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RBI’s Rate Cuts Make Home Buying More Affordable, Reveals Latest Report | Real Estate Updates
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.
Full calendar of 13 observed bank holidays
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.
Among PSU banks, Bank of Maharashtra, IOB, and Punjab & Sind are currently offering the most attractive fixed deposit rates.
For conservative investors seeking secure and attractive returns on fixed deposits (FDs), several public sector banks in India have recently revised their interest rates, making it an ideal time to invest. The Bank of Maharashtra is currently offering the highest interest rate among public sector banks, with 7.15% on 366-day deposits. Other notable banks with competitive interest rates include the Indian Overseas Bank, Punjab and Sind Bank, Bank of India, and Central Bank of India.
The Indian Overseas Bank offers 7.10% on 444-day FDs, while the Punjab and Sind Bank provides 7.05% interest on 444-day FDs. The Bank of India has introduced a special 999-day Green FD at 7%, and the Central Bank of India offers 7% on deposits ranging from two to three years. These rates are significantly higher than what was previously offered, making them an attractive option for risk-averse investors.
The recent revision in interest rates by public sector banks can be attributed to the Reserve Bank of India’s (RBI) decision to cut the repo rate. This has created a favorable environment for investors to lock in higher interest rates for the medium to long term. Fixed deposits remain a trusted investment tool due to their capital safety and guaranteed returns, making them an excellent option for those seeking a low-risk investment.
With interest rates ranging from 6.25% to 7.15%, investors can choose from a variety of tenure options, including one year, three years, and five years. The Central Bank of India also offers special FDs with tenures of 1111 days, 2222 days, and 3333 days, all of which offer a 7% interest rate. Overall, the revised interest rates offered by public sector banks provide an excellent opportunity for investors to earn attractive returns on their investments while minimizing risk.
Among public sector banks, Bank of Maharashtra, IOB, and Punjab & Sind are currently offering the most competitive fixed deposit rates.
For conservative investors seeking high returns on fixed deposits (FDs) from government banks, now is an excellent time to invest. Several public sector banks have recently revised their interest rates, offering attractive returns. The Bank of Maharashtra currently leads the pack, offering a 7.15% interest rate on 366-day deposits. For other tenures, the bank offers 6.25% for one year, 6.3% for three years, and 6.25% for five years.
Other public sector banks are also offering competitive interest rates. The Indian Overseas Bank offers 7.10% on 444-day FDs, while the Punjab and Sind Bank provides 7.05% interest on 444-day FDs. The Bank of India has introduced a special 999-day Green FD at 7%, with regular FD rates including 6.50% for one year, 6.25% for two years, and 6% for five years.
The Central Bank of India also offers 7% interest on deposits ranging from two to three years, as well as on special FDs of 1111 days, 2222 days, and 3333 days. For other terms, the bank provides 6.7% for one year, 6.75% for three years, and 6.50% for five years. Fixed deposits remain a trusted investment tool due to their capital safety and guaranteed returns.
The recent revision in interest rates by public sector banks is a result of the Reserve Bank of India’s (RBI) repo rate cut. This has created an ideal opportunity for risk-averse investors to lock in higher interest rates for the medium to long term. With the current interest rates, investors can secure attractive returns while minimizing their risk. It is essential for investors to compare the interest rates offered by different banks and choose the one that best suits their investment goals and tenure. By doing so, they can maximize their returns and make the most of their investment.
ICICI made a bid to take over HDFC, according to chairman Deepak Parekh
In a recent interview, former HDFC chairman Deepak Parekh revealed that Chanda Kochhar, the then ICICI Bank chief, had once proposed a merger between ICICI Bank and HDFC. This proposal was made before HDFC’s eventual reverse merger with its banking subsidiary, HDFC Bank, which was completed in July 2023. Parekh recalled that Kochhar had said, “ICICI started HDFC, why don’t you come back home?” However, Parekh declined the offer, stating that it would not be fair or proper to merge the two institutions.
Parekh attributed the eventual merger with HDFC Bank to regulatory pressure from the Reserve Bank of India (RBI). The RBI had classified non-banking financial companies (NBFCs) like HDFC as systemically important, and Parekh believed that the merger was necessary to comply with regulatory requirements. He noted that the RBI supported the merger and helped facilitate the process, but did not provide any concessions or relief.
Despite the challenges, Parekh believes that the merger was ultimately beneficial for the institution and the country. He stated that large banks are essential for India’s economic growth and that Indian banks must grow through acquisitions to become stronger in the future. Parekh also expressed his optimism about the potential for Indian banks to become larger and more competitive, citing the example of Chinese banks.
On broader economic concerns, Parekh identified persistent uncertainty in supply chains, trade policy, and export conditions as top CEO concerns. He also criticized the mis-selling of insurance products by banks, driven by high upfront commissions, and described insurance as the “least understood product”. Overall, Parekh’s comments provide insight into the complexities of India’s financial sector and the challenges faced by its leaders. His reflections on the merger and the state of the economy offer a unique perspective on the opportunities and challenges facing Indian businesses and policymakers.
According to RBI data, sales of privately-held non-financial companies listed on the stock exchange increased by 7.1% in the fourth quarter of the fiscal year 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.
IOB expands its presence with the inauguration of a new branch in Vizianagaram
The Indian Overseas Bank (IOB) has expanded its presence in Vizianagaram by opening a new branch in the Ring Road area. The branch was inaugurated by Ravi Kumar Gupta, Senior Regional Manager (SRM) of Visakhapatnam Region, on Wednesday. Speaking at the event, Gupta highlighted the competitive interest rates offered by IOB, including 7.35% for housing loans and 7.85% for vehicle loans, without any processing fees.
IOB is also providing various types of loans, such as MSME, education, retail, agriculture, and jewel loans, at attractive interest rates. Additionally, the bank is offering a 7.10% per annum interest rate on retail term deposits for 444 days to individuals below 60 years of age. Gupta emphasized that IOB is committed to providing excellent services to its customers and is continuously expanding its network to reach more people.
The Visakhapatnam Region of IOB currently has 72 branches and one RBI Currency Chest at Visakhapatnam. Gupta announced that new branches will be opening soon in Palasa, ALASA, Narasannapeta in Srikakulam district, and S Kota in Vizianagaram district, all of which are expected to be operational before July 31, 2025. The event was attended by several dignitaries, including Chief Manager D Srinivasa Rao, Ring Road Branch Manager Suresh Kondrothu, Vizianagaram Branch Manager Saurav Vishal, and AIOBEU Assistant General Secretary D Uma Maheswara Rao.
The opening of the new branch in Vizianagaram is a significant development for the region, as it will provide access to IOB’s range of financial services and products to the local community. With its competitive interest rates and wide range of loan options, IOB is well-positioned to meet the financial needs of individuals and businesses in the area. The expansion of IOB’s network in the region is expected to have a positive impact on the local economy, promoting growth and development in the area.
Following RBI’s rate cut, major banks slash savings account interest rates, with SBI plunging to 2.5% and HDFC, ICICI reducing to 2.75%.
Major banks in India, including State Bank of India (SBI), HDFC Bank, and ICICI Bank, have reduced their interest rates on savings accounts following a 50 basis point repo rate cut by the Reserve Bank of India (RBI) in June 2025. The cumulative rate cut for this year now stands at 1%. As a result, savings account holders will see reduced returns on their deposits. SBI, the country’s largest lender, has revised its savings account interest rate to a uniform 2.5% per annum for all balances, effective June 15, 2025. This is a decrease from the previous rates of 2.7% for balances below Rs 10 crore and 3% for balances of Rs 10 crore and above.
HDFC Bank and ICICI Bank have also followed suit, revising their interest rates to a flat 2.75% per annum, effective June 10, 2025, and June 12, 2025, respectively. Other banks, such as Bank of Baroda, Federal Bank, IndusInd Bank, and RBL Bank, have also updated their rates in response to the RBI’s monetary policy move. The revised rates range from 2.5% to 6.75%, depending on the bank and the account balance.
The rate revisions come as banks adjust deposit returns to align with the easing interest rate cycle, which has also triggered a cut in fixed deposit (FD) rates across tenures. The uniform lower rate structure will impact depositors across balance slabs, resulting in reduced returns on their savings. The move is expected to affect millions of savings account holders across the country, who will see a decrease in their interest earnings.
The reduction in interest rates is a result of the RBI’s efforts to stimulate economic growth by reducing borrowing costs. However, it may not be good news for depositors, who will see their savings earn lower returns. The revised rates will be effective from mid-June 2025, and depositors can expect to see the changes reflected in their account statements soon. Overall, the reduction in interest rates on savings accounts is a sign of the changing economic landscape in India, where banks are adjusting to the new monetary policy reality.
NBFCs tap into excess liquidity to boost lending – Latest Banking and Finance Updates
The business environment is expected to improve for non-banking financial companies (NBFCs) due to two recent developments: the Reserve Bank of India’s (RBI) 50 basis point rate cut and the easing of risk weight norms on unsecured lending. The RBI’s rate cut, which is its third reduction since February 2025, is expected to improve liquidity and boost bank funding to the sector. The central bank also slashed the cash reserve ratio (CRR) by 100 basis points, injecting Rs 2.5-lakh crore of durable liquidity into the system.
The easing of risk weight norms on unsecured lending is also expected to encourage banks to step up lending to NBFCs. In November 2023, the RBI had raised the risk weight on bank exposures to NBFCs by 25 percentage points to 125%, tightening credit and slowing fund flows to the sector. However, in February 2025, the central bank reversed this decision, restoring the original risk weight of 100% effective April 1.
Industry experts expect the liquidity surge and the easing of risk weights to result in more funds being available for NBFCs, particularly for retail lending. Parag Sharma, MD and CFO of Shriram Finance, said that the excess liquidity will lead to more lending by banks, resulting in more funds for NBFCs. Ashish Mehrotra, MD & CEO of Northern Arc Capital, noted that the RBI’s recent commentary suggests a moderation in stress levels within unsecured lending, which should further catalyse bank participation in well-structured NBFC-originated pools.
The rollback of additional risk weights and the RBI’s softer stance on unsecured retail loans and credit card outstandings are expected to aid lending to well-managed NBFCs. Several banks have already cut lending rates in response to the RBI’s 50 bps repo rate cut, which is expected to result in lower interest costs for borrowings. The full impact of the rate cut is expected to be visible in the coming quarters.
Overall, the developments are expected to improve the business environment for NBFCs, with more funds available for lending and lower interest costs. The transmission of lower rates is expected to happen faster for mid-sized NBFCs due to higher capital market-linked borrowings. Northern Arc Capital’s MD & CEO expects the net interest margins (NIMs) to likely rise by 70-80 bps in the near term due to the structure of their asset-liability franchise.
