New Delhi: Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday said that there is no reason for the central bank to revise its Gross Domestic Product (GDP) projection downwards.

The RBI projected India’s economy to grow by 10.5 per cent for the financial year 2021-22.

Das said this while speaking at the Economic Times Financial Inclusion Summit where he even said that the financial system will have a crucial role to fulfil the aspirations and needs of our economy on the mend. 

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He further pointed out that the RBI has taken a slew of measures to mitigate the impact of COVID, including rate cuts, on-tap liquidity, cash reserve ratio exemptions and various tweaks in the priority sector lending scheme.

Meanwhile, talking about the roadblocks during Covid pandemic, Das said that RBI has encountered challenges for financial inclusion, which include how to identify the customer, reaching the last mile and provide relevant products that are safe.

The RBI chief even emphasised that efforts must continue for greater financial inclusion in pursuance of the goal of a sustainable future for all.

There is a need for an accelerated universal reach of bank accounts along with access to financial products relating to credit, investment, insurance and pension, he added.

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Das further said that financial inclusion will remain a priority of the central bank to achieve sustainable post-pandemic economic recovery.

“In order to make the post-pandemic recovery more inclusive and sustainable, financial inclusion would continue to be our policy priority,” he said.

Concluding his address, Das even pointed out that a sustainable financial inclusion will enable banks, NBFCs, MFIs and others to enhance their customer base and products and diversify their balance sheet.

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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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: 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.

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)

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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Chennai: Tamil Nadu Chief Minister M.K. Stalin on Tuesday urged his counterparts in 12 states to seek that the Central government and the Reserve Bank of India (RBI) provide a loan moratorium to micro, small and medium enterprises (MSME) due to the lockdown this year.

In a letter to Chief Ministers of Andhra Pradesh, Bihar, Chhattisgarh, Delhi, Jharkhand, Kerala, Maharashtra, Odisha, Punjab, Rajasthan, Telangana, and West Bengal, he said there is asymmetry in treatment of borrowers, particularly MSME units and small borrowers during the first and second waves of Covid-19.

“In April/May, 2020 when the Government of India had announced the nationwide lockdown, a moratorium was offered on repayment of loans for such borrowers. However, in April-June, 2021 when lockdowns are being imposed, based on local conditions, by the respective states, similar relief to borrowers is not being provided for,” Stalin said.

Stating that he has taken up the issue with the Central government, Stalin requested the 12 Chief Ministers to write to both the Union Finance Minister and the Governor, Reserve Bank of India to prevail on them to extend the duration of loan repayment for the first two quarters of 2021-2022 to all small borrowers with outstanding up to Rs 5 crore in view of lockdown the Corona epidemic.

The absence of such relief measures would force many businesses to close and would lead to widespread economic distress. These MSMEs and small businesses are the mainstay of our economy and employment generation, Stalin added.

Stalin also said several Chief Ministers had written to the Central government that it would be the appropriate purchaser of Covid-19 vaccine than the states.

“I am happy that all our collective efforts have been instrumental in convincing the Union Government and the Hon’ble Prime Minister has reversed the earlier policy yesterday,” he said.

Several states including Tamil Nadu had floated global tender to purchase Covid-19 vaccines but did not get even a single bid.

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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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.

New Delhi: Reserve Bank of India (RBI) Friday announced that National Automated Clearing House (NACH) will be available on all days of the week, effective August 1, 2021.

What is National Automated Clearing House (NACH)?

NACH is a bulk payment system operated by the NPCI. It facilitates one-to-many credit transfers such as payment of dividend, interest, salary, pension, etc., as also collection of payments pertaining to electricity, gas, telephone, water, periodic instalments towards loans, investments in mutual funds, insurance premium, etc. 

“NACH has emerged as a popular and prominent mode of direct benefit transfer (DBT) to large number of beneficiaries. This has helped transfer of government subsidies during the present COVID-19 in a timely and transparent manner. In order to further enhance customer convenience, and to leverage the 24×7 availability of RTGS, NACH which is currently available on bank working days, is proposed to be made available on all days of the week effective from August 1, 2021,” said RBI.

