The Employees’ Provident Fund Organisation (EPFO) has introduced reforms to make it easier for subscribers to access their retirement funds early. The changes allow individuals to withdraw up to 75% of their provident fund (PF) for essential needs, such as illness, education, and marriage, as well as for housing and special circumstances. Additionally, members can now tap their PFs more frequently, with up to 10 withdrawals for education and five withdrawals for marriage-related expenses. The EPFO has also reduced the waiting period for partial PF withdrawals to 12 months of membership.

These reforms aim to provide liquidity to the retirement scheme, acknowledging that individuals may need access to their funds for unforeseen financial needs. The EPFO has clarified that in cases of unemployment, the 25% of the fund held back can be withdrawn after a year of being without pay. This move demonstrates the trust the EPFO has in the judgment of its account holders, allowing them to make decisions about their own money.

The EPFO’s PF scheme offers a higher interest rate than fixed deposits and government bonds, and the returns are tax-free up to a certain limit. However, the fund’s safety and stability depend on sound management, and the EPFO must ensure that its earnings cover its payouts. The Reserve Bank of India (RBI) has flagged concerns about the gap between the EPFO’s high payouts and low debt earnings, which are being funded by sales of capital assets such as equities.

To address this issue, the RBI has suggested an actuarial assessment of liabilities and the use of sophisticated expertise for asset management. The EPFO’s allocation cap on equity may need to be increased to maintain payouts above 8%, but this must be balanced with a focus on safety and transparency. As the EPFO’s reforms aim to provide more flexibility to subscribers, it is essential to ensure that the fund’s management is calibrated to prioritize safety and stability.

The EPFO’s reforms recognize that the primary purpose of the PF scheme is to save for old-age expenses, but also acknowledges that individuals may need access to their funds for other essential needs. By providing more flexibility and liquidity, the EPFO is demonstrating trust in its account holders and allowing them to make informed decisions about their own money. However, it is crucial to ensure that the fund’s management is sound and stable to maintain the trust of its subscribers. With the right management and governance, the EPFO’s reforms can provide a valuable benefit to its subscribers while ensuring the long-term sustainability of the fund.

Former Reserve Bank of India (RBI) governor Shaktikanta Das has predicted that India will become the world’s third-largest economy by 2028. Das made this statement while delivering a lecture on “Indian Economy in a Changing Global Order” at the 31st Annual Convocation of the Gokhale Institute of Politics and Economics (GIPE). He attributed this growth to India’s structural reforms, fiscal discipline, and robust macroeconomic fundamentals.

Das noted that India’s resilience and policy reforms over the past decade have positioned it as a key global growth driver. He highlighted the country’s expanding manufacturing base, driven by initiatives such as Atmanirbhar Bharat and the Production-Linked Incentive (PLI) scheme. Emerging sectors like semiconductors, renewable energy, biotechnology, and green hydrogen are also expected to drive growth. Traditional industries like electronics, auto components, and pharmaceuticals are projected to grow steadily as well.

The services sector, which employs nearly 30% of India’s workforce, remains a key driver of growth and exports. Das credited India’s knowledge-led advantage and large pool of STEM graduates for strengthening the country’s position in technology and digital innovation. He also noted that major infrastructure achievements, such as the expansion of national highways, ports, and inland cargo traffic, have contributed to the country’s growth.

Das praised the Flexible Inflation Targeting (FIT) framework, adopted in 2016, for anchoring inflation expectations, strengthening monetary credibility, and enhancing macroeconomic stability. He also lauded India’s corporate sector for its resilience and balance sheet improvement, supported by reforms such as the Insolvency and Bankruptcy Code (IBC) and RERA.

Das concluded that India is well-positioned to achieve its aspiration of Viksit Bharat by 2047, driven by reform, innovation, and fiscal prudence. He was conferred the Doctor Honoris Causa (Honorary Doctorate) by the GIPE for his contributions to public service and economic policy. The convocation ceremony, which included degree and award distribution, was presided over by GIPE chancellor Sanjeev Sanyal and vice-chancellor Prof Umakant Das. Overall, Das’s prediction suggests that India is on track to become a major economic power in the near future.

Union Finance Minister Nirmala Sitharaman has launched a campaign to help citizens reclaim their unclaimed financial assets, which amount to a staggering Rs 1.84 lakh crore. The ‘Apki Poonji, Apka Adhikar’ (Your Money, Your Right) campaign aims to create awareness, improve accessibility, and facilitate action to help people regain access to their savings. The unclaimed assets include dormant deposits, insurance proceeds, dividends, mutual fund balances, and pensions, which are currently lying with Indian banks, the Reserve Bank of India (RBI), and the Investor Education and Protection Fund (IEPF).

Sitharaman emphasized that these assets are not just numbers on paper, but represent the hard-earned savings of ordinary families that can support education, healthcare, and financial security. She reassured the public that the assets are safe and that the government is committed to helping citizens reclaim them. The campaign is guided by the “3 A’s” – Awareness, Accessibility, and Action – which will help bridge the gap between citizens and financial institutions, promoting community awareness and ensuring that every individual can reclaim their rightful savings with dignity and ease.

To facilitate the claims, the government has introduced digital tools, including the RBI’s UDGAM portal, which allows citizens to access information and claim their unclaimed deposits. Sitharaman urged citizens not to ignore even small entitlements and to come forward to claim their assets. She also acknowledged the support of Prime Minister Narendra Modi and commended the efforts of Gujarat Gramin Bank, which has committed to visiting every village in the state to locate and inform rightful owners of unclaimed deposits.

The campaign is part of the government’s drive towards financial inclusion and asset recovery, and it is expected to benefit thousands of citizens who have unclaimed assets lying with financial institutions. Sitharaman emphasized the importance of spreading awareness about the campaign and encouraging citizens to come forward to claim their assets. With the help of this campaign, the government hopes to ensure that every rupee saved by Indian citizens returns to them or their families, and that no one is left behind in accessing their rightful savings.

The Reserve Bank of India (RBI) has released the results of its 46th Services and Infrastructure Outlook Survey (SIOS) for the second quarter of the financial year 2025-26. The survey aims to gauge the mood and outlook of companies operating in the services and infrastructure sectors, which are vital to India’s economy. Despite ongoing cost pressures, companies in both sectors remain cautiously optimistic about the business environment, anticipating steady demand growth in the near term.

The survey covers key sectors such as IT, hospitality, retail, and transport in the services sector, and construction, power, telecom, and other critical facilities in the infrastructure sector. While rising input costs and inflationary challenges are putting pressure on profit margins, firms are confident that they can manage these challenges without hindering overall growth prospects.

The survey reveals that a majority of firms expect moderate to strong demand in the coming months, which is expected to support increased output and potential hiring. Both sectors have shown positive signs of investment activity plans, indicating confidence in long-term growth and expansion despite short-term challenges.

The optimistic outlook of services and infrastructure firms is a positive indicator for the broader economic recovery and stability in India, given that these sectors are key drivers of the country’s GDP and employment. While cost pressures remain a concern, the resilience and positive expectations among firms in these sectors highlight a promising path forward.

The survey’s findings suggest that India’s economy is poised for growth, driven by the services and infrastructure sectors. The RBI’s survey provides valuable insights into the mood and outlook of companies operating in these sectors, which can inform policy decisions and investment strategies. Overall, the survey’s results are a positive sign for India’s economic prospects, and businesses and investors can take note of the opportunities and challenges that lie ahead.

The concept of a global Rupee refers to the increasing internationalization of the Indian currency, allowing it to be used as a medium of exchange, unit of account, and store of value across the globe. This idea is closely tied to the India Narrative, which encompasses the country’s economic growth, geopolitical influence, and cultural prominence on the world stage.

India’s economy has been growing rapidly, with the country expected to become the third-largest economy by 2030. This growth, coupled with the government’s efforts to promote the Rupee as a global currency, has led to increased interest in the internationalization of the Rupee. The Reserve Bank of India (RBI) has taken steps to facilitate the use of the Rupee in international transactions, such as allowing foreign central banks to hold Rupee reserves and permitting Indian banks to open foreign currency accounts.

The internationalization of the Rupee has several benefits, including reduced dependence on the US dollar, increased trade and investment, and enhanced economic stability. It also reflects India’s growing geopolitical influence, as the country seeks to play a more significant role in global affairs. The use of the Rupee as a global currency can also promote Indian culture and values, as it becomes more integrated into the global economy.

However, there are also challenges to the internationalization of the Rupee, such as the need for a more developed financial system, improved regulatory frameworks, and increased liquidity in the foreign exchange market. Additionally, the Rupee’s volatility and inflation concerns may deter foreign investors and hinder its adoption as a global currency.

Despite these challenges, the Indian government and the RBI are working to promote the Rupee as a global currency. They are exploring new avenues, such as the use of digital currencies and blockchain technology, to increase the Rupee’s appeal and usability. The government is also engaging with foreign governments and institutions to promote the use of the Rupee in international transactions.

In conclusion, the road to a global Rupee is a complex and challenging journey, but one that has the potential to enhance India’s economic and geopolitical influence. As the Indian economy continues to grow and the government promotes the Rupee as a global currency, it is likely that the Rupee will play a more significant role in international transactions in the coming years. The India Narrative, which encompasses the country’s economic, cultural, and geopolitical aspirations, is closely tied to the internationalization of the Rupee, and its success will depend on the government’s ability to address the challenges and opportunities that lie ahead.

Banks in various Indian cities are closed on September 29, 2025, to observe Maha Saptami, a significant day in the Durga Puja festival. This marks the beginning of a seven-day period where banks will be shut in different parts of the country due to religious festivals and national holidays. The Reserve Bank of India (RBI) has released a schedule outlining the bank holidays from September 29 to October 5.

On September 29, banks in Kolkata, Agartala, and Guwahati are closed for Maha Saptami. The next day, September 30, banks in several cities, including Agartala, Bhubaneswar, Guwahati, Imphal, Jaipur, Kolkata, Patna, and Ranchi, will be closed for Maha Ashtami or Durga Ashtami. On October 1, 16 cities, including major metros like Bengaluru, Chennai, and Kolkata, will observe a bank holiday for Navratri End, Maha Navami, Dussehra, Vijayadasami, or Durga Puja.