RBI Conducts Successful Switch Auction, Accepts Bids Valuing Rs 9,296 Crore
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.
RBI’s STRIPS facility: What does it mean for the bond market and insurance companies’ investment strategies?
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.
HDFC Brings Cheer to Millions of Home Loan Borrowers as Reduced Interest Rates Set to Benefit the Average Consumer
HDFC Bank has announced a 0.50% interest rate cut on home loans, effective from the next interest rate reset date, following the Reserve Bank of India’s (RBI) reduction of the repo rate on June 6, 2025. This rate cut will be automatically applied to all home loan customers, and they will not need to submit a separate application to avail of the benefit. The reduced interest rate will result in lower Equated Monthly Installments (EMIs) for customers, providing them with much-needed relief.
To check the reset date, customers can visit the HDFC Bank website, log in to their online account, or use the mobile app to view their loan details. If customers have any questions or concerns, they can contact HDFC Bank for assistance. This move is expected to benefit lakhs of people who have been waiting for home loan rates to decrease.
The RBI’s decision to reduce the repo rate has paved the way for banks to lower their loan interest rates, making loans more affordable for customers. Other banks may also follow suit and reduce their loan interest rates, making the overall loan market more competitive. HDFC Bank’s automatic interest rate cut will ensure that customers can enjoy the benefits of lower interest rates without having to take any additional steps.
The interest rate cut will come as a welcome relief to home loan customers who have been grappling with high interest rates. With the reduced interest rate, customers can expect to save on their EMI payments, which will help them manage their finances more effectively. HDFC Bank’s decision to pass on the benefits of the RBI’s repo rate cut to its customers is a positive move that will help stimulate the housing market and support the overall economy.
Home Loan Comparison: Public or Private Banks – Who Offers the Best Deals After RBI’s 50 bps Repo Rate Cut?
The Reserve Bank of India’s (RBI) recent 50 basis points (bps) repo rate cut has led to a significant reduction in home loan interest rates. Both public and private banks have reduced their lending rates, making it an attractive time for homebuyers to avail of loans. The question on everyone’s mind is: which type of bank offers the cheapest home loans now?
Public sector banks, such as State Bank of India (SBI), Bank of Baroda, and Punjab National Bank, have reduced their home loan interest rates to 7.90-8.40% per annum. SBI, the largest lender in the country, is offering home loans at 7.90% per annum, while Bank of Baroda is offering loans at 8.00% per annum. These rates are applicable for loans up to ₹30 lakh.
Private sector banks, such as HDFC Bank, ICICI Bank, and Axis Bank, have also reduced their home loan interest rates. HDFC Bank is offering home loans at 8.00-8.30% per annum, while ICICI Bank is offering loans at 8.05-8.35% per annum. Axis Bank is offering home loans at 8.10-8.40% per annum. These rates are also applicable for loans up to ₹30 lakh.
After the RBI’s repo rate cut, some banks have also introduced special schemes to attract homebuyers. For example, SBI is offering a 0.10% concession on home loan interest rates for borrowers with a good credit score. Similarly, HDFC Bank is offering a 0.10% concession on home loan interest rates for borrowers who opt for a floating-rate loan.
In terms of the cheapest home loan option, public sector banks seem to be offering more competitive rates. SBI’s home loan rate of 7.90% per annum is the lowest among all banks, followed by Bank of Baroda’s rate of 8.00% per annum. However, private sector banks are offering more flexible repayment options and concessions on interest rates, which may make their loans more attractive to some borrowers.
Overall, the current home loan market is highly competitive, with both public and private sector banks offering attractive interest rates and schemes. Homebuyers should carefully evaluate their options and choose a loan that best suits their needs and financial situation. With the RBI’s repo rate cut, home loan interest rates are likely to remain low for some time, making it a good time to buy a home.
Equitas Small Finance Bank’s Board to Mull Raising Additional Funds – MSN
The Board of Equitas Small Finance Bank is set to consider raising additional capital to support its growth plans and meet regulatory requirements. The bank, which commenced operations in 2017, has been expanding its presence in the small finance banking space, focusing on serving the unbanked and underbanked populations in India.
As part of its efforts to strengthen its capital base, the bank’s Board will discuss and consider various options for raising capital, including a potential initial public offering (IPO), preferential allotment, or a rights issue. The decision to raise additional capital is driven by the bank’s accelerating growth trajectory, which has resulted in a significant increase in its loan book and deposits.
Equitas Small Finance Bank has been witnessing rapid growth in its operations, with its loan book increasing by over 50% year-on-year. The bank’s deposits have also been growing at a fast pace, driven by its expanding branch network and digital banking channels. To sustain this growth momentum, the bank requires additional capital to meet the regulatory capital requirements and to support its business expansion plans.
The bank’s management believes that raising additional capital will enable it to maintain its growth trajectory, while also ensuring that it meets the regulatory requirements. The bank is required to maintain a minimum capital adequacy ratio of 15%, as prescribed by the Reserve Bank of India (RBI). By raising additional capital, the bank will be able to maintain a buffer over the regulatory requirement, providing it with the necessary headroom to pursue its growth plans.
The proposed capital raise is also expected to support the bank’s plans to expand its presence in new geographies, enhance its digital banking capabilities, and introduce new products and services. The bank has been investing heavily in technology to improve its operational efficiency and to enhance customer experience. The additional capital raised will enable the bank to accelerate its digital transformation journey and to stay ahead of the competition.
Overall, the proposed capital raise by Equitas Small Finance Bank is a strategic move to support its growth plans and to ensure that it remains well-capitalized to meet the regulatory requirements. The bank’s management is confident that the additional capital will enable it to sustain its growth momentum and to achieve its long-term objectives.
In a significant move, the RBI has amended its rules, which will now result in substantial charges for bank customers under certain circumstances.
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.
TMB strengthens its leadership with the appointment of a new additional director
The Tamilnadu Mercantile Bank Ltd has announced the appointment of K Ramachandran as an additional Non-Executive Independent Director and part-time Chairman of the bank. This appointment has been approved by the Board of Directors and is subject to approval from the Reserve Bank of India (RBI). Ramachandran will take on the role effective from the date of RBI approval, and his tenure will last for three years, until June 11, 2028.
K Ramachandran brings with him over 30 years of experience in the banking sector, having held key positions in prominent banks. Notably, he has served as the Executive Director at Indian Bank and Allahabad Bank. His expertise and leadership played a crucial role in the successful merger of Allahabad Bank and Indian Bank. This experience will undoubtedly be valuable in his new role at Tamilnadu Mercantile Bank, as he navigates the bank through the evolving banking landscape.
The appointment of Ramachandran as part-time Chairman is expected to bring stability and strategic guidance to the bank. His independent perspective, combined with his extensive banking knowledge, will enable him to provide effective oversight and direction to the bank’s management. As a seasoned banker, Ramachandran is well-equipped to address the challenges and opportunities facing the bank, and his leadership is anticipated to contribute to the bank’s growth and success.
The Tamilnadu Mercantile Bank Ltd, with its rich history and strong presence in the region, is poised for further growth and expansion under Ramachandran’s guidance. The bank’s Board of Directors has expressed confidence in Ramachandran’s ability to lead the bank forward, and his appointment is seen as a significant step towards achieving the bank’s strategic objectives. With his proven track record and expertise, K Ramachandran is well-positioned to make a positive impact at Tamilnadu Mercantile Bank and drive the bank’s continued success.
Bank of Maharashtra slashes interest rates on retail loans by as much as 0.5 percentage points
The Bank of Maharashtra, a state-owned bank, has announced a reduction in interest rates on various retail loans, including home, car, education, and other loans that are linked to the Repo Linked Lending Rate (RLLR). This move is in line with the Reserve Bank of India’s (RBI) efforts to moderate interest rates. The new interest rates will be effective from June 10.
The reduction in interest rates is up to 50 basis points, which is a significant decrease. This means that borrowers who have taken loans from the Bank of Maharashtra will now have to pay lower interest rates on their loans. The reduction in interest rates is expected to make borrowing cheaper and more affordable for individuals and families.
The Bank of Maharashtra’s decision to reduce interest rates is a response to the RBI’s recent monetary policy decisions. The RBI has been taking steps to moderate interest rates and stimulate economic growth. By reducing interest rates, the Bank of Maharashtra is passing on the benefits of the RBI’s rate cuts to its customers.
The reduction in interest rates will apply to all retail loans that are linked to the RLLR. This includes home loans, car loans, education loans, and other personal loans. Borrowers who have existing loans with the Bank of Maharashtra will also benefit from the reduced interest rates.
The new interest rates will be effective from June 10, which means that borrowers will start paying lower interest rates from that date. The reduction in interest rates is expected to provide relief to borrowers who are struggling to pay high interest rates on their loans.
Overall, the Bank of Maharashtra’s decision to reduce interest rates on retail loans is a positive move that will benefit borrowers and stimulate economic growth. The reduction in interest rates is in line with the RBI’s efforts to moderate interest rates and make borrowing cheaper and more affordable. With the new interest rates effective from June 10, borrowers can expect to pay lower interest rates on their loans and enjoy cheaper credit.
IOB slashes lending rate linked to repo by 50 basis points, bringing it down to 8.35%
The Indian Overseas Bank (IOB) has announced a significant reduction in its Repo Linked Lending Rate (RLLR) following a meeting of its Asset Liability Management Committee (ALCO) on Wednesday. The RLLR has been cut by 50 basis points, from 8.85% to 8.35%. This change is set to take effect on June 12, 2025.
The decision to reduce the RLLR was made in response to the Reserve Bank of India’s (RBI) latest Monetary Policy Committee (MPC) meeting, in which the Repo Rate was also reduced by 50 basis points. The Repo Rate is the rate at which the RBI lends money to commercial banks, and a reduction in this rate typically leads to a decrease in lending rates for banks.
The reduction in RLLR by IOB is expected to have a positive impact on borrowers, as it will result in lower interest rates on loans. This could lead to an increase in borrowing and spending, which could in turn boost economic growth. The move is also likely to make IOB’s loans more competitive in the market, which could help the bank to attract more customers.
The reduction in RLLR is a significant development, as it indicates that IOB is committed to passing on the benefits of the RBI’s monetary policy decisions to its customers. The bank’s decision to reduce its lending rates is also in line with the RBI’s efforts to boost economic growth and increase lending in the country.
Overall, the reduction in RLLR by IOB is a positive development for borrowers and the economy as a whole. It is likely to lead to an increase in borrowing and spending, which could help to boost economic growth. The move is also a testament to IOB’s commitment to providing competitive and affordable loan products to its customers. With the new RLLR taking effect on June 12, 2025, borrowers can look forward to enjoying lower interest rates on their loans.
