banks will now charge Rs 17, instead of Rs 16, as interchane fee, a charge paid by the bank that issues the card to the bank where it is used to withdraw cash. 

Meanwhile, the central bank has also increased the fees for non-financial transactions at ATMs from Rs 5 to Rs 6. 

In its official announcement, RBI said that the newly charged will come into effect from August 1, 2021. “To compensate the banks for the higher interchange fee and given the general escalation in costs, they are allowed to increase the customer charges to ₹21 per transaction. This increase shall be effective from January 1, 2022,” the RBI said in a statement.

Customers are allowed to do three free transactions from other bank ATMs in metro centres. In non-metro centres, the limit is capped at five.

The RBI on Tuesday asked banks to preserve the CCTV recordings of their branches and currency chests from November 8, 2016, to December 30, 2016, till further orders with a view to assisting the enforcement agencies to take actions against persons involved in illegal activities during the demonetisation period.

The government had demonetised the then in circulation high-value currency notes of Rs 500 and Rs 1,000 on November 8, 2016, with an aim to check blackmoney and curb terror funding. As part of the exercise, the government gave the opportunity to the people to exchange junked currency notes (referred as Specified Bank Notes) or deposit them in their bank accounts.

New currency notes of Rs 500 and Rs 2,000 denominations were also issued after withdrawal of SBNs. Huge crowds were witnessed at bank branches across the country for exchanging or depositing the demonetised currency.

On the basis of various inputs, the investigative agencies also started probing matters relating to illegal accumulation of new currency notes.

In order to facilitate such investigations, the RBI has asked the banks not to destroy the CCTV recordings of the period of demonetisation till further orders.

“…Keeping in view the investigations pending with law enforcement agencies, proceedings pending at various courts, you are advised to preserve the CCTV recordings of operations at bank branches and currency chests for the period from November 08, 2016 to December 30, 2016 in a proper way, till further orders,” the RBI said in a circular to banks.

The present order is a continuation of an earlier advisory issued to the lenders in December 2016 to preserve the CCTV footage of operations at bank branches and currency chests.

Of the Rs 15.41 lakh crore worth Rs 500 and Rs 1,000 notes in circulation on November 8, 2016, when the note ban was announced, notes worth Rs 15.31 lakh crore have been returned.

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The real estate sector has been hardest hit by the second wave of the COVID-19 pandemic and the home loan interest rate will continue to remain low as the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) has kept the key benchmark rates unchanged on June 4, i.e. repo rate at 4% and reverse repo rate at 3.35%.

The low home loan interest rate is definitely going to benefit homebuyers in the near future. Picture this, Pradeep Aggarwal, chairman of ASSOCHAM told News 18 that, “ The low home loan interest rate has been a crucial demand of real estate, and the RBI has helped the sector by maintaining the status quo.”

The COVID pandemic has adversely affected the real estate sector in the last two months and for economic recovery, the RBI has maintained the repo rate unchanged at 4% and reverse repo rate at 3.35%. Moreover, the Central bank has also decided to maintain an ‘accommodative stance’ as long as necessary to mitigate the impact of the COVID-19 pandemic.

“It is the sixth time consequently that RBI has kept the benchmark rates unchanged. While it reflects a response to the COVID-19 pandemic challenges, it is advantageous for home loan borrowers,” said Niranjan Hiranandani, national president, NAREDCO. “The floating retail loan rates continue to be at the lowest level over the past two decades and this is likely to continue for some more time,” NAREDCO President added.  

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After the release of GDP data, NITI Aayog Vice-Chairman (VC) Rajiv Kumar said on June 5 said that the economic recovery will start from June and would gather steam from July onwards. This comes as the country suffers from financial losses due to the COVID-19 pandemic. 

Kumar’s predictions came after the country’s apex bank RBI lowered the country’s growth forecast for the current fiscal by a percentage point to 9.5% from 10.5%.

NITI Aayog’s VC said in a statement, “The recovery will start from June itself and will get pace from July 2021.”

Kumar further added that the RBI had slashed India’s GDP growth forecast for FY22 from 10.5% to 9.5%  due to the impact of the second wave of the coronavirus pandemic. He noted that the impact of the COVID-19 second wave will be felt in the first quarter of FY22.

“RBI cuts GDP growth forecast for FY22 to 9.5% from 10.5% due to the impact of 2nd wave, which is going to impact our economy in 1st quarter,” Rajiv Kumar said, adding that the economy will recover “below than expected in 1st quarter” and will grow at a pace of “10%-10.5% in FY22.”