October 2 is a pan-India holiday, with all banks closed to commemorate Mahatma Gandhi Jayanti, Dasara, Vijaya Dashami, or Dussehra. The following days, October 3 and 4, will see banks closed in Gangtok for Durga Puja. Finally, on October 5, banks will be closed nationwide for the weekly Sunday off.

Despite these closures, the RBI has assured that online banking, mobile banking, ATMs, and UPI services will continue to operate during the holiday period. Additionally, banks will also be closed on the second and fourth Saturdays of each month. The month of October will see further closures due to festivals like Diwali and Chhath Puja. It is essential for customers to plan their banking activities accordingly and take advantage of the available digital services during the holiday period.

The Reserve Bank of India (RBI) has established a regulatory review cell to streamline and simplify regulatory instructions. This move is aimed at making it easier for banks and other financial institutions to comply with regulations. The cell will review and refine existing regulations, removing redundant or obsolete ones, and make them more effective.

The RBI has been working to improve the regulatory framework for the banking sector, and the establishment of the regulatory review cell is a significant step in this direction. The cell will be responsible for reviewing existing regulations, identifying areas where simplification is possible, and making recommendations for changes.

The regulatory review cell will also be responsible for ensuring that regulatory instructions are consistent with the RBI’s policies and guidelines. This will help to reduce confusion and uncertainty among banks and other financial institutions, making it easier for them to comply with regulations.

The establishment of the regulatory review cell is part of the RBI’s efforts to improve the ease of doing business in the banking sector. The RBI has been taking several steps to simplify regulations and reduce compliance burden on banks, including the introduction of a simplified regulatory framework for small banks and non-banking financial companies.

The regulatory review cell will also help to promote transparency and accountability in the banking sector. By streamlining regulatory instructions and making them more effective, the cell will help to reduce the risk of regulatory arbitrage and promote a level playing field among banks and other financial institutions.

The RBI’s decision to establish a regulatory review cell has been welcomed by the banking industry, which sees it as a positive step towards simplifying regulations and improving the ease of doing business. The cell is expected to play a crucial role in promoting the growth and stability of the banking sector, and its establishment is a significant milestone in the RBI’s efforts to improve the regulatory framework for the sector.

Overall, the establishment of the regulatory review cell is a significant development in the Indian banking sector, and it is expected to have a positive impact on the sector’s growth and stability. By streamlining regulatory instructions and promoting transparency and accountability, the cell will help to improve the ease of doing business in the sector and promote a level playing field among banks and other financial institutions.

The Reserve Bank of India (RBI) has introduced new rules, known as the Digital Lending Directions, 2025, to regulate the growing digital lending industry in India. These rules aim to protect borrowers from issues such as hidden fees, high interest rates, data misuse, and fake loan apps. The rules apply to all banks, non-banking financial companies, co-operative banks, housing finance companies, and lending service providers that operate in the digital lending space.

Key aspects of the new rules include the requirement for lenders to sign official contracts with digital partners, ensuring that loan money is disbursed directly to the borrower’s bank account, and that all charges are declared upfront. Lenders must also obtain explicit consent from borrowers before increasing their loan amount or credit limit. Additionally, the rules emphasize the importance of protecting borrowers’ personal data, allowing them to opt-out of data sharing and delete their data later.

The rules also introduce a complaint redressal system, requiring all digital lenders to have a Grievance Officer and providing borrowers with multiple channels to raise complaints. The RBI has also launched a new reporting tool, the Centralised Information Management System (CIMS), to track and prevent fake loan apps.

Borrowers are advised to ensure that the lender they choose is registered with the RBI, provides a loan agreement before disbursing the loan, and does not ask for unnecessary personal data. They should also be aware of all charges and interest rates associated with the loan and have access to the Grievance Officer’s contact information.

The new rules aim to bring transparency, accountability, and fairness to the digital lending industry, protecting borrowers from fraud and misuse. By following these rules, lenders and digital apps can help build trust in India’s growing digital loan space. Overall, the Digital Lending Directions, 2025, mark a significant step towards regulating the digital lending industry and promoting a safer and more secure borrowing experience for Indians.

RBI Governor Sanjay Malhotra has urged the Clearing Corporation of India (CCIL) to expand its services beyond dollar-rupee trades. In a speech at CCIL’s silver jubilee event, Malhotra emphasized the need for CCIL to create settlement infrastructure for other currency pairs, which would help deepen markets and internationalize the rupee. He noted that this is in line with the broader objective of internationalizing the Indian rupee (INR).

Malhotra commended CCIL’s entry into Gift City and expressed his hope that the services and products offered there would continuously improve and expand. He outlined several expectations for the institution, including scaling up its forex platform, which currently handles $95 million in daily trades. To achieve this, he suggested that CCIL should review and optimize its risk processes, and provide better access through banks and mobile solutions.

The governor also emphasized the need for CCIL to keep up with global trends and embrace new technologies such as algorithmic and AI/ML-driven trading, tokenization of assets, peer-to-peer platforms, and mobile apps. He stressed that CCIL should provide a world-class experience, world-class facilities, and world-class risk management to maintain the trust it has built.

Furthermore, Malhotra called for wider participation in CCIL’s platforms, including corporates and non-resident investors, which would enhance market liquidity and add to overall efficiencies. He also sought stronger trade repository systems with automation, anomaly detection, and compliance checks.

CCIL, which is jointly owned by banks, financial institutions, and the RBI, plays a crucial role in supporting the rupee’s global push by acting as the central counterparty for clearing and settlement in government securities, money, forex, and derivatives markets. By expanding its services and embracing new technologies, CCIL can help deepen markets and increase the rupee’s international presence. Overall, Malhotra’s speech highlighted the importance of CCIL’s role in India’s financial system and the need for the institution to innovate and expand its services to support the country’s economic growth.

The Central Bureau of Investigation (CBI) has filed chargesheets against several high-profile individuals, including Anil Ambani, the chairman of the Reliance Group, and Rana Kapoor, the former CEO of Yes Bank, in connection with an alleged loan fraud case. The case involves a corruption scandal worth ₹2,796 crore (approximately $390 million). The CBI has accused Ambani and Kapoor of conspiring to cheat and defraud Yes Bank, which is one of India’s largest private sector banks.

According to the CBI, Ambani’s companies, including Reliance Infrastructure and Reliance Power, took large loans from Yes Bank, which were not repaid. The agency alleges that Kapoor, who was the CEO of Yes Bank at the time, colluded with Ambani to extend the loans without proper due diligence, and also allegedly took bribes from Ambani’s companies. The CBI has also charged several other Yes Bank officials, including former CFOs and senior executives, in connection with the case.

The alleged scam is part of a larger investigation into Yes Bank’s financial dealings, which were revealed after the bank’s financial health began to deteriorate in 2020. The Reserve Bank of India (RBI) had taken control of Yes Bank in March 2020, citing “serious governance issues” and “financial irregularities”. The CBI has been investigating the case since then, and has filed chargesheets in two separate cases involving Ambani’s companies and Yes Bank officials.

The chargesheets filed by the CBI allege that Ambani’s companies took loans worth ₹6,000 crore (approximately $830 million) from Yes Bank between 2015 and 2017, which were not repaid. The agency alleges that Kapoor and other Yes Bank officials conspired with Ambani to extend the loans, and also allegedly took bribes from Ambani’s companies. The CBI has charged Ambani, Kapoor, and several other individuals with offenses including cheating, conspiracy, and corruption. The case is likely to have significant implications for India’s corporate sector, and is being closely watched by investors and regulators.

According to Jamal Mecklai, the initial excitement about the potential benefits of Trump’s tariffs for the Indian economy has worn off. The government has taken measures such as cutting goods and services tax (GST) and providing support to exporters, but Mecklai argues that more needs to be done to address the underlying structural issues in the economy. These include land reform, improving agricultural productivity, creating meaningful employment opportunities, and increasing investment in education, health, and research and development.

Mecklai believes that the current macroeconomic position, with a contained deficit and stable growth, presents an opportunity to increase investment in these areas, even if it means a slightly higher deficit. However, the Chief Economic Advisor has expressed concerns about the potential risks to the government’s borrowing program.

Mecklai also suggests that exchange rate policy can be used as a tool to support the economy. The rupee has been the worst-performing currency among 25 tracked currencies since January, despite the dollar index falling by 8.8%. Mecklai argues that a stronger rupee would have helped control inflation and interest rates, but the Reserve Bank of India (RBI) has been focused on supporting exporters by keeping the rupee weak.

However, Mecklai notes that this approach has not been effective, with goods exports growing by only 0.2% year-on-year over the past 12 months, despite a nearly 9% weaker rupee against the euro. He suggests that the RBI should develop a more nuanced approach to exchange rate policy, taking into account global growth forecasts and domestic competitiveness. This could involve allowing the rupee to strengthen when global growth is weak and uncertain, rather than pushing it lower.

Overall, Mecklai argues that the Indian economy needs a more aggressive and comprehensive approach to addressing its structural issues, rather than relying on short-term measures to support exporters. By investing in key areas and adopting a smarter exchange rate policy, India can build a stronger and more competitive economy. Mecklai’s views are personal and do not reflect the official position of FinancialExpress.com.

The Reserve Bank of India (RBI) has imposed a penalty of ₹21 lakh on PhonePe Limited for non-compliance with its regulatory directions on Prepaid Payment Instruments (PPIs). The penalty was announced on September 12, 2025, and is a result of an inspection conducted by the RBI from October 2023 to December 2024. The inspection revealed that PhonePe had failed to maintain sufficient funds in its escrow account to cover all outstanding balances and merchant dues, and had also failed to report these shortfalls immediately to the RBI.

PPIs are digital wallets or cards that store monetary value and are used to purchase goods and services. The RBI requires PPI issuers to maintain an escrow account with sufficient funds to cover all outstanding balances and merchant dues. Any shortfall or delay in reporting such discrepancies is treated as a serious compliance violation. In PhonePe’s case, the inspection found that on certain days, the end-of-day balance in its escrow account was less than the value of outstanding PPIs and payments due to merchants, which is a clear violation of the RBI’s PPI guidelines.