PNB MD Ashok Chandra expects pressure on Net Interest Margin (NIM) to subside starting from the third quarter
Ashok Chandra, the Managing Director and CEO of Punjab National Bank (PNB), believes that the pressure on the bank’s Net Interest Margin (NIM) will ease in the third quarter of the current financial year. This is due to the reduction in policy rates by the Reserve Bank of India (RBI), which is expected to lead to a decrease in the cost of funds. Chandra predicts that the NIM will hover around 2.8-2.9% in the current financial year, with a target of 2.93% for FY25.
The RBI’s recent repo rate cut of 50 basis points is expected to lead to a reduction in deposit rates, which will help to decrease the cost of funds for banks. PNB will review its deposit rates in the upcoming Asset-Liability Committee (ALCO) meeting to determine the impact of the repo rate cut on liquidity in the market. Additionally, the 100-bps cut in the Cash Reserve Ratio (CRR) by the RBI will provide PNB with approximately ₹15,000 crore, which can be used to expand lending.
PNB is also focusing on lending to the retail, agriculture, and MSME (RAM) sectors, with a growth target of increasing RAM lending from 53% of the loan book in FY25 to 58% in the current financial year. The bank has been taking measures to increase RAM lending through outreach programs, including a digital lending facility for MSMEs. In FY26, PNB’s lending to the RAM sector was around ₹6 lakh crore, accounting for approximately 56% of the loan book.
Chandra is optimistic about corporate credit offtake in the current financial year, citing the decline in lending rates. Last year, the bank sanctioned ₹1.35 lakh crore for corporates, with renewable energy, power, steel, and infrastructure sectors seeing higher traction. Overall, PNB is well-positioned to take advantage of the favorable market conditions and is expected to see an improvement in its financial performance in the coming quarters. With its focus on RAM lending and corporate credit, the bank is poised to achieve its growth targets and maintain its position as a leading player in the Indian banking sector.
Ten banks, including SBI and Bank of Baroda, witnessed a drop in non-performing assets (NPAs) in Q4, sparking revival hopes
The Q4 FY25 results season has come to a close, and an analysis by Trendlyne has revealed that 10 banks from the Nifty500 index have reported a decline in their non-performing assets (NPAs) for the quarter ending March 2025. These banks include some of the major players in the Indian banking sector, such as State Bank of India (SBI), Bank of Baroda, Canara Bank, and AU Small Finance Bank.
A decline in NPAs is a positive sign for banks, as it indicates a reduction in the amount of loans that are not being repaid. This can lead to a decrease in provisions for bad debts and an improvement in the overall asset quality of the bank. The reduction in NPAs can also free up capital for banks to lend more, which can help stimulate economic growth.
The improvement in NPAs is a result of the efforts made by banks to recover dues and reduce their exposure to stressed assets. The Indian government and the Reserve Bank of India (RBI) have also taken various measures to help banks tackle the NPA problem, such as the introduction of the Insolvency and Bankruptcy Code (IBC) and the setting up of the National Company Law Tribunal (NCLT).
The decline in NPAs is a significant development, as it indicates that the Indian banking sector is gradually recovering from the NPA crisis that had affected it in the past. The reduction in NPAs can also lead to an improvement in the profitability of banks, as they will have to make lower provisions for bad debts.
The 10 banks that reported a decline in NPAs are:
1. State Bank of India (SBI)
2. Bank of Baroda
3. Canara Bank
4. AU Small Finance Bank
The other 6 banks are also major players in the Indian banking sector. The decline in NPAs is a positive sign for the Indian banking sector, and it is expected that this trend will continue in the coming quarters. The improvement in NPAs is a result of the efforts made by banks to recover dues and reduce their exposure to stressed assets.
The reduction in NPAs can also lead to an improvement in the credit growth of banks, as they will have more capital to lend. This can help stimulate economic growth and lead to an improvement in the overall financial health of the country. Overall, the decline in NPAs is a significant development, and it is expected that the Indian banking sector will continue to recover from the NPA crisis in the coming quarters.
Following RBI’s rate cut, Bank of Baroda and HDFC Bank have lowered their lending rates, with reductions of up to 50 basis points and 10 basis points, respectively.
The State-owned Bank of Baroda (BoB) has announced a reduction in its benchmark lending rate, linked to the repo rate, by 50 basis points. This move is in line with the Reserve Bank of India’s (RBI) recent rate cut. The bank’s Repo Linked Lending Rate (RLLR) now stands at 8.15%, effective from June 7. This reduction will benefit borrowers whose loans are linked to this benchmark.
Additionally, private sector HDFC Bank has also reduced its Marginal Cost of Funds-based Lending Rates (MCLR) by 10 basis points across all tenures, effective from June 7. The new MCLR rates range from 8.90% for overnight and one-month rates to 9.10% for two-year and three-year tenure lending rates.
The RBI’s rate cut was announced on Friday, where the monetary policy committee voted to lower the benchmark repurchase or repo rate by 50 basis points to 5.5%. The cash reserve ratio for banks was also reduced by 100 basis points to 3%, making available an additional ₹2.5 lakh crore to the banking system.
This is the third interest rate cut by the RBI in 2025, with a total reduction of 100 basis points. The previous cuts were made in February and April, with each reduction being 25 basis points. The RBI’s move is aimed at boosting the economy by making more money available for lending.
The reduction in lending rates by BoB and HDFC Bank is expected to benefit borrowers, particularly those with loans linked to the repo rate or MCLR. With the decrease in lending rates, borrowers can expect to pay lower interest rates on their loans, which can help reduce their debt burden. The move is also expected to increase credit demand and boost economic growth. Overall, the reduction in lending rates by banks is a positive development for the economy and borrowers alike.
RBI’s rate cut leads to drop in home loan rates, bringing greater relief to existing borrowers
Following the Reserve Bank of India’s (RBI) decision to cut the repo rate by 50 basis points, several major public sector banks have reduced their lending rates. The move aims to stimulate credit growth and support economic activity amid ongoing challenges. Bank of Baroda, Punjab National Bank, Bank of India, and UCO Bank have all reduced their repo-linked lending rates (RLLR) by 50 basis points, with effective dates ranging from June 6 to June 9, 2025. These reductions bring their RLLR rates down to between 8.15% and 8.35%.
In addition to the public sector banks, private sector lender HDFC Bank has also reduced its Marginal Cost of Funds based Lending Rate (MCLR) by 10 basis points across various tenures, effective June 7, 2025. This adjustment brings down the overnight and one-month MCLR rates to 8.9%. The RBI’s repo rate cut directly impacts floating-rate loans, which must be reset in line with the benchmark repo rate as per RBI regulations. Existing borrowers with floating-rate loans will automatically benefit from lower interest rates.
However, new borrowers may not receive the full benefit of the rate cut, as banks are expected to modify the spreads they charge over the repo rate to maintain profitability. For example, Bank of Baroda’s home loan rates for new borrowers now start at 8%, which is higher than the rates offered by some public sector banks prior to the RBI rate cut. Several public sector banks, including Bank of India, Bank of Maharashtra, and Union Bank of India, were offering home loans at rates as low as 7.85% for loans up to Rs 30 lakh.
The rate cuts are expected to make borrowing cheaper for consumers and businesses, which could help stimulate economic growth. However, to preserve profitability, lenders are also expected to reduce returns on fixed deposits (FDs), making them less attractive to savers in the near term. The RBI’s repo rate reduction and the subsequent adjustments by banks reflect ongoing efforts to balance credit availability, profitability, and competitive pressures in the Indian banking sector.
Overall, the rate cuts are a positive development for borrowers, but may have a negative impact on savers. The Indian banking sector is expected to continue to evolve in response to the RBI’s monetary policy decisions, with lenders adjusting their rates and products to maintain profitability and competitiveness. The ultimate goal of the rate cuts is to spur economic growth by making borrowing cheaper, which could have a positive impact on the broader economy.
UCO Bank Slashes Lending Rates: MCLR Reduced Across All Loan Tenures, Effective June 10, Making Borrowing More Affordable
UCO Bank, a major public sector bank in India, has announced a 0.10% reduction in its Marginal Cost of Funds-Based Lending Rate (MCLR) across all tenures, effective June 10, 2025. This move follows the Reserve Bank of India’s (RBI) decision to cut the repo rate by 50 basis points, bringing the total reduction to 75 basis points since the RBI’s previous three consecutive cuts. As a result, the repo rate has decreased from 6% to 5.50%. This reduction in MCLR by UCO Bank is expected to make various types of loans, such as home loans, car loans, and personal loans, more affordable for customers.
The MCLR rates for different periods have been reduced as follows: overnight MCLR has decreased from 8.25% to 8.15%, one-month MCLR has decreased from 8.45% to 8.35%, three-month MCLR has decreased from 8.60% to 8.50%, six-month MCLR has decreased from 8.90% to 8.80%, and one-year MCLR has decreased from 9.10% to 9.00%. The one-year MCLR is particularly significant, as most retail loans, including home loans, are linked to this rate.
MCLR, or Marginal Cost of Funds-Based Lending Rate, is the minimum rate below which a bank is not allowed to lend. It was introduced by the RBI on April 1, 2016, to bring transparency to lending rates and ensure that the benefits of policy rate changes are passed on to customers quickly. MCLR is based on a bank’s internal costs, including the cost of funds, cash reserve ratio, operating costs, and tenor premium. When the RBI cuts the repo rate, it becomes cheaper for banks to raise funds, allowing them to reduce their MCLR rates and pass on the benefits to customers.
The reduction in MCLR by UCO Bank is expected to have a ripple effect on the entire banking sector, with other public and private sector banks likely to follow suit and announce similar cuts in their MCLR rates. This, in turn, will make loans cheaper across the country and boost the economy. The continuous reduction in repo rate by the RBI is expected to have a positive impact on the economy, making borrowing more affordable for individuals and businesses. Overall, the reduction in MCLR by UCO Bank is a welcome move for customers, and it is expected to have a positive impact on the banking sector and the economy as a whole.
The Agri and All Trade Chamber applauds the RBI’s move to slash the repo rate and cash reserve ratio.
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.
Major lenders, including Bank of Baroda, UCO Bank, Punjab National Bank, and Bank of India, have slashed their lending rates.
UCO Bank has announced a reduction in its marginal cost of fund-based lending rate (MCLR) by 10 basis points across all tenures, following the Reserve Bank of India’s (RBI) decision to cut the repo rate. The reduced MCLR rates will come into effect from June 10. The MCLR is a crucial benchmark rate that determines the interest rates for loans such as home loans, personal loans, and some business loans.
As per the revised rates, the overnight MCLR has been decreased from 8.25% to 8.15%, while the one-month MCLR has been lowered from 8.45% to 8.35%. The three-month MCLR has seen a cut from 8.6% to 8.5%, and the six-month MCLR from 8.9% to 8.8%. The one-year MCLR has been reduced from 9.1% to 9%. These reductions in MCLR rates are expected to make loans linked to this benchmark cheaper for customers.