The Central Bank adde that the relevant instructions/circulars for all these measures will be issued separately.

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New Delhi: The Reserve Bank of India (RBI) on Friday decided to leave benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance as the economy faces heat of the second COVID wave.

This is the sixth time in a row that the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das has maintained status quo. RBI had last revised its policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rate to a historic low.

Here is how Industry leaders reacted on RBI June Monetary Policy

Abheek Barua, Chief Economist, HDFC Bank

In today’s policy announcement, the RBI ticked all the right boxes in terms of its response to the second wave. The announcement of GSAP 2.0 for INR 1.2 lakh crore and the carve out for SDLs bonds in the program is likely to help ease the pressure in the bond market, especially given the higher state borrowing pressure and increase in Centre borrowings this fiscal.

Siddhartha Sanyal, Chief Economist and Head – Research, Bandhan Bank

In today’s policy, the RBI’s bias to continue extending the same was evident from the initiatives such as liquidity support to contact-intensive sectors and MSMEs and small businesses. Further step up in G-SAP and inclusion of SDLs in the same are encouraging and should continue to offer support for the broader spectrum of the yield curve.

Prithviraj Srinivas, Chief Economist, Axis Capital

To tackle likely pressures on domestic interest rates, the RBI highlighted presence of USD 600bn FX reserves as a deterrent ahead of crucial FOMC meeting and gave predictable indications on RBI bond buying program, G-SAP 2.0. In addition, there were other credit facilitation measures for severely impacted high contact services sectors. Overall today’s measures and communication by RBI bolster current accommodative policy stance.

Lakshmi Iyer, CIO (Debt) & Head Products, Kotak Mutual Fund

The RBI MPC was about G & G – Growth forecasts for FY 22 were lowered by 1% while GSAP amt for Q2 FY 22 was increased to INR 1 tn (INR 1 tm in Q1). While CPI inflation forecasts have been increased, immediate demand side pressures may not be a concern due to the pandemic. Inclusion of SDL is GSAP is a good move to help ease some pressure on State loans. Bond yields are likely to move in tight range and oscillate between auction supply and GSAP led demand.

Churchil Bhatt, EVP & Debt Fund Manager, Kotak Mahindra Life Insurance Company

On the bond market front, RBI re-emphasized its guidance on orderly evolution of Yield Curve with the announcement of INR 1.2 Trillion GSAP 2.0. We expect bond markets to take comfort from continued RBI support. In light of the above, 10Y Benchmark Gsec should continue to trade in 5.90%-6.10% range in the near term.

Amar Ambani, Senior President and Head of Research – Institutional Equities, YES SECURITIES

Downward revision in FY22 GDP growth projection to 9.5% was quite expected, but seems little optimistic when compared with consensus estimates. Nevertheless, RBI pursued its broad intent of plugging weak spots in the economy by providing on tap liquidity with additional lending to distressed and contact-sensitive sectors.

George Alexander Muthoot, Managing Director at Muthoot Finance

The commitment by the central bank was supported by additional measures announced today such as a separate liquidity window of Rs. 15,000 crore for certain contact-intensive sectors and enhancing exposure threshold to Rs. 50 crore from Rs. 25 crore for MSMEs, small businesses and individuals for business loan purposes under Resolution Framework 2.0. Such steps will help borrowers to better mitigate the impact of pandemic’s second wave and we stand resolutely with every Indian to support all finance needs for a truly Atmanirbhar Bharat.

Pankaj Sharma, Chief Executive Officer (CEO), Religare Finvest Ltd

RBI’s move to enhance the overall exposure from INR 25 crores to INR 50 crores under Resolution Framework 2.0 is expected to help more MSMEs, non-MSMEs and individuals who have taken loans but have been impacted by the pandemic. This will help bring down systemic risks in the banking system.

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New Delhi: The EMIs on home and auto loans are unlikely to come down in the near term as the Reserve Bank of India on Friday kept the key policy rates unchanged in its bi-monthly Monetary Policy review.