The RBI has emphasized that the penalty is based solely on deficiencies in regulatory compliance and does not impact the validity of any transactions or agreements between PhonePe and its customers. The penalty was imposed under the provisions of Section 30(1) read with Section 26(6) of the Payment and Settlement Systems Act, 2007. The RBI has also stated that this action does not prevent it from taking further steps in the future.

The penalty imposed on PhonePe is a significant one, and it highlights the importance of regulatory compliance in the payment services industry. The RBI has made it clear that it will take strict action against any company that fails to comply with its regulatory directions, and this penalty is a testament to that. PhonePe will need to take steps to ensure that it is in compliance with the RBI’s PPI guidelines going forward, and it will be interesting to see how the company responds to this penalty.

Overall, the penalty imposed on PhonePe is a significant development in the payment services industry, and it highlights the importance of regulatory compliance. The RBI’s actions demonstrate its commitment to ensuring that companies operating in the industry are in compliance with its regulatory directions, and it will be interesting to see how the industry responds to this penalty.

A former director of Sapphire Land Development Pvt. Ltd. (SLDPL), Lakhminder Dayal Singh, has filed a petition with the National Company Law Tribunal (NCLT) in Mumbai, accusing Suraksha Asset Reconstruction Company (ARC) of fraud and regulatory violations in the company’s insolvency proceedings. Singh claims that Suraksha ARC and Yes Bank colluded in the transfer of SLDPL’s loan, using “round-tripping” transactions to indirectly fund Suraksha’s acquisition of the loan. This practice, known as loan evergreening, is prohibited by Reserve Bank of India (RBI) rules.

Singh alleges that Yes Bank’s internal audit flagged the issue, and it was also referenced in a Central Bureau of Investigation (CBI) chargesheet. He disputes Yes Bank’s decision to classify SLDPL’s account as stressed, claiming that repayments were on track and that the move was intended to create default conditions that would allow Suraksha ARC to initiate insolvency proceedings.

The petition also questions the conduct of Resolution Professional (RP) Snehal Kamdar, alleging that Singh was denied access to company records and excluded from Committee of Creditors (CoC) meetings despite his rights as a suspended director under the Insolvency and Bankruptcy Code (IBC). Kamdar has declined to comment on the matter, citing that it is sub judice.

Singh has requested the tribunal to overturn the admission of the insolvency petition, remove Suraksha ARC’s status as a financial creditor, dissolve the CoC, and restore control of SLDPL to its board. He has also sought a stay on the ongoing Corporate Insolvency Resolution Process (CIRP). The outcome of the case, which is expected to be heard in the coming weeks, may have significant implications for how banks and ARCs structure loan transfers in future insolvencies.

The allegations made by Singh have brought Suraksha ARC under scrutiny, and the case has the potential to impact the broader insolvency landscape in India. The use of “round-tripping” transactions and loan evergreening practices raises concerns about the transparency and integrity of the insolvency process. The NCLT’s decision in this case will be closely watched, as it may set a precedent for future cases involving similar allegations of fraud and regulatory violations.

The Indian rupee experienced a decline of 4 paise against the US dollar on Monday, trading at 88.30. This depreciation is attributed to concerns over trade tariffs, foreign outflows, and expectations of a US rate cut. Despite this, the Reserve Bank of India’s (RBI) intervention helped to cap losses. The rupee’s value has been under pressure due to worries over US trade tariffs and persistent foreign portfolio outflows.

According to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, the RBI’s intervention has been crucial in controlling volatility and preventing a quick depreciation. The RBI is believed to have sold around $5-6 billion to support the rupee. Bhansali noted that market attention is now focused on the Federal Reserve’s (Fed) decision on September 17, with expectations of a rate cut creating uncertainty around the dollar’s future strength.

The dollar index rose 0.07% to 97.61, while Brent crude was trading 0.58% higher at $67.38 per barrel. On the domestic equity market front, the Sensex was up 93.81 points to 81,998.51, and the Nifty rose 24.45 points to 25,138.45. Foreign Institutional Investors purchased equities worth Rs 129.58 crore on Friday.

The country’s forex reserves jumped $4.038 billion to $698.268 billion during the week ended September 5, driven by a significant increase in the value of gold reserves. US Commerce Secretary Howard Lutnick warned that India must bring down its tariffs or face a “tough time” doing business with the US. Lutnick stated that the relationship between the US and India is one-sided, with India selling to the US and taking advantage of the open US economy.

The RBI’s efforts to maintain market confidence and control volatility have been successful so far, but the ongoing trade tensions and expectations of a US rate cut continue to weigh on the rupee’s value. The upcoming Fed decision will likely have a significant impact on the currency market, and investors are eagerly awaiting the outcome. Overall, the Indian rupee’s depreciation is a result of a combination of factors, including trade tariffs, foreign outflows, and US rate cut expectations, but the RBI’s intervention has helped to mitigate the losses.

According to recent data from the Reserve Bank of India (RBI), more than half of India’s outward foreign direct investment (FDI) is being routed through low-tax hubs. This phenomenon has raised concerns about tax evasion and round-tripping of funds. The data shows that in the financial year 2020-21, Indian companies invested a total of $12.3 billion abroad, out of which $6.8 billion was routed through tax havens such as Singapore, Mauritius, and the Netherlands.

The practice of routing investments through low-tax jurisdictions is not new, but it has gained significant attention in recent years due to its potential for tax avoidance. By investing in foreign companies through subsidiaries in tax havens, Indian firms can take advantage of lower tax rates and minimize their tax liabilities in India. This can lead to a loss of revenue for the Indian government and undermine the country’s efforts to boost its economy.

The RBI’s data reveals that Singapore is the most popular destination for Indian outward FDI, accounting for 37% of the total investments. Mauritius and the Netherlands are also among the top destinations, with 14% and 12% of the investments, respectively. These countries have tax treaties with India, which allow for reduced tax rates on investments made through these jurisdictions.

The practice of routing investments through tax havens has been criticized for facilitating tax evasion and round-tripping of funds. Round-tripping refers to the practice of investing funds abroad through a subsidiary company and then bringing them back to India as FDI, thereby avoiding taxes and taking advantage of investment incentives. This can distort the true picture of India’s FDI inflows and outflows, making it difficult for policymakers to assess the country’s economic performance.

The Indian government has taken steps to curb tax evasion and round-tripping of funds. The government has introduced measures such as the General Anti-Avoidance Rule (GAAR) and the Place of Effective Management (POEM) rule to prevent companies from misusing tax treaties and routing investments through tax havens. However, the RBI’s data suggests that these measures may not be fully effective, and more needs to be done to address the issue.

In conclusion, the RBI’s data highlights the significant portion of India’s outward FDI that is being routed through low-tax hubs. This practice raises concerns about tax evasion and round-tripping of funds, and the Indian government needs to take further steps to address this issue and prevent the loss of revenue. The government should consider strengthening its tax laws and enforcement mechanisms to prevent the misuse of tax treaties and ensure that Indian companies comply with tax regulations.

According to a recent report by Crisil, a ratings agency, the outlook for India’s retail inflation has improved significantly. The agency has revised its projection for headline Consumer Price Index (CPI) inflation for fiscal 2026, lowering it to 3.2% from its earlier estimate of 3.5%. This represents a substantial decline of almost 140 basis points from the previous year.

Crisil attributes this moderation in inflation to several key factors. Firstly, lower crude prices have contributed to the easing of inflationary pressures. Additionally, healthy kharif sowing, which refers to the planting of crops during the monsoon season, is expected to lead to a bountiful harvest and thereby reduce food prices. Furthermore, the impact of Goods and Services Tax (GST) rate cuts is also seen as a contributing factor to the decline in inflation.

The agency believes that this improved inflation trajectory could have significant implications for monetary policy. Specifically, Crisil suggests that the Reserve Bank of India (RBI) may consider another 25-basis-point rate cut this year. This would be a welcome move for consumers and businesses, as lower interest rates can help stimulate economic growth and reduce borrowing costs.

The decline in inflation is a positive development for India’s economy, as it suggests that prices are rising at a slower pace, making goods and services more affordable for consumers. The combination of lower crude prices, healthy agricultural production, and GST rate cuts has created a favorable environment for price stability. As a result, the RBI may feel more comfortable cutting interest rates to support economic growth, without worrying about fuelling inflation.

Overall, Crisil’s report suggests that India’s retail inflation is on a downward trajectory, driven by a combination of factors. The agency’s projection of 3.2% CPI inflation for fiscal 2026 is a significant improvement from its earlier estimate, and could lead to further monetary policy easing by the RBI. This development is likely to have positive implications for India’s economy, and could help support growth and stability in the coming year.

The Reserve Bank of India (RBI) is moving forward with a proposal to allow lenders to remotely lock smartphones purchased on EMI if users default on payments. This measure aims to reduce the surge in defaults on consumer loans and give financial institutions more leverage in debt recovery. The RBI has drafted guidelines that require borrower consent and prohibit lenders from accessing personal data while locking devices.

The proposal has sparked intense debate about privacy, fairness, and digital inclusion, with stakeholders holding different views. Some argue that remote locking is necessary to curb defaults, while others express concerns about the potential misuse of personal data and the impact on vulnerable users. The RBI has clarified that remote locking will only be used as a last resort, with strict privacy controls in place, and that lenders will not be allowed to view or manipulate personal data on borrowers’ devices.

The mechanism is specifically designed for loans below ₹1 lakh, which often see higher delinquency rates. Consumers will be informed about the possibility of remote locking before accepting loan terms, and activation will occur only after formal consent. Lenders will employ certified software or apps that enable locking but not data extraction, addressing past concerns about misuse.

The policy has been met with mixed reactions from industry groups, with some arguing that it is necessary to bring discipline to loan markets, while others express concerns about the potential impact on vulnerable users. Privacy advocates have cautioned that the policy could create a punitive digital ecosystem that disproportionately affects the poor and digitally marginalized.