In addition to the MCLR revisions, UCO Bank has also reduced its treasury bill-linked rates. Effective from June 9, the rates for three months, six months, and 12 months have been lowered to a uniform 5.8%, down from the previous rates of 6% or 6.05%. These changes are aimed at providing relief to borrowers and stimulating economic growth.
The reduction in MCLR rates by UCO Bank is a positive development for customers who have taken loans linked to this benchmark. With the decreased interest rates, borrowers can expect to save on their loan repayments. The move is also expected to boost credit growth and support the overall economy. The RBI’s decision to cut the repo rate has prompted several banks to review their lending rates, and UCO Bank’s reduction in MCLR rates is a step in this direction. Overall, the revisions in MCLR rates and treasury bill-linked rates are likely to benefit borrowers and contribute to the country’s economic growth.
Interest rate reduction phase likely at an end, with future decisions to be guided by economic data: Union Bank of India
The Reserve Bank of India’s (RBI) recent policy actions, as reported by Union Bank of India, suggest that the current interest rate cutting cycle has come to an end. The terminal repo rate is expected to settle at 5.50%, assuming a real interest rate of 150 basis points and an inflation forecast of 4% for the financial year 2025-26. This “stealth easing” by the RBI, which includes cutting policy rates and easing liquidity conditions, aims to support credit growth and aid the economy.
However, the report notes that the impact of these measures will take time to reflect in the real economy, and a recovery in credit demand may take 2-3 quarters or even longer. The global environment and uncertainties in investment sentiment and capital expenditure plans may also affect the timing of this recovery. The 100 basis point cut in the Cash Reserve Ratio (CRR), to be implemented in four tranches, is expected to play a key role in improving the transmission of monetary policy.
The CRR cut is expected to improve the money multiplier effect, reduce the cost of funds for banks, and support a rise in net interest margins (NIMs). According to RBI Governor Sanjay Malhotra, the CRR cut could boost banking system NIMs by around 7 basis points, helping banks absorb some of the pressure caused by the 50 basis point repo rate cut. This, in turn, will lead to faster repricing of loans linked to external benchmarks.
The report concludes that the frontloaded rate easing, combined with liquidity support measures, will aid growth, although their full effect will be visible only with a time lag. Future policy actions will be data-dependent, taking into account factors such as inflation trends, global geopolitical uncertainties, and the US Federal Reserve’s interest rate trajectory. The Monetary Policy Committee (MPC) will assess these factors before deciding on any further rate cuts. Overall, the RBI’s policy actions are expected to support the economy, but the timing and extent of the impact will depend on various factors.
If SBI reduces interest rates by 25 basis points following the RBI’s repo rate cut, how will it impact the maturity amount for 1-10 year fixed deposits, and what do the current rates look like compared to the estimated new rates?
The Reserve Bank of India (RBI) made a surprise announcement on June 6, as Governor Sanjay Malhotra revealed the Monetary Policy Committee’s (MPC) decision to reduce the repo rate by 50 basis points (bps) to 5.5%. This move is expected to provide relief to loan borrowers across the country. Along with the rate cut, the MPC also changed its policy stance from “accommodative” to “neutral”, indicating a shift in the central bank’s approach to monetary policy.
The reduction in the repo rate will lead to a decrease in the cost of borrowing for commercial banks, which is expected to be passed on to consumers in the form of lower interest rates on loans. However, the RBI Governor emphasized the need for banks to speed up the transmission of these rate cuts to borrowers. Currently, it takes banks around 6-9 months to pass on the benefits of rate cuts to customers, which the Governor feels is too slow.
In addition to the repo rate cut, the RBI also announced a change in the cash reserve ratio (CRR) by 1 percentage point. The CRR is the proportion of deposits that commercial banks are required to hold with the RBI, rather than lending out to customers. By reducing the CRR, the RBI is aiming to increase the amount of liquidity in the banking system, which should also contribute to lower interest rates and increased borrowing.
The RBI’s decision to cut the repo rate and change its policy stance is seen as a positive move for the economy, as it is expected to boost borrowing and spending. With the reduction in interest rates, borrowers can expect to pay less on their loans, which should increase demand for credit and stimulate economic growth. The RBI’s emphasis on faster rate transmission also highlights the need for commercial banks to respond quickly to changes in monetary policy, in order to ensure that the benefits of rate cuts are passed on to customers in a timely manner. Overall, the RBI’s announcement is a welcome move for loan borrowers and is expected to have a positive impact on the economy.
June 6 Bank Holiday: Will Indian banks operate or remain shut tomorrow? Latest updates here
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.
May’s retail inflation expected to plummet to a 6-year low of 3%, driven by a decline in food prices, according to a report by UBI.
India’s retail inflation, measured by the Consumer Price Index (CPI), is expected to moderate to 3.0% in May, a six-year low. This decline is attributed to a decrease in prices of cereals, pulses, and other food items, despite a strengthening of other segments. The CPI inflation rate fell to 3.16% in April from 3.34% in March, according to data released by the Ministry of Statistics and Programme Implementation. Core inflation, which excludes volatile food and energy prices, slightly increased to 4.18% due to a low base from last year. However, weak demand and stable commodity prices are expected to keep core inflation under control.
The report from Union Bank of India (UBI) highlights that inflation, excluding vegetables, remained steady at 4.11%, while inflation excluding gold is expected to stay low at 3.4%. The decline in overall inflation is a result of decreased prices of vegetables, pulses, fruits, meat and fish, personal care and effects, and cereals and products. The current inflation rate is within the Reserve Bank of India’s (RBI) manageable range of 2-6%. The RBI has expressed confidence that inflation will remain under control in the financial year 2025-26, following its April monetary policy review meeting.
The moderation in inflation is a positive sign for the Indian economy, as it brings retail inflation closer to the RBI’s target of 4%. Food prices, which were a concern for policymakers, have declined, contributing to the overall decrease in inflation. The stable inflation rate is expected to continue, with the RBI’s upper tolerance level of 6% not having been breached since October 2024. The current economic indicators suggest that India’s inflation is under control, giving confidence to economists and analysts. Overall, the decline in retail inflation is a positive development, indicating a stable and manageable economic environment.
India’s 10-year bond yield is expected to decline even further if the RBI implements a rate cut of over 25 basis points, according to a report by Bank of Baroda, as reported by ANI News.
According to a report by Bank of Baroda, India’s 10-year bond yield may decline further if the Reserve Bank of India (RBI) decides to cut interest rates by more than 25 basis points (bps). The report suggests that a rate cut of more than 25 bps would lead to a decrease in bond yields, as investors would become more optimistic about the economy and the RBI’s stance on monetary policy.
The 10-year bond yield is a key indicator of the country’s long-term interest rates and is closely watched by investors and policymakers. A decrease in bond yields would make borrowing cheaper for the government and corporations, which could boost economic growth. The report notes that the RBI has been facing pressure to cut interest rates to stimulate economic growth, which has been slowing down in recent quarters.
The Bank of Baroda report highlights that the RBI’s rate-setting panel, the Monetary Policy Committee (MPC), is scheduled to meet in the coming days to decide on the interest rate. The report states that a rate cut of 25 bps is already priced in, but a cut of more than 25 bps would be a surprise and would lead to a further decline in bond yields.
The report also notes that the RBI has been using various tools to manage liquidity and support economic growth, including open market operations and reverse repo auctions. The report suggests that the RBI may continue to use these tools to manage liquidity and keep interest rates low, which would support the decline in bond yields.
In recent months, the Indian economy has been facing several challenges, including a slowdown in consumption and investment, and a decline in exports. The report notes that the RBI’s rate cuts and other measures have helped! to stabilize the economy, but more needs to be done to boost growth.
The report concludes that a rate cut of more than 25 bps by the RBI would be a positive surprise for bond markets and would lead to a decline in bond yields. This would make borrowing cheaper for the government and corporations, which could boost economic growth. However, the report also notes that the RBI’s decision would depend on various factors, including inflation, growth, and global economic trends.
Overall, the Bank of Baroda report suggests that the RBI’s interest rate decision would be a key driver of bond yields in the coming days, and a rate cut of more than 25 bps would lead to a decline in bond yields and boost economic growth. Investors and policymakers would closely watch the RBI’s decision, as it would have significant implications for the Indian economy and financial markets.
Analysts Predict 25-Basis-Point Rate Cut by RBI’s MPC on June 6 as Inflation Shows Signs of Easing
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is set to meet later this week, and analysts expect the Central Bank to cut the repo rate by 25 basis points (bps) for the third consecutive time. This move is anticipated due to inflation remaining below the median target of 4%. The RBI has already cut the repo rate by 50 bps until April this year, and it is projected to cut it by another 50 bps in the current fiscal year (FY26).
According to a Crisil note, bank lending rates have started to ease, which should support domestic demand. The note also predicts that improving domestic consumption will support industrial activity, driven by healthy agricultural growth, easing inflation, and income tax relief. Madan Sabnavis, Chief Economist at Bank of Baroda, agrees that the MPC will likely cut the repo rate by 25 bps due to benign inflation conditions and comfortable liquidity.
The RBI’s commentary on growth and inflation will be closely watched, as there are expectations of revisions in their forecasts. The Central Bank will also detail its analysis on how the global environment will affect the Indian economy, particularly with the tariff reprieve provided by the US set to end in July. The RBI has stated that it will continue to manage liquidity in sync with its monetary policy stance to keep system liquidity adequate.
In its 2024-25 annual report, the RBI noted that a benign inflation outlook and moderate growth warrant a growth-supportive monetary policy while remaining watchful of global macroeconomic conditions. The MPC’s April meeting saw a unanimous decision to reduce the policy repo rate by 25 bps to 6.0%, and the stance was changed from neutral to accommodative. Overall, analysts expect the RBI to maintain a dovish stance and support economic growth through monetary policy easing.
EMI Reprieve for Millions: RBI Cracks Down on Excessive Fees with New Regulations
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:
- No penal interest: Lenders cannot levy additional interest as a penalty for EMI delays.
- Only penal charge allowed: A fixed penal charge can be imposed, but it must not be added to the principal loan amount.
- No interest on penal charges: Financial institutions cannot charge extra interest on the penal charge itself.
- 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.
Widens Scope for Removal of Government Securities
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.
India’s net financial savings expected to reach ₹22 lakh crore by FY25, according to SBI research
According to a recent economic research report by the State Bank of India (SBI), the net financial savings of the household sector in India is expected to reach ₹22 lakh crore, or 6.5% of the Gross National Disposable Income (GNDI), in the financial year 2024-25. This represents a significant increase from the previous fiscal year, where the net financial savings stood at 5.1% of GNDI. The growing capital pool is crucial for funding government and corporate deficits, as well as supporting macroeconomic stability.