The central bank announcing the outcome of its RBI bi-monthly Monetary Policy rates on June 4 said that it has decided to keep the repo rate unchanged at 4 percent and the reverse repo rate at 3.35 percent. Repo is the rate at which RBI lends funds to commercial banks when needed. It is a tool that the central bank uses to control inflation. The reverse repo rate is the rate at which the RBI borrows from banks.

The MPC kept the key benchmark rate unchanged in its last five reviews. This is the sixth time in a row that MPC has decided to keep the policy rate unchanged. RBI had last revised its policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rates to a historic low.

Meanwhile, the government on Monday released India`s GDP figures, with data showing that India’s economy contracted by less-than-expected 7.3 percent in the fiscal year ended March 2021.

The data furnished by the National Statistical Office (NSO) showed that real GDP or Gross Domestic Product at constant (2011-12) prices in 2020-21 attained a level of Rs 135.13 lakh crore, as against the `first revised estimate` of GDP for the year 2019-20 of Rs 145.69 lakh crore.

“`GDP at Constant (2011-12) Prices in Q4` of 2020-21 is estimated at Rs 38.96 lakh crore, as against Rs 38.33 lakh crore in Q4 of 2019-20, showing a growth of 1.6 per cent,” according to the GDP estimates released by the Central Statistics Office (CSO).Besides, the CSO said: “There was a sharp spike from Rs 2.27 lakh crore in BE 2020-21 to Rs 5.95 lakh crore in the revised Estimates for the major subsidies (especially food subsidies) of Centre, presented in Budget 2021-22, in RE 2020-21.”

New Delhi: The Reserve Bank of India (RBI) is widely expected to keep key interest steady on in its bi-monthly monetary policy on Friday. RBI Governor Saktikanta Das will announce the outcome of the policy at 10 am today.

In its last monetary policy, the central bank maintained status quo in its key interest rates.

The central bank announcing the outcome of its RBI bi-monthly Monetary Policy rates on April 7 said that it has decided to keep the repo rate unchanged at 4 percent and the reverse repo rate at 3.35 percent. Repo is the rate at which RBI lends funds to commercial banks when needed. It is a tool that the central bank uses to control inflation. The reverse repo rate is the rate at which the RBI borrows from banks.

The RBI monetary policy committee also decided to continue with its accomodative stance. An accommodative stance implies a rate cut in the future if the need arises to support the economy.

The MPC kept the key benchmark rate unchanged in its last five reviews. RBI had last revised its policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rates to a historic low.

Meanwhile, the government on Monday released India`s GDP figures, with data showing that India’s economy contracted by less-than-expected 7.3 percent in the fiscal year ended March 2021.

The data furnished by the National Statistical Office (NSO) showed that real GDP or Gross Domestic Product at constant (2011-12) prices in 2020-21 attained a level of Rs 135.13 lakh crore, as against the `first revised estimate` of GDP for the year 2019-20 of Rs 145.69 lakh crore.

“`GDP at Constant (2011-12) Prices in Q4` of 2020-21 is estimated at Rs 38.96 lakh crore, as against Rs 38.33 lakh crore in Q4 of 2019-20, showing a growth of 1.6 per cent,” according to the GDP estimates released by the Central Statistics Office (CSO).Besides, the CSO said: “There was a sharp spike from Rs 2.27 lakh crore in BE 2020-21 to Rs 5.95 lakh crore in the revised Estimates for the major subsidies (especially food subsidies) of Centre, presented in Budget 2021-22, in RE 2020-21.”

Even as the Reserve Bank of India (RBI) has expressed concerns over the usage of cryptocurrency as a medium of exchange, the apex bank on Monday clarified that banks and other regulated entities can no longer cite its old circular on cryptocurrencies for not offering such products to customers. However, it stated that the lenders must adhere to local rules, which are quite exclusionary.

What does the old RBI circular on cryptocurrency say?