The RBI’s draft ‘Fair Practices Code’ aims to balance lender interests with borrower protection. Technology experts have warned that remote locking could “weaponize access to vital digital infrastructure,” potentially pushing vulnerable users deeper into exclusion during financial hardship. The coming weeks will see consultations with industry, consumer groups, and digital rights advocates before the final notification.

Ultimately, the policy’s success will depend on its ability to balance the needs of lenders with the rights of borrowers. While lenders need recovery tools, regulations must protect user rights at every stage. The RBI must ensure that the policy is implemented in a way that prioritizes dignity, transparency, and access to essential communication services.

Experts are warning that India’s economic growth potential is being hindered by additional restrictions on its financial sector. The Reserve Bank of India (RBI) is considering introducing curbs on the activities of shadow banks, also known as non-bank financial companies. These shadow banks play a significant role in India’s financial system, providing lending services to individuals and businesses.

The proposed restrictions would prevent shadow banks from having subsidiaries that offer the same lending services. Currently, these subsidiaries are regulated as separate entities, which can lead to duplication of lending functions and potentially exceed exposure limits on certain sectors or business models. The RBI’s move is aimed at reducing the risk of over-lending and promoting financial stability.

However, experts argue that these restrictions could stifle lending and curb economic growth. Shadow banks have been instrumental in providing credit to small and medium-sized enterprises, as well as to individuals who may not have access to traditional banking channels. By restricting their activities, the RBI may inadvertently reduce the availability of credit in the market, which could have a negative impact on economic growth.

The Indian economy has been facing challenges in recent times, and the proposed restrictions on shadow banks could exacerbate these issues. The country’s economic growth has been slowing down, and the government has been taking steps to boost growth and increase investment. However, the RBI’s move could undermine these efforts by reducing the availability of credit and limiting the ability of shadow banks to lend.

It is essential for the RBI to strike a balance between promoting financial stability and supporting economic growth. While regulating shadow banks is crucial to prevent over-lending and reduce risk, it is also important to ensure that these regulations do not stifle lending and curb economic growth. The RBI should consider the potential impact of its proposed restrictions on the economy and take a nuanced approach to regulating shadow banks. By doing so, it can promote financial stability while also supporting economic growth and development.

The Reserve Bank of India (RBI) has established a committee to develop a framework for the responsible and ethical use of artificial intelligence (AI) in the financial sector. The committee, led by Professor Pushpak Bhattacharyya, has submitted its report and recommendations, emphasizing the need for a balanced approach that promotes innovation while managing potential risks. The report highlights the benefits of AI in the financial sector, including enhanced customer engagement, improved credit assessment, and more effective risk monitoring.

However, the committee also notes that the increased adoption of AI poses new risks, such as bias, lack of explainability, and data protection concerns. To address these risks, the committee recommends the development of a robust financial sector data infrastructure, the creation of a dedicated AI innovation sandbox, and the establishment of suitable incentive mechanisms to promote inclusive and fair adoption of AI.

The committee also emphasizes the need for regulators to review and evaluate current policies and legal frameworks to ensure they remain conducive to AI-driven innovation while effectively managing risks. Additionally, the report recommends the establishment of a permanent AI Standing Committee to provide continuous guidance on emerging AI trends and associated risks.

The committee’s recommendations include the development of a unified AI Guidance document, the promotion of AI-driven innovations to enhance financial inclusion, and the adoption of a graded liability framework to support responsible innovation. The report also highlights the need for regulated entities to enhance their AI-related expertise, implement comprehensive data governance structures, and enforce strong model governance practices.

The committee notes that integrating AI into the financial sector introduces various risks, including data privacy concerns, algorithmic bias, market manipulation, concentration risks, cybersecurity vulnerabilities, and governance failures. To address these risks, the report recommends the development of a formal AI incident reporting system, the creation of a centralized AI repository, and the implementation of a robust, risk-based AI audit framework.

Overall, the committee’s report emphasizes the need for a responsible and ethical approach to the adoption of AI in the financial sector, and provides a comprehensive framework for unlocking the benefits of AI while maintaining public trust and ensuring ethical standards. The report’s recommendations are expected to play a crucial role in shaping the future of AI in the financial sector in India.

The RBI’s move to establish a framework for the responsible use of AI in the financial sector is timely, given the expected contribution of generative AI to India’s gross domestic product (GDP) by 2029-2030. The committee’s report is expected to provide a foundation for the development of a robust and adaptable AI policy framework for the financial sector, and to guide innovation, adoption, and risk management in the sector.

In addition to the committee’s recommendations, the RBI has also rolled out an AI/ML-powered system to combat rising incidents of digital fraud. The system, called MuleHunter.AI, is designed to assist banks in identifying and addressing mule accounts, a common method used by fraudsters to launder illicit funds.

The development of a framework for the responsible use of AI in the financial sector is a complex task, and requires the collaboration of multiple stakeholders, including regulators, financial institutions, and technology providers. The committee’s report provides a comprehensive framework for addressing the challenges and risks associated with the adoption of AI in the financial sector, and is expected to contribute to the development of a robust and adaptable AI policy framework for the sector.

Urjit Patel, the former Governor of the Reserve Bank of India (RBI), has been appointed as the Executive Director of the International Monetary Fund (IMF). This appointment was approved by the Appointments Committee of the Cabinet, as stated in a Personnel Ministry order dated August 28. Patel will serve in this position for a period of three years.

Patel’s background is in economics, and he previously held the position of RBI Governor from September 4, 2016, until his resignation on December 10, 2018. His tenure as RBI Governor ended just a day after he resigned, citing personal reasons. Despite not completing his full term, Patel’s experience and expertise in the field of economics made him a suitable candidate for the Executive Director position at the IMF.

As the 24th Governor of the RBI, Patel played a significant role in shaping the country’s monetary policy and regulating its financial system. His resignation from the position was a surprise to many, but it did not seem to hinder his future prospects. The appointment to the IMF is a notable achievement, and it reflects Patel’s reputation as a skilled economist and leader.

The IMF is an international organization that works to promote global monetary cooperation, secure financial stability, and reduce poverty. As Executive Director, Patel will be responsible for representing India’s interests and contributing to the organization’s decision-making process. His experience and knowledge of the Indian economy, as well as his understanding of global economic trends, will be valuable assets in this role.

Overall, Urjit Patel’s appointment as Executive Director of the IMF is a significant development, and it highlights his continued influence in the world of economics and finance. With his strong background and experience, Patel is well-equipped to make a positive impact in his new role and contribute to the IMF’s mission of promoting global economic stability and cooperation.

When the Reserve Bank of India (RBI) announces a rate cut, borrowers with home loans from banks often see their EMIs decrease within weeks. However, those who have borrowed from Housing Finance Companies (HFCs) may not experience the same benefit, or may have to wait months to see a reduction in their EMI. This discrepancy is due to fundamental differences in how banks and HFCs operate.

Banks raise funds primarily from customer deposits, which gives them access to low-cost capital and allows them to offer lower interest rates. They are also required to link new floating-rate home loans to an external benchmark, such as the RBI’s repo rate, which ensures that changes in policy rates are transmitted quickly to borrowers. In contrast, HFCs raise funds from banks or the market at higher costs, and their lending rates are often pegged to their own internal benchmark, the Prime Lending Rate (PLR), which they adjust at their discretion.

As a result, HFC borrowers may face delays in seeing the benefit of a rate cut, and the reduction may be smaller than the headline cut. Additionally, HFCs often have longer reset periods, typically six to twelve months, which means that borrowers may have to wait longer to access lower rates. To switch to a lower rate, HFC borrowers may need to request a conversion and pay a switch-over fee.

The impact of a rate cut on a borrower’s EMI can be significant. For example, a cut of 0.25 percentage points on a Rs. 50 lakh loan for 20 years can reduce the monthly EMI by about Rs. 820 and total interest costs by nearly Rs. 2 lakh. However, the size of the rate cut announced by the RBI is only half the story, and the other half is whether, when, and how the lender passes on the benefit.

When deciding which lender to borrow from, borrowers should consider factors such as interest rates, loan sanctioning processes, and credit score requirements. While banks may offer lower interest rates and faster transmission of rate cuts, HFCs may be more accommodating for borrowers with low credit scores or irregular income. Ultimately, the decision comes down to striking a balance between cost and convenience.

Experts recommend that borrowers should be aware of the trade-offs involved in choosing an HFC over a bank, such as slower benefit from rate cuts, potentially higher interest costs, and fees for switching or converting rates. Proactively reviewing loan terms and monitoring interest rate movements can help maximize savings.

To address the remaining gaps between banks and HFCs, experts suggest that HFCs should be required to use external benchmarks that speed up rate transmission for their customers. Standardizing reset cycles, improving disclosure of the “true” annual percentage rate, and making it easier and cheaper for borrowers to switch lenders would give consumers more power to make the choice that suits them best. The ultimate goal is a housing finance market where the decision between a bank and an HFC is based purely on service and borrower fit, not on who will pass on an RBI rate cut first.

The Reserve Bank of India (RBI) Deputy Governor, M Rajeshwar Rao, recently commended the performance of banks in Jharkhand in the ongoing re-KYC (Know Your Customer) drive. The drive, which began on July 1, aims to update customer information and promote financial inclusion. Rao attended a special camp in Ormanjhi Panchayat Bhavan, where he encouraged senior bank officials to participate and supervise the drive, ensuring that villagers are informed in advance and that the administration and gram panchayats are involved to facilitate mass participation.

Rao emphasized that the re-KYC program has been simplified, and banking correspondents are now allowed to speed up the process. He noted that the campaign is crucial for inclusive service delivery and that the RBI is committed to ensuring that no customer is left behind. At the national level, there are approximately 7 crore pending re-KYC cases, with an additional 3.63 crore expected to be added this year, bringing the total target to 10.63 crore.

In Jharkhand, the re-KYC target is 1.14 crore. Rao encouraged villagers to participate in the camps in large numbers, highlighting the importance of keeping bank accounts updated to receive uninterrupted banking services. He also emphasized that financial inclusion is a key objective of the re-KYC drive, aiming to connect people with the financial system and enable them to access its benefits.