The report highlights the importance of the Reserve Bank of India’s (RBI) efforts to contain the volatility of the Rupee, which has been a major factor in determining its surplus. During the fiscal year 2024-25, the RBI’s balance sheet expanded by 8.19%, which is less than the nominal GDP growth of 9.9%. As a result, the RBI has transferred a surplus of ₹2.69 lakh crore to the government, which is expected to enhance the fiscal space.
However, the report also notes that while the incidence of fraud cases has declined, the defraud amount has tripled to ₹36,014 crore. On the other hand, the volume of card and internet fraud has decreased significantly, from 29,802 in 2023-24 to 13,516 in 2024-25. This suggests that while the overall number of fraud cases may be decreasing, the amount of money being defrauded is increasing.
Overall, the report suggests that India’s financial system is at a crossroads, and is both resilient and transformative. The growing capital pool and increasing financial savings are positive signs, but the increasing defraud amount and volatility of the Rupee are areas of concern. The report highlights the importance of continued efforts to support macroeconomic stability and contain the volatility of the Rupee. With the RBI’s surplus transfer to the government, the fiscal space is expected to be enhanced, which could have a positive impact on the economy.
Evolution of Co-Lending Models in India: A New Era of CollaborationThis version maintains the core idea of the original line, but phrases it in a way that emphasizes the idea of change and progression in the co-lending landscape in India.
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.
Breaking: Counterfeit currency discovered at Agra’s Canara Bank, traced back to RBI; investigation underway #AgraNews #Agraleaks
A shocking incident of counterfeit currency has been reported in Agra, Uttar Pradesh. Fake notes were detected at a branch of Canara Bank in the city, and what’s even more alarming is that these notes had reached the Reserve Bank of India (RBI) before being identified as counterfeit.
According to sources, the fake notes were deposited into the Canara Bank branch by an unidentified individual. The bank staff, however, failed to detect the counterfeit currency and went ahead with the usual procedure of sending the deposited amount to the RBI for verification.
It was only when the RBI scrutinized the notes that the discrepancy was discovered. Upon detecting the fake notes, the RBI immediately alerted the Canara Bank branch in Agra, following which an investigation was launched.
A case has been registered with the local police, and authorities are trying to track down the person who deposited the counterfeit currency. The police are also questioning bank employees to determine if there was any negligence or complicity involved.
This incident raises serious concerns about the security and vigilance measures in place at banks. If fake notes could reach the RBI undetected, it highlights the vulnerability of the banking system to counterfeit currency. The RBI has strict guidelines in place for detecting and reporting fake currency, but this incident shows that these protocols may not be foolproof.
The Canara Bank branch in question has assured that it is cooperating fully with the investigation and is taking measures to prevent such incidents in the future. The bank has also ordered an internal inquiry to identify any lapses in its processes and to fix accountability.
In the meantime, the Agra police are working to identify the source of the fake notes and the person who deposited them. The incident has once again highlighted the need for banks and financial institutions to be vigilant and to have robust systems in place to detect counterfeit currency.
The incident has left many in Agra and the banking community at large shocked, highlighting the need for increased security measures to safeguard the integrity of the financial system. As the investigation unfolds, it will be crucial to determine if there was any larger conspiracy or if this was an isolated incident. For now, the people of Agra and the banking community are left to ponder the implications of this shocking discovery.
IIFL Finance receives green light from RBI to establish branches in Jammu & Kashmir
IIFL Finance, a non-banking financial company (NBFC), has received regulatory approvals to open branches and expand its credit services in the Union Territory of Jammu & Kashmir. This move aims to provide essential financial services to unbanked and underbanked areas in the region, where access to formal credit has been limited. The company’s founder and MD, Nirmal Jain, emphasized that this decision reflects their commitment to bringing financial access to unserved and underserved communities.
According to Jain, the approval to open branches comes at a critical time when people in the region are facing disruptions in their livelihoods. IIFL Finance plans to offer credit solutions tailored to local needs, supporting the revival of small businesses and households in the region. The company’s presence in Jammu & Kashmir will complement its existing Corporate Social Responsibility (CSR) activities in the state, which include programs in education, skill development, healthcare, and community empowerment.
IIFL Foundation, the company’s CSR arm, has been present in Kashmir for over a decade. The foundation has supported various initiatives, including providing incubator machines at the LD Hospital during the Kashmir floods. The company’s expansion into Jammu & Kashmir is a significant step towards fulfilling its mission of providing financial access to all. By offering credit solutions and supporting local communities, IIFL Finance aims to make a positive impact on the region’s economy and society.
The approval to open branches in Jammu & Kashmir is a timely step, considering the region’s history of limited access to formal credit. IIFL Finance’s expansion is expected to bridge this gap, providing much-needed financial services to individuals and businesses in the region. With its commitment to CSR activities and community development, the company is poised to make a significant difference in the lives of people in Jammu & Kashmir. Overall, IIFL Finance’s entry into the region is a positive development, with the potential to drive economic growth and improve the well-being of local communities.
India’s GDP growth expected to surge to 7.0% in Q4 FY25, according to a report by UBI
According to a report by the Union Bank of India (UBI), the Indian economy is expected to grow at a rate of 7.0% in the fourth quarter of the financial year 2025, up from 6.2% in the third quarter. This growth is driven by an improvement in Gross Value Added (GVA) growth, which is expected to increase to 6.7% in Q4 from 6.2% in Q3. The report notes that high-frequency indicators present a mixed trend, but the economic activity index suggests a slight upward bias.
The UBI report also notes that the revised estimate for full-year FY25 growth is likely to be lowered to 6.3% from 6.5% previously. The report cites various factors that are likely to support this growth recovery, including a possible revival in rural demand, continued government spending, and large-scale religious events like the Mahakumbh. The Mahakumbh, in particular, is expected to have a significant impact on the economy, with a nominal growth impact of Rs 2-3 lakh crore.
The Reserve Bank of India’s (RBI) GDP nowcast also projects Q4 FY25 growth at 6.6%, indicating a sequential improvement in economic momentum during the second half of FY25. The International Monetary Fund (IMF) has also projected India’s GDP at 6.2% in FY25 and 6.3% in fiscal 2026, driven by strong private consumption. However, the IMF notes that global growth is expected to slow to 2.8% in 2025.
Overall, the report suggests that the Indian economy is expected to experience a moderate growth recovery in the fourth quarter of FY25, driven by a combination of factors including government spending, rural demand, and large-scale events. However, the growth rate is expected to be lower than previously estimated, and the economy will need to navigate various challenges to achieve sustained growth in the long term. The UBI report’s heatmap of high-frequency indicators shows a mixed picture, but the economic activity index suggests a mild upward bias, indicating a pickup in private sector activity.
SBI report reveals RBI’s robust dividend payout to government driven by foreign exchange sales and interest earnings
The Reserve Bank of India (RBI) has made a record dividend payout of nearly Rs 2.7 trillion to the government, surpassing expectations. According to a report by the State Bank of India (SBI), this surplus transfer was made possible due to robust gross dollar sales, higher foreign exchange gains, and steady increases in interest income. The RBI’s active participation in the foreign exchange market, particularly its aggressive dollar sales, played a significant role in stabilizing the rupee and generating substantial foreign exchange gains.
In the current financial year, the RBI sold a massive USD 371.6 billion, much higher than the USD 153 billion recorded in the previous year. This large-scale selling helped the central bank book substantial foreign exchange gains, which added to the surplus. Additionally, the RBI earned more income from its rupee securities, with its holdings rising by Rs 1.95 lakh crore to Rs 15.6 lakh crore as of March 2025.
The SBI report highlighted the RBI’s prudent approach in maintaining financial stability, citing its decision to increase its risk buffer, known as the Contingent Risk Buffer (CRB). This buffer acts as a safeguard against future risks and was maintained within a range of 7.5 per cent to 4.5 per cent of the RBI’s balance sheet. The transferable surplus was calculated under the revised Economic Capital Framework (ECF), approved by the RBI’s Central Board.
This large payout is a windfall for the government, with the actual amount exceeding the budget estimates. The Union Budget for 2025-26 had projected a total dividend income of Rs 2.56 lakh crore from the RBI and public sector financial institutions. The RBI’s record dividend payout is a testament to its effective management of the country’s foreign exchange reserves and its commitment to maintaining financial stability. The payout is expected to provide a significant boost to the government’s finances, allowing it to meet its fiscal targets and invest in various development projects. Overall, the RBI’s proactive approach has yielded positive results, and the government is likely to benefit from this windfall in the coming years.
Bank holiday alert: Will banks remain closed on May 24? Check the RBI calendar to find out
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.
SBI attributes RBI’s unprecedented Rs 2.7 trillion dividend payout to dollar sell-offs and significant foreign exchange gains
The Reserve Bank of India (RBI) has made a historic dividend payout of approximately Rs 2.7 trillion to the government, fueled by strong sales of US dollars, high foreign exchange gains, and steady rises in interest income. According to a report by the State Bank of India (SBI), the RBI’s active participation in the forex market was a major contributor to this huge surplus. The central bank emerged as the biggest seller of foreign exchange reserves among Asian peers in January 2025, with gross dollar sales reaching $371.6 billion by February 2025.
The RBI’s intervention strategy to stabilize the Rupee involved large-scale sell-offs of US dollars, which helped the central bank book substantial forex gains and contributed significantly to the dividend payout. The bank’s holdings in rupee securities also rose by Rs 1.95 lakh crore to Rs 15.6 lakh crore as of March 2025, resulting in increased earnings. While falling government securities yields dampened mark-to-market gains, overall interest income still recorded a healthy growth.
The SBI report praised the central bank’s prudent approach to maintaining financial stability, noting that the surplus transfer could have been even higher if the RBI had not decided to raise its risk buffer. The Contingent Risk Buffer (CRB), a safety net for unforeseen shocks, was kept within the 5.5 to 6.5 percent range of the RBI’s balance sheet. The surplus was calculated under the revised Economic Capital Framework (ECF) and approved by the RBI’s Central Board.
This unexpected windfall is a major boost to the government’s finances, with the actual dividend income exceeding budget estimates. The Union Budget for 2025-26 had projected a total dividend income of Rs 2.56 lakh crore from the RBI and state-run financial institutions, but the latest payout will comfortably exceed this figure. The RBI’s dividend payout is a significant development, demonstrating the central bank’s ability to generate substantial income and support the government’s finances. The payout is also a testament to the RBI’s effective management of the country’s foreign exchange reserves and its commitment to maintaining financial stability.