In its circular dated April 6, 2018, the central bank had prevented banks from dealing in cryptocurrencies or offering any service to customers on them. But the move was challenged in the Supreme Court, which had set aside the rules on 4 March 2020.

READ: Covid Impact: GDP Contracts By Record 7.3 Percent In FY 2020-21 After 4 Percent Growth Last Fiscal

What’s the current observation?

The RBI circular, called Customer Due Diligence for transactions in Virtual Currencies (VC), has been issued after major Indian banks have given warnings to customers against using their services to trade in cryptocurrencies.

The RBI said, banks continue to cite the 2018 circular by the RBI to justify why they are not offering any services on cryptocurrencies.

“In view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the Supreme Court judgment, and therefore cannot be cited or quoted from,” the RBI said in a clarification on its website.

The apex bank also stressed that banks need to carry out customer due to diligence processes “in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002 in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances.”

What does it mean?

It means that bank can offer services to customers, but it has to undergo several checks and balances, including ensuring the funds are not used for money laundering or financing terrorism. It is because cryptocurrencies are not supported by central banks and are decentralized by nature, making it difficult to trace their end-use.

RBI governor Shaktikanta Das said in March that the central bank had “major concerns” about cryptocurrencies that were communicated to the government.

“Central bank digital currency is one thing. The cryptocurrencies which are traded in the market are something else. Both RBI and government are committed to financial stability. We have flagged certain concerns around these cryptocurrencies which are being traded in the market. We have flagged certain major concerns to the government,” Das had said.

New Delhi: The Sovereign Gold Bond Scheme 2021-22- Series-III or the third tranche will be open for subscription from today (May 31) to June 4, 2021.

The issue price for Sovereign Gold Bond Scheme 2021-22, which is open for subscription for five days, 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.

What is Sovereign Gold Bond Scheme?

Sovereign Gold Bond Scheme are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.

How will the Sovereign Gold Bond Scheme be sold?

The bonds will be sold through scheduled commercial banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

Who can buy Sovereign Gold Bond Scheme?

The Bonds will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.

New Delhi: The Reserve Bank of India (RBI) has said that people will not be able to do NEFT transactions from 00:01 hrs to 14:00 hours on Sunday, May 23, 2021, due to NEFT system upgrade.

“A technical upgrade of NEFT, targeted to enhance the performance and resilience, is scheduled after the close of business of May 22, 2021. Accordingly, NEFT service will not be available from 00:01 hrs to 14:00 hrs on Sunday, May 23, 2021. The RTGS system will continue to be operational as usual during this period. Similar technical upgrade for RTGS was completed on April 18, 2021,” an RBI statement said.

Member banks may inform their customers to plan their payment operations accordingly. NEFT Members will continue to receive event update(s) through NEFT system broadcasts, RBI added.

This mean that although NEFT system would not be available for bank customers during the above mentioned time, RTGS system will continue to be operational as usual during this period.

It may be recalled that a similar technical upgrade for RTGS was completed on April 18, 2021.

What is NEFT?

NEFT is a nation-wide payment system facilitating one-to-one funds transfer. Under this Scheme, individuals, firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country participating in the Scheme.

What is RTGS?

RTGS is a financial transaction system, where there is continuous and real-time settlement of fund transfers, individually on a transaction-by-transaction basis. RTGS transactions or transfers have no amount cap.

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RBI

In February 2021 too, the apex bank was the net seller of the US currency after it had bought USD 23.352 billion and sold USD 24.571 billion in the spot market. In FY2019-20, the central bank had net purchased USD 45.097 billion. It had bought USD 72.205 billion and sold USD 27.108 billion in the spot market.

New Delhi: The Reserve Bank of India (RBI) on Monday said that due to NEFT system upgrade, this service will not be available from 00:01 hrs to 14:00 hours on Sunday, May 23, 2021.

“A technical upgrade of NEFT, targeted to enhance the performance and resilience, is scheduled after the close of business of May 22, 2021. Accordingly, NEFT service will not be available from 00:01 hrs to 14:00 hrs on Sunday, May 23, 2021. The RTGS system will continue to be operational as usual during this period. Similar technical upgrade for RTGS was completed on April 18, 2021,” an RBI statement said.