The Regional Director of RBI, Ranchi, Prem Ranjan Prasad Singh, reported that special efforts have been made in Ranchi since October last year, resulting in the completion of re-KYC in over 12 lakh accounts. Singh noted that Jharkhand’s performance in this regard has been remarkable, demonstrating the state’s commitment to financial inclusion. The RBI’s efforts to promote financial inclusion and update customer information are expected to have a positive impact on the state’s economy and its citizens.

The Reserve Bank of India (RBI) is facing a pressing priority to support economic growth, with domestic demand and the global trade environment signaling the need for intervention. While the RBI has responded well to economic challenges with timely rate moves, it is time to re-examine its developmental mandate and consider broader, structural policy options to shape India’s long-term economic trajectory. The country’s growth projections of 6-6.5% for the near term are not sufficient to achieve its ambition of becoming a developed economy by 2047, which requires sustained annual real GDP growth of 7-8% over the next two decades.

Sectoral trends indicate an uneven growth pattern, with agriculture and MSMEs performing reasonably well, while large industries are experiencing slow growth. Bank credit growth data also supports this cautious outlook, with large industries recording lower credit growth than overall credit increase. The RBI Governor has noted that large corporates are increasingly tapping alternative funding avenues, which partly explains slower bank credit uptake.

International headwinds, including recent tariff hikes by the US, are also likely to pull down growth. In this context, it is an opportune time for the RBI to revisit structural monetary policy tools that go beyond conventional repo rate changes. The People’s Bank of China (PBoC) has implemented instruments aimed at supporting targeted sectors, recognizing the heterogeneity of economic needs. India has experimented with similar tools, such as Targeted Long-Term Repo Operations (TLTROs), and the RBI could expand its monetary policy toolkit to support sectoral resilience.

The RBI needs to consider proactive, medium to long-term monetary policy interventions to support growth. This could include instruments like Pledged Supplementary Lending for infrastructure lending by institutions. With global uncertainties mounting and domestic demand showing signs of fatigue, the RBI must examine its policy options to support India’s economic trajectory. The country’s ambition of becoming a developed economy by 2047 requires sustained growth, and the RBI has a critical role to play in achieving this goal.

The World Bank’s 2025 Country Economic Memorandum highlights the need for India to sustain annual real GDP growth of around 7-8% over the next two decades to achieve high-income status. The RBI must work towards supporting this growth trajectory by using a range of monetary policy tools, including those that target specific sectors and industries. By doing so, the RBI can help shape India’s long-term economic trajectory and support the country’s development goals.

The Reserve Bank of India (RBI) has introduced a new regulatory framework for co-operative banks, aiming to enhance their efficiency and competitiveness. The framework includes proposals for easing business authorization norms for urban co-operative banks (UCBs). The RBI has issued a draft circular outlining the proposed changes, which are expected to boost the growth of UCBs.

One of the key proposals is the introduction of harmonized eligibility criteria for business authorization for UCBs. This move is intended to simplify the process of obtaining business authorization and reduce the regulatory burden on UCBs. The RBI has also proposed a new regime for co-operative bank branch expansion and ATM setup, which is expected to facilitate the expansion of UCBs into new areas and improve their accessibility to customers.

The proposed framework also includes measures to enhance the governance and management of UCBs. The RBI has suggested the introduction of a board of management for UCBs, which will be responsible for overseeing the bank’s operations and ensuring that they are in compliance with regulatory requirements. The framework also includes provisions for improving the financial inclusion and customer protection measures of UCBs.

The RBI’s proposals have been welcomed by the industry, with many experts viewing them as a positive step towards strengthening the co-operative banking sector. The new framework is expected to enable UCBs to operate more efficiently and effectively, and to provide better services to their customers. The RBI has invited comments from stakeholders on the proposed framework, and the final guidelines are expected to be issued after considering the feedback received.

Overall, the RBI’s new regulatory framework for co-operative banks is a significant development that is expected to have a positive impact on the sector. The proposed changes are intended to enhance the efficiency, competitiveness, and governance of UCBs, and to improve their ability to serve their customers. The framework is also expected to contribute to the overall stability and growth of the Indian banking system.

The draft circular issued by the RBI is a step towards creating a more enabling environment for UCBs to operate and grow. The proposed harmonized eligibility criteria for business authorization will help to reduce the regulatory burden on UCBs and make it easier for them to expand their operations. The new regime for branch expansion and ATM setup will also help to improve the accessibility of UCBs to customers and increase their reach.

The RBI’s proposals are part of its efforts to strengthen the co-operative banking sector and improve its overall performance. The sector has been facing several challenges in recent years, including poor governance, weak financials, and limited accessibility. The RBI’s new framework is intended to address these challenges and create a more conducive environment for UCBs to operate and grow.

The Government of India has announced the auction of two dated securities worth a total of Rs 25,000 crore. The auction, which will be conducted by the Reserve Bank of India (RBI) on July 11, 2025, includes a new Government Security (GS) maturing on July 14, 2032, worth Rs 11,000 crore, and a re-issue of the 7.09 per cent GS maturing on November 25, 2074, worth Rs 14,000 crore. The government has the option to retain an additional subscription of up to Rs 2,000 crore for each of the securities.

The auction will be conducted using the e-Kuber system, and the settlement will be completed on July 14, 2025. A dated security is a type of government bond issued with a fixed maturity date and interest rate, and it pays interest to the investor at regular intervals, usually every six months. These are long-term borrowings by the government to finance its fiscal needs.

The auction will follow a multiple-price method, where both competitive and non-competitive bids can be submitted electronically on the RBI’s e-Kuber platform. Non-competitive bids are allowed between 10:30 a.m. and 11:00 a.m., while competitive bids can be submitted from 10:30 a.m. to 11:30 a.m. on the day of the auction. The results will be announced on the same day, and successful bidders must make payments by the settlement date.

The securities will be eligible for “When Issued” trading from July 8 to July 11, 2025, and will be issued in a minimum amount of Rs 10,000 and in multiples of Rs 10,000 thereafter. Up to 5 per cent of the notified amount of each security is reserved for eligible individuals and institutions under the non-competitive bidding facility, which can also be accessed through the Retail Direct portal. Interest on these securities will generally be paid half-yearly.

The RBI has also stated that in the event of technical failures, physical bids may be submitted in exceptional cases using prescribed forms. Investors are allowed to place multiple competitive bids, provided the total does not exceed the notified amount. The auction is a significant step by the government to raise funds to finance its fiscal needs, and it is expected to attract a wide range of investors, including primary dealers, banks, and individual investors.

India’s foreign exchange (forex) reserves have seen a significant rebound, increasing by $4.8 billion to reach $702.78 billion, according to recent data. This rise comes after a decline in the previous week, indicating a positive trend for the country’s forex reserves. The increase in forex reserves is a promising sign for the Indian economy, as it provides a cushion against external shocks and supports the value of the rupee.

The substantial rise in forex reserves has brought the total reserves closer to their all-time high, with the country’s overall kitty now standing at $702.78 billion. This increase is also notable when compared to Pakistan’s GDP, which is almost half of India’s forex reserves, highlighting the significant difference in the economic strength of the two neighboring countries.

The rise in forex reserves can be attributed to several factors, including a reduction in the forward book, which is the amount of currency that traders and investors have agreed to buy or sell at a future date. A leaner forward book means that there is less pressure on the rupee, making it more stable and less susceptible to fluctuations. This, in turn, bolsters the rupee shield, providing a level of protection against external economic shocks.

The $700 billion plus forex reserve pile is a significant asset for India, providing a level of comfort and stability for the economy. It also gives the country the ability to manage its external debts and meet its foreign exchange requirements. The Reserve Bank of India (RBI) has been actively managing the forex reserves, using various tools and strategies to maintain the stability of the rupee and ensure that the country’s external sector remains robust.

Overall, the increase in India’s forex reserves is a positive development for the country’s economy, providing a level of protection and stability in an uncertain global economic environment. The significant size of the forex reserve pile, combined with a leaner forward book, makes the rupee more resilient to external shocks, and provides a level of comfort for investors and traders.

The affordability of homebuyers in India has improved significantly in the first half of 2025, thanks to the Reserve Bank of India’s (RBI) decision to slash the repo rate by 100 basis points. According to a report by Knight Frank India, the house purchase affordability index has shown a marked improvement, with most cities becoming more affordable for homebuyers. The report highlights that Ahmedabad is the most affordable housing market among the top eight cities, with a ratio of 18%, followed by Pune and Kolkata.

Mumbai, which has traditionally been one of the least affordable cities, has seen a significant improvement in its affordability index, with the ratio decreasing from 50% in 2024 to 48% in the first half of 2025. This is the first time that Mumbai’s affordability index has fallen below the 50% mark, which is considered the outer limit of affordability. The improvement in affordability can be attributed to the reduction in home loan rates, making it easier for homebuyers to purchase properties.

However, the National Capital Region (NCR) has seen a marginal decline in affordability, with households now needing to pay 28% of their income to acquire an average property, up from 27% in 2023. This is due to the steep increase in residential prices, which has overshadowed the impact of the interest rate cuts.

The Knight Frank Affordability Index is based on the Equated Monthly Instalment (EMI) to income ratio for an average household. The report suggests that as incomes grow and the economy gains strength, financial confidence among end-users improves, motivating them to invest in home ownership. With the RBI’s healthy GDP growth estimate for FY 2026 and a favourable interest rate scenario, affordability levels are expected to support homebuyer demand in 2025.

Overall, the report notes that affordability levels are now at their best since the pandemic and are significantly better than the levels seen at the end of 2024. The improvement in affordability is expected to boost the real estate sector, with homebuyers likely to take advantage of the favourable interest rate scenario and invest in properties.

The Reserve Bank of India (RBI) has announced a list of 13 bank holidays for the month of July 2025. It is essential to be aware of these holidays to avoid any inconvenience when visiting the bank. The bank holidays in July 2025 include various regional and cultural celebrations, such as Kharchi Puja, Guru Hargobind Ji’s Birthday, Behdeinkhlam, and Drukpa Tsechhu, among others.

In addition to these regional holidays, the usual weekly holidays, including Sundays and the second and fourth Saturdays, are also observed. To minimize disruptions, it is crucial to plan banking activities in advance, taking into account the scheduled bank holidays.