Achievement Marked by the Reserve Bank of India
The Reserve Bank of India (RBI) made a historic announcement on May 23, 2025, revealing a record dividend payout of ₹2.69 lakh crore to the Government of India for the financial year 2025. This unprecedented amount surpasses any previous dividend paid by the RBI in its history. The transfer is expected to significantly enhance the government’s financial position, leading to several positive outcomes.
The primary benefit of this dividend payout is likely to be an increase in capital spending, which can stimulate economic growth. Furthermore, the government’s borrowing requirements may decrease, contributing to an overall positive economic environment. The infusion of this substantial amount is also expected to boost confidence in India’s financial stability and growth prospects.
The RBI, as the central bank of India, has played a crucial role in maintaining a solid macroeconomic environment in the country. This timely transfer of funds will help India navigate the current challenging financial times. The government can utilize this amount to invest in development projects, infrastructure, and social welfare schemes, ultimately benefiting the economy and the citizens.
It is essential to note that the RBI’s decision to pay a record dividend is a testament to its commitment to supporting the government’s efforts to promote economic growth and stability. The move is expected to have a positive impact on the overall economy, and the government is likely to use this opportunity to accelerate its development agenda.
In conclusion, the RBI’s record dividend payout of ₹2.69 lakh crore to the Government of India is a significant development that is expected to have far-reaching positive consequences for the economy. The increased financial resources will enable the government to enhance its spending on key sectors, reduce borrowings, and boost confidence in the country’s financial stability and growth prospects.
Emirates NBD receives regulatory approval to establish a fully owned subsidiary in India
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.
NDTV Profit Exclusive: Emirates NBD Considers Wholly-Owned Subsidiary Route Amid IDBI Bank Acquisition Speculation
Emirates NBD, a leading Middle Eastern bank, is planning to establish a wholly-owned subsidiary in India to make its bid for IDBI Bank more attractive. The bank has received an in-principle nod from the Reserve Bank of India (RBI) to convert its existing branches in Chennai, Gurugram, and Mumbai into a wholly-owned subsidiary. This move will allow Emirates NBD to expand its operations in India and acquire a domestic franchise more easily.
A wholly-owned subsidiary model provides a foreign lender with unfettered branch addition and allows them to maintain capital in India, making it more difficult to repatriate capital back to home markets. This model also grants the regulator more comfort, as it ensures that the foreign lender’s domestic unit is better capitalized.
Emirates NBD is currently competing with Prem Watsa’s Fairfax Capital to acquire IDBI Bank. The establishment of a wholly-owned subsidiary is expected to give Emirates NBD an edge in the bidding process, as Fairfax Capital faces complications due to its existing controlling stake in CSB Bank India. The regulator typically does not allow one promoter to own multiple banking franchises, and Fairfax Capital is working out a special structure to ensure that IDBI Bank and CSB Bank are held separately.
The bidders are expecting the process to close by the end of this financial year or early next year. However, they are also watching for any developments on the employee side, as IDBI Bank’s employees are still strong and may oppose foreign investors. The employee unions may cause some impediments in the closure of the deal or any retrenchment at the bank.
Other large foreign lenders, such as HSBC and Standard Chartered Bank, have opted out of the wholly-owned subsidiary model due to double capital charges. However, smaller lenders like DBS Bank and State Bank of Mauritius have used this route to expand their operations in India. Emirates NBD’s decision to establish a wholly-owned subsidiary demonstrates its commitment to expanding its presence in the Indian market and acquiring a domestic franchise.
The Indian rupee weakens against the US dollar as markets anticipate further interest rate reductions by the Reserve Bank of India
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.
Bank receives preliminary approval to establish a fully owned subsidiary
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.
Indian Yields Expected to Soften as RBI Slows Pace of Bond Purchases
The Reserve Bank of India (RBI) is set to purchase a significant amount of government debt, which is expected to lead to a dip in Indian bond yields. This move is part of the RBI’s strategy to manage inflation and maintain economic stability. The central bank has already purchased 3.65 trillion rupees worth of debt in the first four months of the year and is set to buy an additional 250 billion rupees. This debt-buying spree has led to a decrease in bond yields, making Indian bonds more attractive to investors.
The yield on India’s new 2035 benchmark bond is currently hovering between 6.20% and 6.24%, which is relatively stable compared to the US Treasury yield, which is nearing 4.50% after a recent rating downgrade. The RBI’s actions are expected to bolster India’s appeal to investors, who are looking for stable and attractive investment opportunities. Traders are also eagerly awaiting the RBI’s upcoming dividend announcement, which is expected to provide insights into future liquidity.
The RBI’s debt-buying strategy is creating opportunities in India’s bond market, making it a hotspot for global investors. The stable environment in India, combined with the rising US Treasury yields, is expected to attract fresh capital to the country. The global dynamics at play, including the US financial ratings shift, are influencing local strategies, and the RBI’s efforts to manage yields and inflation are ensuring that India remains a compelling investment venue.
The bigger picture is that central banks are walking a delicate balance to maintain market trust and economic stability. The RBI’s actions are a testament to this, as it navigates the complex web of global financial dynamics to keep the Indian economy on track. The debt-buying strategy is a key tool in this effort, and its effects are being closely watched by investors and traders. Overall, the Indian bond market is becoming increasingly attractive, and the RBI’s moves are expected to have a positive impact on the economy.
A crucial announcement from the RBI on fixed deposits is imminent, and its impact will be felt by the general public across the board.
The Reserve Bank of India (RBI) has reduced the repo rate twice this year, resulting in a decrease in interest rates on Fixed Deposits (FDs) offered by most banks, especially public sector banks. With inflation showing signs of easing, experts predict that the RBI may cut rates again in June. This makes it a good time to invest in FDs, as once you book an FD, the interest rate is locked in for the entire term, even if market rates fall later.
Currently, top public sector banks are offering attractive interest rates on 1-2 year FDs, ranging from 7.05% to 7.30% for regular customers. Senior citizens can earn even higher returns, up to 7.75% for 1-2 year tenures. Banks such as Bank of Maharashtra, Punjab & Sind Bank, and UCO Bank are offering these higher rates for senior citizens.
Before investing in an FD, it’s essential to keep a few things in mind. Firstly, choose the FD tenure wisely, as locking in current high rates for longer is better. Secondly, check the bank’s rating, as public sector banks are generally safer. Thirdly, explore senior citizen schemes, which offer higher interest rates. Finally, enable auto-renewal to ensure that your money doesn’t lie idle after maturity.
If the RBI cuts rates again in June, today’s FD rates may soon be history. Therefore, if you want stable and guaranteed returns, now is the right time to lock in your investment. With the current interest rates and the possibility of further rate cuts, investing in an FD before June could be a smart move. It’s essential to take advantage of the current rates before they drop, as they may not be available in the future.
Overall, investing in an FD is a low-risk investment option that provides guaranteed returns. With the current interest rates and the potential for further rate cuts, it’s crucial to make an informed decision and invest wisely. By considering the factors mentioned above and taking advantage of the current rates, you can make the most of your investment and earn attractive returns on your FD.
RBI Expects Inflation to Meet Target by Fiscal Year 2026
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.
Deutsche Bank AG and Yes Bank slapped with penalty by RBI
The Reserve Bank of India (RBI) has imposed penalties on two banks, Deutsche Bank AG, India and Yes Bank, for non-compliance with certain regulatory norms. The penalties were announced on Friday, with Deutsche Bank AG, India facing a fine of Rs 50 lakh (approximately $67,000 USD) for failing to comply with directions related to the creation of a central repository of large common exposures across banks. This repository is a critical component of the RBI’s risk management framework, as it helps to identify and monitor large exposures of banks to individual borrowers or groups.
Yes Bank, on the other hand, has been fined Rs 29.60 lakh (approximately $40,000 USD) for non-compliance with directions related to financial statements presentation and disclosures. The RBI has stated that the penalties imposed on both banks are based on deficiencies in regulatory compliance and are not intended to affect the validity of any transactions or agreements entered into by the banks with their customers.
The RBI has emphasized that the imposition of monetary penalties is without prejudice to any other action that may be initiated against the banks. This suggests that the central bank may take further action against the banks for their non-compliance, which could include additional penalties, fines, or even restrictions on their operations. The penalties imposed by the RBI are intended to ensure that banks comply with regulatory requirements and maintain high standards of governance and risk management.
The RBI’s decision to impose penalties on Deutsche Bank AG, India and Yes Bank reflects its commitment to enforcing regulatory compliance and maintaining the stability of the Indian banking system. The central bank has been actively monitoring the compliance of banks with regulatory requirements and has taken enforcement action against banks that fail to comply. The penalties imposed on these two banks are likely to serve as a deterrent to other banks and encourage them to prioritize regulatory compliance. Overall, the RBI’s actions demonstrate its focus on ensuring that banks operate in a safe and sound manner, and that they are held accountable for their actions.
Earn up to 9.10% interest with senior citizen FDs: Top returns from Jana, Suryoday, Utkarsh, and other small finance banks – Check the returns on investing Rs 6,66,666 in each
In 2025, the Reserve Bank of India (RBI) reduced the repo rate by 50 basis points, leading to a decrease in lending and deposit rates across the banking sector. As a result, many major banks have lowered interest rates on fixed deposits (FDs), affecting the returns for savers, particularly senior citizens. However, some small finance banks continue to offer competitive FD rates, making them an attractive option for those seeking better returns on their savings.
Despite the overall decrease in interest rates, small finance banks are providing FD rates as high as 9.10% for senior citizens. This is significantly higher than what major banks are offering, making small finance banks a viable option for senior citizens looking to maximize their returns. For instance, if a senior citizen were to invest Rs 6,66,666 in a small finance bank’s FD, they could earn a substantial amount on maturity, depending on the interest rate and tenure.
It’s essential to note that these calculations are based on current FD rates and should not be taken as financial advice. Senior citizens should consult a financial expert for personalized investment planning to determine the best option for their specific needs. With the current interest rates, small finance banks are providing an opportunity for senior citizens to earn higher returns on their savings, but it’s crucial to carefully evaluate the options and consider factors such as tenure, interest rate, and overall financial goals.
Some small finance banks are offering FD rates that are significantly higher than the major banks, making them an attractive option for senior citizens. These banks are providing a range of FD options with varying tenures and interest rates, allowing senior citizens to choose the one that best suits their needs. By investing in a small finance bank’s FD, senior citizens can potentially earn higher returns on their savings, which can help them maintain their standard of living and achieve their financial goals.
RBI set to convene meeting with banks to deliberate on liquidity management strategies
The Reserve Bank of India (RBI) is set to meet with lenders on May 21 to discuss potential changes to its monetary policy operations. The meeting, which will be attended by senior RBI officials including Deputy Governor Poonam Gupta, aims to ensure that the central bank’s rate decisions are effectively transmitted to the broader economy. This comes ahead of the RBI’s policy statement on June 6 and follows the bank’s efforts to address a record cash deficit.