Member banks may inform their customers to plan their payment operations accordingly. NEFT Members will continue to receive event update(s) through NEFT system broadcasts, RBI added.

This mean that although NEFT system would not be available for bank customers during the above mentioned time, RTGS system will continue to be operational as usual during this period.

It may be recalled that a similar technical upgrade for RTGS was completed on April 18, 2021.

What is NEFT?

NEFT is a nation-wide payment system facilitating one-to-one funds transfer. Under this Scheme, individuals, firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country participating in the Scheme.

What is RTGS?

RTGS is a financial transaction system, where there is continuous and real-time settlement of fund transfers, individually on a transaction-by-transaction basis. RTGS transactions or transfers have no amount cap.

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New Delhi: The Sovereign Gold Bond Scheme 2021-22 series I opens for subscription on Monday (May 17, 2021), and will close on May 21, 2021 and bonds will be issued on May 25.

The issue price for Sovereign Gold Bond Scheme 2021-22 has been fixed at Rs 4,777 per gram, the Reserve Bank of India said.

The government has decided to issue the bonds 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 business days of the week preceding the subscription period…Works out to Rs 4,777 per gram of gold,” the RBI said.

The government, in consultation with the RBI, 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 4,727 per gram of gold,” the RBI said.

Here’s all you need to know about your eligibility, how to apply for the Sovereign Gold Bond Scheme.

What is Sovereign Gold Bond Scheme?

Sovereign Gold Bond Scheme are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.

How will the Sovereign Gold Bond Scheme be sold?

The bonds will be sold through scheduled commercial banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

Who can buy Sovereign Gold Bond Scheme?

The Bonds will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.

What will be the tenor of the Sovereign Gold Bond Scheme?

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.

What is the investment limit of the Sovereign Gold Bond Scheme?

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.

New Delhi: The Reserve Bank of India (RBI) has invited online applications for the post of Pharmacist. Candidates can apply for the vacancy till June 3. 

Interested candidates can visit the official website opportunities.rbi.org.in to apply for the post of Pharmacist. The recruitment will be on a contract basis for RBI’s office in Guwahati, Assam.  

Eligibility criteria:

Candidates with Diploma in Pharmacy from a recognized Board or University and registered under Pharmacy Act, 1948 can apply for the vacancy. 

Along with the photocopies of the required documents, the aspirants will have to send their applications in the enclosed format to Regional Director, Reserve Bank of India, Human Resource Management Department, Recruitment Section, Station Road, Panbazar, Guwahati 781001. 

Applicants will then be short-listed for an interview.

Click here to read the notification.

Pay Scale

A fixed remuneration at the rate of Rs 400 per hour with a maximum period of five hours per day, not exceeding a maximum of Rs 2000 per day will be paid. 

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The Reserve Bank of India(RBI) has amended its master direction to know your customer to further leverage the video-based customer identification process (V-CIP) and simplify the process of periodic updation of KYC.

V-CIP is an alternate method of customer identification with facial recognition and customer due diligence by an authorised official of the regulated entity by undertaking seamless, secure, live, informed-consent based audio-visual interaction with the customer to obtain identification information.

The RBI said regulated entities may undertake V-CIP to carry out Customer Due Diligence (CDD) in case of new customer on-boarding for individual customers, proprietor in case of proprietorship firm, authorised signatories and Beneficial Owners (BOs) in case of Legal Entity (LE) customers.

Among others, RBI regulated entities (REs), include banks, NBFCs, and payment system operators.

REs may also undertake V-CIP for conversion of existing accounts opened in non-face to face mode using Aadhaar OTP based e-KYC authentication, and update or periodic updation of KYC for eligible customers.

The central bank has also specified certain minimum standards which regulated entities will have to follow while opting to undertake V-CIP.

As per the amended provisions, an RE should have complied with the RBI guidelines on minimum baseline cyber security and resilience framework for banks.