Fortunately, online banking facilities remain available 24/7, allowing customers to manage their finances, make electronic payments, check account balances, transfer money, and pay bills from the comfort of their own homes. This convenient option eliminates the need to visit the bank physically, reducing the likelihood of inconvenience caused by bank holidays.

To stay informed, customers can visit the RBI website to access the list of bank holidays and plan their banking activities accordingly. By doing so, individuals can avoid unnecessary trips to the bank and ensure that their financial transactions are completed smoothly.

In conclusion, being aware of the July 2025 bank holidays and utilizing online banking facilities can help individuals plan their banking work efficiently and avoid any potential inconvenience. With the RBI’s list of bank holidays and the convenience of online banking, customers can stay on top of their finances and manage their banking needs with ease. By taking a few simple steps, individuals can ensure a hassle-free banking experience throughout the month of July 2025.

According to the Reserve Bank of India (RBI), sales of listed private non-financial companies grew by 7.1% in the fourth quarter of 2024-25, compared to 8% growth in the previous quarter and 6.9% in the same quarter of the previous year. This growth was driven by the performance of non-IT services companies, which saw a 10% increase in sales, led by the telecommunications and transport & storage sectors.

In contrast, sales growth in the manufacturing sector moderated to 6.6% in the fourth quarter, down from 7.7% in the previous quarter. While major industries such as electrical machinery, chemicals, food products, and pharmaceuticals saw double-digit sales growth, the weak performance of the petroleum industry pulled down the sector’s overall sales growth.

IT companies saw an improvement in sales growth, with an 8.6% increase in the fourth quarter, up from 6.8% in the previous quarter and 3.1% in the same quarter of the previous year. Non-IT services companies continued to perform well, with a 10% increase in sales.

The costs of raw materials for manufacturing companies rose by 8.3%, in line with sales growth, but the raw material to sales ratio remained stable. Staff costs increased by 10% for manufacturing companies, 6.4% for IT companies, and 9.5% for non-IT services companies. The staff cost to sales ratio remained stable for all sectors.

The operating profit of manufacturing and non-IT services companies rose by 8.1% and 18.4%, respectively, while IT companies saw a modest 2.4% increase. The operating profit margin improved for manufacturing and non-IT services companies, but declined for IT companies. Overall, the data suggests that while the manufacturing sector saw moderate growth, non-IT services companies and IT companies performed well, driven by the strong performance of telecommunications, transport & storage, and other sectors.

The Reserve Bank of India (RBI) conducted a government switch auction on Monday, with a notified amount of ₹25,000 crore. However, the RBI only accepted ₹9,296 crore, which is significantly lower than the initial amount planned. This suggests that market participants were seeking higher yields than the RBI was willing to offer.

According to traders, the RBI’s comfort level with regards to yields was not aligned with the demands of market participants. As a result, the RBI had to limit its acceptance to ₹9,296 crore. The switch auction was initially planned to swap nine securities maturing in the financial year 2027 (FY27) with securities maturing beyond FY32.

In a switch auction, the RBI essentially swaps the outstanding amount in a security with a bond that matures at a later date. This process helps to manage the government’s debt and liquidity in the market. By swapping shorter-term securities with longer-term ones, the RBI aims to reduce the government’s liability in the short term and create more space for borrowing in the future.

The lower-than-expected acceptance by the RBI may indicate that market participants are seeking higher returns on their investments, possibly due to rising inflation expectations or concerns about the economy. This could lead to higher borrowing costs for the government in the future, as it may need to offer higher yields to attract investors.

The RBI’s decision to limit its acceptance in the switch auction may also have implications for the overall bond market. With the RBI not accepting the full notified amount, there may be a surplus of shorter-term securities in the market, which could put downward pressure on their prices and drive up yields. This, in turn, could make it more expensive for the government to borrow in the short term, which could have a ripple effect on the overall economy. Overall, the RBI’s cautious approach in the switch auction suggests that it is closely monitoring the bond market and yield curves, and is taking steps to manage the government’s debt and liquidity in a prudent manner.

The Reserve Bank of India (RBI) has introduced the Separate Trading of Registered Interest and Principal of Securities (STRIPS) facility in state government bonds, a move that is expected to be a game-changer for insurance companies. STRIPS allows bond traders to separate and sell the principal and coupon payments of a bond separately, enabling insurers to manage their cash flows more effectively and align their investment income with future payouts to policyholders.

This facility is particularly significant for insurance companies, which have long-term liabilities and require stable cash flows to meet their policy obligations. By using STRIPS, insurers can sell near-term asset inflows and match their asset and liability cash flows more closely. This can help reduce reinvestment risk, which refers to the possibility of investors not being able to deploy proceeds from bonds at a desirable rate of interest.

STRIPS in state bonds offer a yield advantage of 30-40 basis points over STRIPS in central government securities (G-sec), making them attractive to long-term investors such as insurers, pension funds, and passive debt funds. The RBI has specified that all fixed-coupon bonds issued by state governments with a residual maturity of up to 14 years and a minimum outstanding of Rs1,000 crore are eligible for STRIPS.

The introduction of STRIPS in state government bonds is expected to increase transaction volumes and provide insurers with more flexibility in managing their investments. According to data, the face value of STRIPS trades in G-secs has risen to ₹2.47 lakh crore in FY25 from ₹38,383 crore pre-Covid in FY20. Insurers have seen higher demand for long-term products offering guaranteed returns, and the introduction of STRIPS in state bonds will help them deploy inflows in these products more effectively.

Overall, the RBI’s decision to allow STRIPS in state government bonds is a significant development for insurance companies, enabling them to better manage their cash flows, reduce reinvestment risk, and increase their investment returns. This move is expected to have a positive impact on the insurance industry and contribute to the growth of the bond market in India.

The Reserve Bank of India (RBI) has introduced new guidelines aimed at enhancing customer security and improving banking services. As per the RBI KYC (Amendment) Directions 2025, effective from January 1, 2026, banks and regulated institutions will be required to remind customers to update their Know Your Customer (KYC) information in a timely manner. This directive applies to all customers, including those with accounts linked to government schemes such as Jan Dhan Yojana, Direct Benefit Transfer (DBT), and Electronic Benefit Transfer (EBT).

Under the new rules, banks must send customers at least three reminders to update their KYC before the due date, including one physical letter sent via post. Additional reminders can be sent through SMS, email, or mobile app. If the KYC update is still pending after the due date, banks must send three more reminders, including another physical letter. Each notification must provide clear instructions, methods of assistance, and the consequences of not updating KYC.

To facilitate the KYC update process, banks’ Business Correspondents (BCs) will be authorized to assist customers in rural and remote areas. If a customer’s information remains the same or has only changed their address, they can self-declare the update, which will be digitally recorded by the BC in the bank’s system.

Notably, banks will not restrict transaction facilities for customers with pending KYC updates, provided they update their KYC by June 30, 2026, or within one year of the KYC due date. The RBI has introduced these measures to address the issue of delayed KYC updates, particularly in government-related schemes. By ensuring timely reminders and providing assistance, the RBI aims to improve the overall banking experience and security for customers. Banks will be required to maintain a record of all notifications, enabling auditing and ensuring compliance with the new regulations.

The Agri and All Trade Chamber has expressed its appreciation for the Reserve Bank of India’s (RBI) decision to reduce the repo rate from 6% to 5.5% and the cash reserve ratio (CRR) by 1%. According to S. Rethinavelu, the chamber’s president, this move is expected to significantly improve liquidity in the banking system, with the CRR cut alone releasing approximately ₹2.5 lakh crore into the economy.

The reduction in the repo rate will enable banks to borrow at cheaper rates from the RBI, which is likely to lead to reduced lending rates for various sectors, including home loans, vehicle loans, business borrowings, agriculture, and Micro, Small, and Medium Enterprises (MSMEs). This, in turn, will ease borrowing costs and inject much-needed liquidity into the system.

Rethinavelu believes that the rate cut will serve as a catalyst for growth and confidence, particularly in the agricultural sector where input costs have been fluctuating and credit demand is rising. The measures taken by the RBI will strengthen MSMEs’ ability to access loans and scale operations, creating more employment opportunities.

The monetary policy adjustment is expected to ease working capital pressures and encourage industrial players to invest in productivity, innovation, and green infrastructure, contributing to national growth and global competitiveness. The rate cut will also encourage technology adoption and plant modernization, supporting export-oriented industries by improving cost-efficiency.

The Agri and All Trade Chamber has urged banks to ensure that the benefits of the RBI’s decision are promptly passed on to businesses, farmers, and industrial enterprises, maximizing the impact of the progressive move. Overall, the chamber is optimistic that the RBI’s decision will have a positive impact on the economy, particularly in the agricultural and MSME sectors, and will contribute to the country’s growth and competitiveness. The move is seen as a timely measure to boost economic growth and confidence, and the chamber is hopeful that it will have a positive impact on the economy in the coming months.

Banks in certain parts of India will be closed on June 6, 2025, due to the celebration of Eid ul-Adha, also known as Bakra Eid. This is according to the Reserve Bank of India’s (RBI) website. Eid ul-Adha is a significant religious festival in the Islamic calendar, commemorating the sacrifice of Prophet Ibrahim and his willingness to sacrifice his son as an act of obedience.

On June 6, banks in only two cities, Kochi and Thiruvananthapuram, will remain closed. However, on June 7, banks in several states will be closed, with only a few cities, including Ahmedabad, Gangtok, Itanagar, Kochi, and Thiruvananthapuram, having their banks remain open.

Eid ul-Adha, which falls on June 7, 2025, is a day of spiritual renewal, devotion, and submission to Allah. It is celebrated by Muslims worldwide and is a significant occasion for reflection and sacrifice.

During bank holidays, customers will not be able to conduct transactions related to cheques or promissory notes. However, they can still access their accounts through net banking, mobile applications, and ATMs, which will remain operational. The RBI has declared a total of five holidays in June, including June 6, 7, 11, 27, and 30. Additionally, bank holidays are observed every second and fourth Saturday of the month.