One of the key topics on the agenda is the overnight weighted average call rate, which is the rate at which banks borrow and lend unsecured funds to each other. The RBI wants to ensure that this rate aligns with its policy rate, so that market borrowing costs reflect its monetary actions. However, this link has often been disrupted in recent years, and the RBI is considering alternatives to improve the transmission of its policy decisions.
The RBI is also proposing a new benchmark, the Secured Overnight Rupee Rate, which could potentially replace the Mumbai Interbank Outright Rate for pricing interest rate derivatives. Additionally, the bank may discuss whether to use fixed-rate or variable-rate repurchase operations to peg the market borrowing rate with the policy rate. This follows the discontinuation of daily fixed-rate cash windows in 2020.
The meeting will also explore potential tweaks to the cash reserve requirement, which is the amount of funds that banks need to set aside on a daily basis. Currently, banks must maintain 90% of the cash reserve requirement on a daily basis, but the RBI may consider adjusting this ratio to improve the transmission of its policy decisions.
Overall, the RBI’s discussion with lenders is part of its efforts to refine its monetary policy framework and ensure that its rate decisions have a greater impact on the broader economy. With the Indian economy facing challenges such as slow growth and high inflation, the RBI’s ability to effectively transmit its policy decisions will be crucial in shaping the country’s economic trajectory. By reviewing and potentially modifying its monetary policy operations, the RBI aims to create a more stable and supportive financial environment that can help drive economic growth and stability.
Union Bank of India expects metal prices to continue exerting upward pressure on Wholesale Price Index (WPI) in the foreseeable future, as reported by The Economic Times.
According to recent reports, metal prices are expected to continue their upward trend, which will likely keep pressure on the Wholesale Price Index (WPI) in the coming months. This is stated by the Union Bank of India and reported by The Economic Times and Times of India. The increase in metal prices will likely contribute to a rise in the WPI, which measures the average change in prices of goods and services sold in the wholesale market.
In April, the WPI fell to 0.85%, as reported by NDTV. However, experts believe that this decrease may be short-lived due to the ongoing upward trend in metal prices. The Reserve Bank of India (RBI) may still consider cutting interest rates by another 75 basis points in the fiscal year 2026, as inflation has cooled to multi-month lows, according to The Financial Express.
The current decrease in WPI is seen as a positive sign, with The Indian Express commenting that sustained moderation in inflation is a good low. Experts attribute the decrease in inflation to a combination of factors, including a decline in global commodity prices and a normal monsoon season. However, the upward pressure on metal prices may offset these factors and keep the WPI from decreasing further.
The RBI’s decision to cut interest rates will depend on various factors, including the trajectory of inflation, economic growth, and global economic trends. If metal prices continue to rise, it may limit the RBI’s ability to cut interest rates further, as higher metal prices could contribute to increased production costs and higher inflation.
In conclusion, while the current decrease in WPI is a positive sign, the upward trend in metal prices is likely to keep pressure on the WPI in the coming months. The RBI will need to carefully consider the impact of metal prices on inflation and economic growth when making decisions about interest rates. As the economy continues to evolve, it will be important to monitor the trajectory of metal prices and their impact on the WPI and inflation.
RBI’s Proposed Project Finance Guidelines: What’s in Store for HDFC, ICICI, SBI, and Other Leading Banks, According to Telangana NavaNirmana Sena
The Reserve Bank of India (RBI) has released a draft circular on project finance, which is expected to significantly impact major banks in India, including HDFC, ICICI, and SBI. The new guidelines aim to improve the lending practices of banks and reduce the risk of default by borrowers.
The draft circular emphasizes the importance of due diligence and credit assessment before sanctioning loans for large projects. It suggests that banks should conduct thorough credit evaluations, including assessing the creditworthiness of the borrower, the viability of the project, and the potential risks involved. The RBI has also proposed that banks should have a Board-approved policy for project finance, which should include clear guidelines for loan sanctioning, monitoring, and recovery.
One of the key aspects of the draft circular is the introduction of a new concept called “상위 equity” (senior equity), which refers to the equity contribution made by the promoters of a project. The RBI has proposed that banks should ensure that the promoters’ equity contribution is at least 25% of the total project cost. This move is aimed at ensuring that promoters have a significant stake in the project and are committed to its success.
The draft circular also emphasizes the importance of monitoring and supervision of projects financed by banks. It suggests that banks should have a robust monitoring system in place to track the progress of projects, identify potential risks, and take corrective action if necessary.
The impact of the draft circular on major banks in India is expected to be significant. HDFC, ICICI, and SBI, which are among the largest lenders to the infrastructure sector, may need to revise their lending practices and policies to comply with the new guidelines. The introduction of senior equity and the emphasis on monitoring and supervision may lead to a reduction in the risk of default by borrowers, but it may also increase the cost of borrowing for projects.
The Telangana NavaNirmana Sena, a political party in Telangana, has welcomed the draft circular, stating that it will help to improve the transparency and accountability of banks and reduce the risk of default by borrowers. However, some industry experts have expressed concerns that the new guidelines may lead to a decrease in lending to the infrastructure sector, which could have a negative impact on the economy.
Overall, the RBI’s draft circular on project finance is a significant step towards improving the lending practices of banks in India. While it may have a short-term impact on the banking sector, it is expected to lead to a more stable and sustainable financial system in the long run.
Public Sector Banks Take the Lead: Home Loans Drop Below 8% as RBI Rate Cut Boosts Access to Affordable Housing
The Reserve Bank of India (RBI) has mandated that all retail floating-rate loans, including home loans, be linked to an external benchmark, typically the RBI’s repo rate, since October 1, 2019. This means that when the RBI reduces the repo rate, banks are required to pass on the benefit to borrowers. However, it has been observed that public banks have been prompt in complying with this guideline, while several private banks have been slow to adjust.
Despite a cumulative 50-basis-point cut in the repo rate in February and April 2025, leading private banks such as ICICI Bank, Axis Bank, and HDFC Bank have not fully transmitted the reduction to customers. For instance, ICICI Bank’s home loan rate remains unchanged at 8.75%, while HDFC Bank has reduced its rate by only 25 basis points to 8.50%. On the other hand, government banks such as Canara Bank, Bank of Maharashtra, and Union Bank of India are offering competitive interest rates, ranging from 7.80% to 7.90%, for a home loan of ₹1 crore with a tenure of 20 years.
Experts believe that private lenders may revise their rates soon, as large lenders usually align their rates over time. A lower interest rate can significantly reduce the monthly EMI burden, resulting in higher savings and preservation of emergency funds. For example, a home loan of ₹1 crore with a tenure of 20 years at an interest rate of 7.80% would translate to a monthly EMI of ₹82,404, compared to ₹93,144 at an interest rate of 9.35%.
If you’re planning to buy a home, now is a favorable time to act, with multiple public sector banks (PSBs) offering sub-8% interest rates. However, it’s essential to assess factors such as your credit score, income, and loan tenure before making a decision, as these can influence your final interest rate. It’s also important to note that rates are subject to change and may vary depending on the lender and borrower profile. Therefore, it’s crucial to check with lenders for the latest terms and consult a professional before taking a loan.
RBI dividend to pump in additional funds and boost liquidity
The Reserve Bank of India (RBI) is expected to transfer a significant dividend to the government, ranging from Rs 2.25 lakh crore to Rs 2.75 lakh crore. This payout will inject fresh liquidity into the banking system, raising surplus funds to between Rs 5.5 lakh crore and Rs 6 lakh crore. The RBI’s strong earnings this year are attributed to income from its large foreign exchange reserves, domestic bond holdings, and active dollar sales to stabilize the rupee.
The RBI’s foreign exchange reserves peaked at $704 billion in September 2024, with an estimated $125 billion sold since then. The gross dollar sales reached $371.6 billion in FY25, up from $153 billion the previous year. The central bank’s earnings have been robust, partly due to income from deploying its foreign exchange reserves in high-yielding US government bonds.
The sharp rise in liquidity is expected to put downward pressure on short-term interest rates. Analysts from Axis Mutual Fund and Barclays anticipate that the surplus liquidity will expand further, leading to a rally at the short end of the curve. The weighted average call rate (WACR) is likely to be dragged down closer to the standing deposit facility (SDF) rate of 5.75%, effectively easing monetary policy.
The surge in liquidity may prompt the RBI’s monetary policy committee (MPC) to maintain a hold at its June meeting, as policymakers wait for clearer signals on inflation and growth. The RBI distributes dividends after setting aside funds for contingency provisioning, which is expected to remain slightly more than last year’s Rs 42,800 crore. The dividend amount is determined under the Economic Capital Framework, which stipulates a risk buffer of 5.5% to 6.5% of the RBI’s balance sheet.
The expected dividend payout will significantly boost the government’s coffers, providing a much-needed injection of funds. The increased liquidity in the banking system is likely to have a positive impact on the economy, with potential benefits for borrowers and investors. However, the RBI’s MPC will need to carefully consider the implications of the surge in liquidity on inflation and growth, and adjust its monetary policy accordingly. Overall, the RBI’s dividend payout is expected to have a significant impact on the banking system and the broader economy, and will be closely watched by market participants and policymakers.
Turn ₹1 Lakh into a Lucrative Investment, Generating ₹24,604 in Interest
The State Bank of India (SBI) has recently lowered the interest rates on its savings schemes, including its Fixed Deposit (FD) scheme, following the Reserve Bank of India’s (RBI) repo rate cut. However, the SBI FD scheme still offers attractive interest rates, making it a good investment option for those looking for safe and stable returns. The interest rates for SBI’s FD schemes range from 3.50% to 7.05% for the general public and 4.00% to 7.55% for senior citizens.
For a 2-3 year FD scheme, the interest rates are 6.90% for the general public and 7.40% for senior citizens. Senior citizens can earn an interest of ₹24,604 on an investment of ₹1 lakh in a 3-year FD scheme, while the general public can earn ₹22,781 in interest on the same investment. The total amount received at maturity would be ₹1,22,781 for the general public and ₹1,24,604 for senior citizens.
The SBI FD scheme is a good option for those who want to grow their savings safely and steadily. It provides a secure way to build wealth over time with guaranteed returns. The scheme is ideal for senior citizens who want to earn fixed returns with minimal risk. Even with the recent interest rate cut, the SBI FD scheme remains a great investment option. It is a low-risk investment that can provide a good return on investment, making it a good choice for those who want to secure their future.
Investing in an SBI FD scheme is a good way to earn fixed returns over a few years. The scheme is available for both the general public and senior citizens, and the interest rates are competitive. The scheme is also flexible, allowing investors to choose from a range of tenure options. Overall, the SBI FD scheme is a good investment option for those who want to grow their savings safely and steadily.