“The technology infrastructure should be housed in its own premises of the RE and the V-CIP connection and interaction shall necessarily originate from its own secured network domain. Any technology related outsourcing for the process should be compliant with relevant RBI guidelines,” it said.

Here’s what can be done under V-CIP: 

• The Central Bank has said that regulated entities may undertake V-CIP to carry out Customer Due Diligence (CDD) in case of new customer on-boarding for individual customers, proprietor in case of proprietorship firm, authorised signatories and Beneficial Owners (BOs) in case of Legal Entity (LE) customers. 
• The regulated entities or REs may also undertake V-CIP for conversion of existing accounts opened in non-face to face mode using Aadhaar OTP based e-KYC authentication, and updation or periodic updation of KYC for eligible customers. 
• The banking watchdog has also specified certain minimum standards which regulated entities will have to follow while undertaking KYV under the V-CIP process. 
• The RBI regulated entities (REs) include banks, NBFCs and payment system operators among others. 

Also, the RE should ensure end-to-end encryption of data between customer devices and the hosting point of the V-CIP application, as per appropriate encryption standards. The customer consent has to be recorded in an auditable and alteration-proof manner.

It further said each RE should formulate a clear workflow and standard operating procedure for V-CIP and ensure adherence to it. The V-CIP process should be operated only by officials of the RE specially trained for this purpose.

The authorised official should record audio-video as well as capture photographs of the customer present for identification. The official can obtain the identification information using OTP based Aadhaar e-KYC authentication, offline verification of Aadhaar for identification, KYC records downloaded from CKYCR or equivalent e-document of Officially Valid Documents (OVDs) including documents issued through DigiLocker.

Further, the RE will have to ensure to redact or blackout the Aadhaar number.

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Mumbai: The Reserve Bank on Monday amended its master direction on know your customer to further leverage the video-based customer identification process (V-CIP) and simplify the process of periodic updation of KYC.

V-CIP is an alternate method of customer identification with facial recognition and customer due diligence by an authorised official of the regulated entity by undertaking seamless, secure, live, informed-consent based audio-visual interaction with the customer to obtain identification information.

The RBI said regulated entities may undertake V-CIP to carry out Customer Due Diligence (CDD) in case of new customer on-boarding for individual customers, proprietor in case of proprietorship firm, authorised signatories and Beneficial Owners (BOs) in case of Legal Entity (LE) customers.

Among others, RBI regulated entities (REs), include banks, NBFCs, and payment system operators.

REs may also undertake V-CIP for conversion of existing accounts opened in non-face to face mode using Aadhaar OTP based e-KYC authentication, and updation or periodic updation of KYC for eligible customers.

The central bank has also specified certain minimum standards which regulated entities will have to follow while opting to undertake V-CIP.

As per the amended provisions, an RE should have complied with the RBI guidelines on minimum baseline cyber security and resilience framework for banks.

“The technology infrastructure should be housed in own premises of the RE and the V-CIP connection and interaction shall necessarily originate from its own secured network domain. Any technology related outsourcing for the process should be compliant with relevant RBI guidelines,” it said.

Also, the RE should ensure end-to-end encryption of data between customer device and the hosting point of the V-CIP application, as per appropriate encryption standards. The customer consent has to be recorded in an auditable and alteration proof manner.

It further said each RE should formulate a clear work flow and standard operating procedure for V-CIP and ensure adherence to it. The V-CIP process should be operated only by officials of the RE specially trained for this purpose.

The authorised official should record audio-video as well as capture photograph of the customer present for identification. The official can obtain the identification information using OTP based Aadhaar e-KYC authentication, offline verification of Aadhaar for identification, KYC records downloaded from CKYCR or equivalent e-document of Officially Valid Documents (OVDs) including documents issued through DigiLocker.

Further, the RE will have ensure to redact or blackout the Aadhaar number. 

RBI

As per RBI`s directions, the co-operative bank shall not, without prior approval of RBI in writing a grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in the discharge of its liabilities and obligations or otherwise.