It is essential for customers to plan their banking activities accordingly, taking into account the holiday schedule to avoid any inconvenience. With the advancement of digital banking, customers can still manage their accounts and conduct transactions online, even on bank holidays. The RBI’s website provides a list of bank holidays, and customers can check the specific holidays observed in their region to plan their banking activities accordingly. Overall, while some banks may be closed on June 6 and 7, customers can still access their accounts and conduct transactions through digital channels.

The Reserve Bank of India (RBI) has introduced a revised framework for banks and non-banking financial companies (NBFCs) to follow when dealing with borrowers who fail to pay their Equated Monthly Installments (EMIs) on time. Under the new rules, lenders can no longer impose "penal interest" on borrowers who miss payments. Instead, they are allowed to charge a "penal charge" under strict conditions.

The key changes to the framework include:

1. No penal interest: Lenders cannot levy additional interest as a penalty for EMI delays.
2. Only penal charge allowed: A fixed penal charge can be imposed, but it must not be added to the principal loan amount.
3. No interest on penal charges: Financial institutions cannot charge extra interest on the penal charge itself.
4. Mandatory compliance: All banks and NBFCs are required to follow these new norms.

The RBI has introduced these changes to eliminate unnecessary and arbitrary charges levied by lenders, providing borrowers with better clarity and protection. The new framework aims to make the loan process more transparent and provide borrowers with more flexibility and cost savings.

Additionally, banks and NBFCs are no longer allowed to include hidden clauses in loan agreements that force customers to maintain the loan for a minimum period. This change is expected to ease the financial stress on borrowers, especially in cases of unavoidable delays in EMI payments.

The revised framework ensures greater transparency and fairness in the lending process, and borrowers can expect to benefit from these changes. However, it is always advisable to consult with a certified financial advisor or the respective bank before making any decisions related to loans or banking, as RBI regulations are subject to periodic updates.

The Reserve Bank of India (RBI) has expanded the eligibility criteria for STRIPS (Separate Trading of Registered Interest and Principal of Securities) to include all central government bonds and select state securities. This move aims to enhance liquidity and investor access in the government securities market. STRIPS allow the separation of interest and principal components of government securities, enabling them to be traded independently as zero-coupon instruments. This increases liquidity and provides additional instruments for fixed-income investors.

The key amendments to the STRIPS guidelines include the expansion of eligibility criteria to all fixed coupon securities issued by the Government of India, regardless of their maturity date. Additionally, fixed coupon securities issued by State Governments/Union Territories are now eligible for stripping if they have a residual maturity of up to 14 years and a minimum outstanding amount of Rs. 1,000 crore on the day of stripping. The operational system reference has also been updated to reflect the migration to a more modern and centralized platform for processing such transactions.

The implications of these amendments are significant, with increased liquidity and participation from a wider range of investors, including pension funds, insurance companies, and banks. The development of a long-term zero-coupon yield curve is also expected to be supported, enhancing pricing efficiency. Furthermore, state governments will gain better access to secondary market liquidity, potentially improving the attractiveness of State Development Loans (SDLs).

The expanded eligibility criteria for STRIPS is expected to modernize the operational framework and align it with current market dynamics. The RBI’s decision to include state securities in the STRIPS framework is a significant development, as it will provide state governments with better access to liquidity and potentially reduce their borrowing costs. Overall, the amendments to the STRIPS guidelines are expected to enhance the efficiency and liquidity of the government securities market, benefiting both investors and issuers.

The RBI’s move to expand the STRIPS eligibility criteria is also expected to support the development of a more diversified and efficient government securities market. By providing investors with a wider range of instruments to choose from, the RBI aims to increase participation and liquidity in the market. The inclusion of state securities in the STRIPS framework is also expected to promote financial inclusion and support the development of state governments’ borrowing programs. With the updated guidelines, the RBI is taking a significant step towards modernizing the government securities market and promoting greater efficiency and liquidity.

The Reserve Bank of India (RBI) has issued draft directions to regulate co-lending arrangements (CLAs) between financial entities, aiming to increase credit penetration and financial inclusion. The draft Reserve Bank of India (Co-lending Arrangements) Directions, 2025, was released on April 9, 2025, and applies to regulated entities, excluding small finance banks, local area banks, and regional rural banks. The RBI had previously issued a circular in 2020 governing co-lending by banks and non-banking financial companies (NBFCs) to the priority sector.

The draft directions expand the scope of CLAs, allowing co-lending between banks, NBFCs, or a combination of both, and not limiting it to priority sectors. The directions lay down standards for permitted entities to follow when entering into CLAs, including calculations of interest rates and fees, operational arrangements, reporting requirements, and default loss guarantees. The directions only permit the co-origination model, where loans are given jointly to borrowers at origination, and remove the direct assignment model.

The draft directions provide guidance on key aspects of CLAs, such as borrower selection, funding ratio, revenue and risk sharing, and roles and responsibilities of co-lenders. Co-lenders must source funds independently and on a fee basis, rather than through profit-sharing. The directions also clarify the computation and charging of interest and fees from borrowers under CLAs. Co-lenders must issue a key fact statement disclosing details of the CLA and other necessary information.

The RBI has made it clear that any fee paid to co-lenders under the CLA for funding loans must be agreed upon upfront under a servicing arrangement, independent of interest rates charged to borrowers. The draft directions also allow co-lenders to obtain default loss guarantees from sourcing or funding entities to mitigate default consequences. Any subsequent transfers of loan exposures under CLAs must conform to the Master Direction – Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021, with the prior consent of the co-lender.

The RBI’s approach emphasizes transparency in co-lending, and the proposed changes under the draft directions are expected to lead to greater financial inclusion. The draft directions are a welcome reform, and the RBI’s efforts to regulate CLAs are aimed at increasing credit penetration and promoting financial inclusion for wider segments of society. The draft directions are a significant step towards achieving this goal and are likely to have a positive impact on the financial sector.

Banks across India will be closed on May 24, as it falls on the fourth Saturday of the month. According to the Reserve Bank of India’s (RBI) official calendar, all banks regulated by the RBI remain shut on the second and fourth Saturdays of every month. This means that physical branch services, including cash deposits and withdrawals, account openings, and loan processing, will not be available on this day.

However, customers can still access digital banking services, such as mobile banking apps, ATMs, and electronic payment systems like NEFT, RTGS, and IMPS. These services will continue to operate uninterrupted, allowing customers to pay bills, transfer money, and conduct other transactions.

The RBI’s official website provides a calendar of bank holidays, which includes regional holidays. In addition to the nationwide holiday on the fourth Saturday, there are also upcoming regional holidays in May. On May 26, banks will be closed in Tripura to observe the birthday of Nazrul Islam, and on May 29, banks will be closed in Himachal Pradesh to observe Maharana Pratap Jayanti.

It’s worth noting that while physical branch services may be unavailable on certain days, digital banking services provide a convenient alternative for customers to manage their finances. Customers can use mobile banking apps to check their account balances, transfer funds, and pay bills, among other services. ATMs and electronic payment systems also offer a range of services, including cash withdrawals and fund transfers.

Overall, while bank branches may be closed on certain days, digital banking services ensure that customers can still access their accounts and conduct transactions with ease. It’s always a good idea for customers to check the RBI’s official website or their bank’s website to confirm holiday schedules and plan their banking activities accordingly.

The Reserve Bank of India (RBI) has granted “in-principle” approval to Emirates NBD Bank, a UAE-headquartered bank, to set up a Wholly Owned Subsidiary (WOS) in India. The approval is part of the “Scheme for Setting up of WOS by foreign banks in India” and allows Emirates NBD Bank to convert its existing branches in India into a WOS. The bank currently operates in India through branches in Chennai, Gurugram, and Mumbai.

The “in-principle” approval is subject to certain conditions, which the bank must comply with before the RBI grants a license for commencement of banking business in WOS mode. Once the conditions are met, the RBI will consider granting a license under Section 22 (1) of the Banking Regulation Act, 1949.

The move towards local incorporation of foreign banks in India is aimed at creating a separate legal entity with its own capital base and local board of directors. This provides a clear delineation between the assets and liabilities of the domestic bank and those of its foreign parent, ensuring that there is a ring-fenced capital and assets within the host country. Local incorporation also provides effective control to local regulators and clarity on the applicability of the laws of the country of incorporation.

Under the scheme, all foreign banks that wish to operate in India in the future must do so through a WOS. This move is expected to enhance the stability and security of the Indian banking system, while also providing foreign banks with greater flexibility and autonomy to operate in the country. Emirates NBD Bank’s decision to set up a WOS in India is a significant step towards deepening its presence in the country and expanding its banking services to Indian customers.

The RBI’s approval is a positive development for foreign banks looking to establish a presence in India, and is expected to attract more foreign investment into the country’s banking sector. The move is also in line with the Indian government’s efforts to liberalize the banking sector and encourage foreign investment, while ensuring that the sector remains stable and secure. Overall, the approval is a significant step towards promoting greater cooperation and collaboration between Indian and foreign banks, and is expected to have a positive impact on the country’s banking sector.

The Indian Rupee (INR) has weakened in Tuesday’s Asian session due to dovish bets on the Reserve Bank of India (RBI) and concerns over potential trade tariffs. Consumer inflation in India fell to a near six-year low in April, increasing the likelihood of the RBI extending its rate cutting cycle, which undermines the INR. However, a decline in crude oil prices and a potential multi-phase trade deal between the US and India could limit the currency’s losses. India is discussing a trade deal with the US, which is expected to be structured in three tranches, with an interim agreement possibly reached before July.

The USD/INR pair remains bearish, with the price capped below the 100-day Exponential Moving Average (EMA) on the daily chart. The first downside target for USD/INR is 85.00, with further potential targets at 84.61 and 84.20. On the other hand, sustained trading above the 100-day EMA could lead to a move towards the 86.00-86.05 zone.

The Indian Rupee is highly sensitive to external factors, including crude oil prices, the value of the US Dollar, and foreign investment. The RBI actively intervenes in forex markets to maintain a stable exchange rate and adjusts interest rates to control inflation. Macroeconomic factors such as inflation, interest rates, economic growth rate, balance of trade, and foreign investment inflows also influence the value of the Rupee.