Rajiv Kumar is hopeful that pandemic will not have much impact on fiscal deficit and disinvestment targets.”COVID-19 has forced the government to invest more, spend more on public infrastructure, but it will not have much impact as we have seen our GST collection has increased. In the budget also our revenue target were kept very conservative. So I think we will not have to worry much about our fiscal deficit target. If we see the data of the International Monetary Fund (IMF) which stated that fiscal deficit target globally is on an average of around 9.8%. Our fiscal deficit is not more than others. I am confident that we will achieve our disinvestment target,” Kumar further said.

Speaking about the possibility of a third wave after a disastrous second wave created havoc in the country, Kumar said, “Hope for the best, prepare for the worst.”We are fully prepared for the third wave. Our health infrastructure is much better than earlier. If by any chance a third wave strikes, it will not impact as much as I have seen. People are not careless now. They are taking full precautions and are getting vaccinated also. Thus, I believe that a third wave will not make much impact.”Kumar said he is quite hopeful that the government will vaccinate everyone above the age of 18 years.

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The Reserve Bank of India (RBI) on Friday opened a separate liquidity window of Rs 15,000 crore till March 31 next year to mitigate the adverse impact of Covid-19`s second wave on certain contact-intensive sectors.

The facility will have tenors of up to three years at repo rate (4 percent), said RBI Governor Shaktikanta Das. Under the scheme, banks can provide fresh lending support to hotels and restaurants; tourism — travel agents, tour operators and adventure/heritage facilities; aviation ancillary services — ground handling and supply chain; and other services that include private bus operators, car repair services, rent-a-car service providers, event/conference organisers, spa clinics, and beauty parlours/saloons.

By way of an incentive, banks will be permitted to park their surplus liquidity up to the size of the loan book created under this scheme with the RBI under reverse repo window at a rate that is 25 basis points lower than the repo rate.

 Or, termed in a different way, 40 basis points higher than the reverse repo rate.To further support the funding requirements of micro, small and medium enterprises (MSMEs), particularly smaller MSMEs and other businesses including those in credit deficient and aspirational districts, the RBI has also decided to extend a special liquidity facility of Rs 16,000 crore to SIDBI for on-lending/refinancing through novel models and structures.

This facility will be available at the prevailing policy repo rate for a period of up to one year, which may be further extended depending on its usage. On May 5, the central bank had announced Resolution Framework 2.0 providing for resolution of Covid-19 related stress of MSMEs as well as non-MSME small businesses and loans to individuals for business purposes.

To enable a larger set of borrowers to avail of benefits under Resolution Framework 2.0, the RBI has now expanded coverage of borrowers by enhancing the maximum aggregate exposure threshold from Rs 25 crore to Rs 50 crore for MSMEs, non-MSME small businesses and loans to individuals for business purposes.

“The RBI remains fully committed to creating an enabling environment in which a sound and efficient financial sector flourishes while preserving financial stability,” said Das. He said the sudden rise in Covid-19 infections and fatalities has impaired the nascent recovery that was underway but has not snuffed it out.

“The impulses of growth are still alive. Aggregate supply conditions have shown resilience in the face of the second wave,” said Das.”We will continue to think and act out of the box, planning for the worst and hoping for the best. The need of the hour is not to be overwhelmed by the current situation, but to collectively overcome it,” he said.

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New Delhi: You could avail the opportunity to buy gold at great prices while the 5-day window to invest in the yellow metal ends today.

The Sovereign Gold Bond Scheme 2021-22- Series-III or the third tranche which opened for subscription on May 31, ends today (June 4, 2021).

The issue price for Sovereign Gold Bond Scheme 2021-22 has been fixed at Rs 4,889 per gram of gold, the Reserve Bank of India (RBI) said.

Earlier, the government had announced to issue the Sovereign Gold Bond (SGB) in six tranches from May 2021 to September 2021. The RBI will issue the bonds on behalf of the Government of India.

“The nominal value of the bond based on the simple average closing price for gold of 999 purity of the last three working days of the week preceding the subscription period…Works out to Rs 4,889 per gram of gold,” said the RBI, which issues the bonds on behalf of the central government.

Government of India, in consultation with the Reserve Bank of India, has decided to offer a discount of Rs 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.

“For such investors, the issue price of Gold Bond will be Rs 4,839 per gram of gold,” it said.

The Bonds will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions. The tenor of the Bond will be for a period of 8 years with exit option after 5th year to be exercised on the interest payment dates.

Minimum permissible investment will be 1 gram of gold. The maximum limit of subscribed shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time. A self-declaration to this effect will be obtained. The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the Secondary Market.