Higher inflation is generally negative for the currency, while higher interest rates can be positive due to increased demand from international investors. The RBI’s actions, including interest rate decisions and intervention in forex markets, play a significant role in shaping the Rupee’s value. Investors will be watching the Fedspeak later on Tuesday, with several Federal Reserve officials set to speak, which could impact the US Dollar and subsequently the INR.

In related news, ICRA has forecast India’s GDP growth at 6.9% in the quarter ended March 31, and at 6.3% for the full 2024-25 fiscal year, which is lower than the National Statistics Office (NSO) estimates. Moody’s has also lowered the US rating from ‘Aaa’ to ‘Aa1’, citing concerns over the country’s ballooning deficits and interest costs. Overall, the Indian Rupee remains vulnerable to external factors and economic indicators, and its value is expected to remain volatile in the coming days.

The Reserve Bank of India (RBI) has announced that it is considering granting a license to Emirates NBD Bank PJSC to commence banking business in India through a wholly-owned subsidiary (WOS) mode. This decision is in line with the provisions of Section 22 (1) of the Banking Regulation Act, 1949. The RBI has stated that the license will be granted only after the bank has fulfilled all the necessary conditions laid down by the regulator as part of the ‘in-principle’ approval.

Emirates NBD Bank PJSC is a leading banking group in the Middle East, with a significant presence in the UAE and other countries. The bank’s decision to set up a wholly-owned subsidiary in India is seen as a strategic move to expand its operations and tap into the country’s growing economy. The Indian banking sector has been growing rapidly, driven by increasing demand for financial services and a large unbanked population.

The RBI’s decision to consider granting a license to Emirates NBD Bank PJSC is subject to the bank’s compliance with various conditions, including meeting the minimum capital requirements, adhering to regulatory norms, and demonstrating a robust business plan. The bank will also be required to comply with Indian regulations, including those related to know-your-customer (KYC) and anti-money laundering (AML) norms.

The entry of Emirates NBD Bank PJSC into the Indian banking sector is expected to increase competition and provide more options for customers. The bank’s presence is also likely to lead to an increase in foreign investment in the country, as well as greater collaboration between Indian and foreign banks. The RBI’s move to allow foreign banks to set up wholly-owned subsidiaries in India is seen as a significant step towards liberalizing the country’s banking sector and increasing its integration with the global economy.

Overall, the RBI’s consideration of granting a license to Emirates NBD Bank PJSC is a positive development for the Indian banking sector, and is likely to have a significant impact on the country’s financial landscape. The bank’s entry into the Indian market is expected to bring in new technologies, products, and services, and increase the overall efficiency and competitiveness of the banking sector. With the RBI’s approval, Emirates NBD Bank PJSC will be able to establish a strong presence in India and contribute to the country’s economic growth.

The Reserve Bank of India (RBI) has released the minutes of the Monetary Policy Committee (MPC) meeting, which took place from April 7-9, 2025. The meeting resulted in a 25 basis point cut in the repo rate to 6% and a shift in the policy stance from ‘neutral’ to ‘accommodative’. This decision was made amidst global trade uncertainties and a slowdown in commodity prices. RBI Governor Sanjay Malhotra stated that India’s inflation is expected to align with the target during FY26, citing disinflationary forces outweighing inflationary risks.

The current Consumer Price Index (CPI) inflation rate is 3.3%, which is the lowest since August 2019. The MPC voted unanimously to ease policy rates for the second consecutive time, aiming to nurture domestic demand amid a global slowdown. The drop in crude oil prices and moderated commodity inflation have led to lower CPI readings. The RBI’s positive inflation forecast is based on the expectation that disinflationary forces will continue to outweigh inflationary risks, allowing for monetary easing to support economic growth.

The MPC members expressed varying opinions on the implications of global trade and tariffs. Some members, such as Sanjay Malhotra and Saugata Bhattacharya, emphasized the favorable inflation outlook and the need for policy easing to support domestic demand. Others, such as M Rajeshwar Rao and Rajiv Ranjan, cautioned about the potential impact of US tariffs on India’s exports and market stability.

The key factors contributing to the easing inflation include falling crude prices and weak global demand. However, the major concern remains the impact of US tariffs on exports and growth. The RBI will continue to monitor global developments and their impact on India’s economy. Overall, the RBI’s decision to cut the repo rate and shift the policy stance to ‘accommodative’ is expected to support economic growth and keep inflation within the target range of 4% ± 2%.

The RBI’s inflation forecast is based on the assumption that global trade tensions will not escalate further and that commodity prices will remain stable. The bank will continue to monitor the situation and adjust its policies accordingly. The decision to cut the repo rate is expected to have a positive impact on the economy, as it will make borrowing cheaper and increase liquidity in the system. However, the RBI will need to be cautious and ensure that the inflation rate does not exceed the target range.

The Reserve Bank of India (RBI) has lifted the restrictions imposed on Pimpri Chinchwad Cooperative Bank, a significant development for the cooperative banking sector. The bank, based in Pune, had been under the Supervisory Action Framework (SAF) for several years due to concerns over its financial health. However, following improvements in its financial position, the RBI has withdrawn the restrictions, effective immediately.

The decision was communicated to the bank’s CEO, citing the bank’s improved financial performance as of March 31, 2024. The RBI had initially imposed the SAF restrictions in June 2021, but under the leadership of Chairman Shirish Deshpande, the bank has made significant strides in enhancing its financial health. The bank has not only exited the SAF framework but has also successfully completed the amalgamation of Pune Commercial Cooperative Bank, marking a strategic expansion and consolidation of its operations.

The lifting of restrictions is expected to grant the bank greater operational freedom, enabling it to pursue future growth opportunities. The RBI’s decision is a testament to the bank’s hard work and commitment to improving its financial position. With the removal of restrictions, Pimpri Chinchwad Cooperative Bank is poised to enhance its services and expand its customer base, contributing to the growth of the cooperative banking sector as a whole.

The development is also a significant milestone for Chairman Deshpande, who has led the bank’s turnaround efforts. Under his leadership, the bank has demonstrated its ability to navigate challenges and emerge stronger. The bank’s improved financial health and successful amalgamation of Pune Commercial Cooperative Bank demonstrate its potential for future growth and expansion. Overall, the RBI’s decision to lift restrictions on Pimpri Chinchwad Cooperative Bank is a positive development for the cooperative banking sector, and the bank is well-positioned to capitalize on new opportunities and continue its growth trajectory.

The Reserve Bank of India (RBI) has announced the final redemption price for the Sovereign Gold Bond (SGB) 2017-18 Series I, which was issued in June 2017. The bond is set to mature on June 19, 2022, and investors who purchased the bond will earn a whopping 221% return on their investment. The final redemption price has been fixed at ₹5,115 per gram, which is significantly higher than the issue price of ₹2,902 per gram.

The SGB scheme was launched by the Government of India in 2015 to reduce the demand for physical gold and to provide investors with a safe and secure way to invest in gold. The bonds are denominated in grams of gold and are issued by the RBI on behalf of the Government. The bonds have a tenure of 8 years, with an option to exit after 5 years.

The SGB 2017-18 Series I was the first series of the fiscal year 2017-18, and it was issued in June 2017. The issue price was ₹2,902 per gram, and the bond was available for subscription from June 12 to June 16, 2017. The bond has a face value of ₹2,000 per unit, and investors could purchase a minimum of 1 gram and a maximum of 4 kilograms of gold.

The final redemption price of ₹5,115 per gram is a significant increase from the issue price, and it translates to a return of 221% on the investment. For example, if an investor had purchased 1 gram of gold for ₹2,902, they will now receive ₹5,115, which is a gain of ₹2,213. This is a significant return on investment, especially considering that the bond has a relatively long tenure of 8 years.

The RBI has announced that the redemption price will be paid to investors on June 20, 2022, and it will be credited to their bank accounts. Investors who have purchased the bond can check the final redemption price and their returns on the RBI’s website. The SGB scheme has been a successful initiative, and it has helped to reduce the demand for physical gold and to provide investors with a safe and secure way to invest in gold. The scheme has also helped to mobilize gold savings and to provide a fillip to the government’s efforts to reduce the current account deficit.

The Reserve Bank of India (RBI) has announced the premature redemption price for the Sovereign Gold Bond (SGB) Scheme, Series I of 2020-21, at Rs 9,600 per unit. The redemption date is scheduled for April 28, 2025, marking the end of the five-year lock-in period for this series. SGBs offer investors an option to exit after completing five years from the date of issuance, although the overall maturity period is eight years.

The redemption price is calculated based on the average closing gold price of 999 purity over the preceding three business days. The RBI also announced premature redemption prices for two other SGB series, Series IV of 2017-18 and Series II of 2018-19, which became eligible for early redemption on April 23, 2025.

Sovereign Gold Bonds are a popular investment option for individuals looking to gain exposure to gold without the challenges of physical storage. The scheme provides an annual interest rate of 2.5% and potential capital growth tied to gold prices. SGBs have an eight-year term, with the option for investors to redeem them early starting from the fifth year. Early redemption is permitted only on particular interest payment dates, which occur twice a year.

Investors should note that if they miss the early redemption window, they will not lose their investment, and the bond will continue to accrue an annual fixed interest rate of 2.5% until it matures in eight years. They also have the option to sell the bonds in the secondary market at current market prices.

In terms of tax implications, the interest earned on SGBs is taxable under the Income-tax Act, 1961. However, if investors opt for premature redemption through the RBI’s designated window, the proceeds are fully exempt from Long Term Capital Gains (LTCG) tax. If they choose to sell SGBs in the secondary market, the gains will attract capital gains tax. Investors aiming to maximize tax efficiency should either redeem SGBs during the RBI’s premature exit window or hold them until the full maturity period of eight years.

To minimize tax liabilities, investors should choose the right exit option. They can either redeem their SGBs during the premature exit window or hold them until maturity. The maturity proceeds are not treated as a transfer under the capital gains provisions, making them entirely tax-exempt. By understanding the tax implications and choosing the right exit option, investors can make the most of their Sovereign Gold Bond investment.