In conclusion, the SBI FD scheme is a great investment option that offers attractive interest rates and guaranteed returns. It is a low-risk investment that can provide a good return on investment, making it a good choice for those who want to secure their future. Whether you are a senior citizen or a member of the general public, the SBI FD scheme is a good option to consider for growing your savings safely and steadily.
Canara Bank Slashes Lending Rates by 10 Basis Points, Making Loans More Affordable: Rediff Money News
Canara Bank, a state-owned bank, has reduced its Marginal Cost of Funds-Based Lending Rate (MCLR) by 10 basis points (0.10 percentage points) across all tenors, effective from April 12. This reduction makes loans linked to the MCLR benchmark cheaper for consumers. The one-year tenor MCLR, which is used to price most consumer loans such as auto and personal loans, has been reduced to 9% from the existing rate of 9.10%.
The new MCLR rates for other tenors are as follows: one-month, three-month, and six-month tenors will be in the range of 8.25-8.80%. The MCLR on overnight tenor will be 8.20%, down from 8.30%. This reduction is a result of the Reserve Bank of India’s (RBI) decision to slash its benchmark lending rate by 25 basis points to 6% last month. This marks the second consecutive rate cut this year, and it is expected to have a positive impact on the economy.
The reduction in MCLR by Canara Bank is likely to benefit consumers who have taken loans linked to the MCLR benchmark. With the reduced interest rates, borrowers can expect to pay lower interest on their loans, which can help reduce their financial burden. The move is also expected to boost credit growth and increase lending activity in the economy.
The RBI’s decision to cut interest rates is aimed at stimulating economic growth, which has been slowing down in recent times. By reducing the benchmark lending rate, the RBI is encouraging banks to lend more and at lower interest rates, which can help increase consumption and investment in the economy. Canara Bank’s decision to reduce its MCLR is in line with the RBI’s efforts to boost economic growth and is expected to have a positive impact on the banking and financial sector.
Overall, the reduction in MCLR by Canara Bank is a welcome move for consumers and is expected to have a positive impact on the economy. With the new rates effective from April 12, borrowers can expect to benefit from lower interest rates on their loans. The move is also expected to increase lending activity and boost credit growth, which can help stimulate economic growth.
RBI removes operational curbs on Pimpri Chinchwad Co-operative Bank
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.
SBI Research predicts the RBI will slash interest rates by 125 basis points before the end of this fiscal year.
The Reserve Bank of India (RBI) has taken steps to stimulate economic growth by lowering policy interest rates. In February and April, the central bank reduced interest rates by 25 basis points each, aiming to boost economic activity. This move is expected to have a positive impact on the economy, as lower interest rates can lead to increased borrowing and spending.
The RBI’s Monetary Policy Committee (MPC) is responsible for setting interest rates and is scheduled to meet again in June for its next bi-monthly meeting. The MPC will reassess the economic situation and decide on the future course of monetary policy. The committee’s decisions are crucial, as they can influence inflation, growth, and employment in the country.
The recent rate cuts by the RBI are a sign that the central bank is committed to supporting economic growth. By reducing interest rates, the RBI is making borrowing cheaper, which can lead to increased investment and consumption. This, in turn, can help boost economic activity and create jobs.
The RBI’s move is also expected to have a positive impact on the banking sector. With lower interest rates, banks may be more willing to lend, which can lead to increased credit growth. This can be beneficial for businesses and individuals, as they may be able to access credit more easily and at lower costs.
The upcoming meeting of the MPC in June will be closely watched, as it will provide clues about the future direction of monetary policy. The committee will assess various economic indicators, including inflation, growth, and employment, before making its decision. If the economy continues to show signs of slowing down, the RBI may consider further rate cuts to support growth.
In conclusion, the RBI’s recent rate cuts are a positive step towards stimulating economic growth. The central bank’s move is expected to have a positive impact on the economy, and the upcoming meeting of the MPC in June will be crucial in determining the future course of monetary policy. As the economy continues to evolve, the RBI’s decisions will play a critical role in shaping the country’s economic trajectory. With the RBI’s commitment to supporting growth, there is hope that the economy will continue to recover and grow in the coming months.
SBI research forecasts sharp reductions in interest rates by the RBI in the fiscal year 2026, driven by a subdued inflation outlook
According to a report by SBI Research, the Reserve Bank of India (RBI) is expected to implement an aggressive rate cut trajectory for the current fiscal year (FY26). This is driven by the significant moderation in inflation, which has hit a 67-month low of 3.34% in March 2025. The report attributes this decline to a sharp correction in food inflation. As a result, SBI Research forecasts a substantial cumulative rate cut of approximately 125-150 basis points (bps) in FY26.
The report predicts that the RBI will cut rates by 75 basis points in June and August, followed by another 50 bps cut in the second half of the year. This would result in a cumulative cut of 125 bps. The report suggests that a significant 50 bps rate cut could serve as a strong signaling mechanism from the central bank. The key policy rate is expected to breach the neutral rate by March 2026.
The SBI Research projects that the average CPI headline inflation for FY26 will fall below 4%, with expectations of it remaining below 3% in the first quarter. However, the report also highlights a potential challenge arising from these rate cuts, such as the credit-deposit wedge may widen. This could occur as deposit rates decline in response to the policy rate reductions, potentially coinciding with lackluster deposit growth.
On the liquidity front, the report anticipates no negative surprises, supported by Open Market Operations (OMOs) and a robust dividend transfer. Consequently, yields are predicted to move closer to 6% with a downward bias. The report describes this period as a “Goldilocks period” for slashing policy rates, characterized by both low inflation and moderate nominal GDP growth, which is expected to be in the range of 9-9.5% for FY26.
Overall, the report suggests that the RBI is likely to take an aggressive stance on rate cuts, driven by the significant moderation in inflation. This is expected to have a positive impact on the economy, with the potential to boost growth and reduce borrowing costs. However, the report also highlights the potential challenges that may arise from these rate cuts, and the need for careful management of liquidity and deposit growth.
Earn up to 8.5% interest on your fixed deposits with RBL and Union Bank, exclusively available to select customers – MSN
Several banks in India have been increasing interest rates on fixed deposits (FDs) to attract customers and stay competitive in the market. Two banks, RBL Bank and Union Bank of India, are offering high interest rates of up to 8.5% on FDs to select customers. This move is expected to woo depositors looking for higher returns on their investments.
RBL Bank is offering an interest rate of 8.5% on FDs with tenures ranging from 2-10 years for senior citizens. For regular customers, the bank is offering an interest rate of up to 8% on FDs with tenures of 2-10 years. These rates are among the highest in the industry, making RBL Bank an attractive option for those looking for higher returns on their deposits.
Union Bank of India is also offering competitive interest rates on FDs. The bank is offering an interest rate of 8.1% on FDs with tenures of 5-10 years for senior citizens. For regular customers, the bank is offering an interest rate of up to 7.8% on FDs with tenures of 5-10 years.
These high interest rates are being offered to select customers, including senior citizens, non-resident Indians (NRIs), and existing customers. The interest rates are also subject to change and may not be available for all deposit amounts. It is essential for customers to check the interest rates and terms and conditions before investing in an FD.
The increase in interest rates on FDs is a result of the Reserve Bank of India’s (RBI) decision to raise the repo rate. The RBI has increased the repo rate by 225 basis points since May 2022, leading to a rise in lending rates and deposit rates. As a result, banks have been increasing interest rates on FDs to attract deposits and maintain their liquidity.
In conclusion, RBL Bank and Union Bank of India are offering high interest rates of up to 8.5% on FDs to select customers. These rates are among the highest in the industry, making them an attractive option for those looking for higher returns on their deposits. However, customers should check the interest rates and terms and conditions before investing in an FD. With the RBI’s decision to raise the repo rate, banks are expected to continue increasing interest rates on FDs, providing customers with more options for higher returns on their investments.
SGB 2017-18 Series I Matures: RBI Reveals Final Price, Offering 221% Returns to Investors on Maturity – Full Details Inside
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 slapped penalties on five major banks, including ICICI Bank, Bank of Baroda, Axis Bank, and two others.
The Reserve Bank of India (RBI) has imposed penalties on five major banks, including ICICI Bank, Bank of Baroda, Axis Bank, IDBI Bank, and Bank of Maharashtra, for non-compliance with various regulatory directions. The penalties, ranging from ₹29.60 lakh to ₹97.80 lakh, were imposed due to deficiencies in regulatory compliance in areas such as cyber security, know your customer (KYC) norms, credit and debit card issuance, and customer service.
ICICI Bank was fined ₹97.80 lakh for non-compliance with RBI directions on cyber security, KYC, and credit and debit card issuance. Bank of Baroda was penalized ₹61.40 lakh for non-compliance with directions on financial services and customer service. IDBI Bank and Bank of Maharashtra were each fined ₹31.80 lakh for non-compliance with directions on interest subvention scheme for agricultural loans and KYC norms, respectively.
Axis Bank was penalized ₹29.60 lakh for unauthorized operation of internal accounts. The RBI clarified that the penalties were not intended to question the validity of any transactions or agreements entered into by the banks with their customers, but rather to address the deficiencies in regulatory compliance.
The penalties are a reminder of the RBI’s focus on ensuring that banks adhere to regulatory requirements and maintain high standards of compliance. The central bank has been actively monitoring banks’ compliance with various regulations and has taken enforcement actions against those that fail to meet the required standards. The penalties imposed on these five banks serve as a warning to other lenders to ensure that they are in compliance with all regulatory requirements to avoid similar penalties in the future. Overall, the RBI’s actions aim to promote a safe and sound banking system that protects the interests of customers and maintains public trust in the financial sector.
RBI panel proposes longer trading hours, eyeing a 7pm close for money markets
A Reserve Bank of India (RBI) panel has proposed extending the operating hours of the money market from 5pm to 7pm. This move aims to provide banks with greater flexibility in managing short-term liquidity and accessing interbank and central bank funds. The proposal comes in response to the growing complexity and size of India’s financial markets, which have become increasingly linked to global markets. The panel was established to review trading and settlement hours across RBI-regulated markets, with a focus on improving market efficiency, liquidity, volatility, and price discovery.
Since the last major review in 2019, India’s financial markets have undergone significant changes, including an increase in participants, products, and non-resident activity. The introduction of round-the-clock payment systems, such as UPI, has also altered liquidity dynamics. The panel believes that extending trading hours will help to better align India’s markets with global markets and provide more opportunities for market participants.
The proposed changes include extending call money trading to 7pm, with a reporting window closing at 7:30pm. Market repo and triparty repo (TREP) trades would be permitted until 4pm, an hour later than the current close. The settlement window for repo deals would also be shifted to 5:30-6:30pm. Additionally, the liquidity adjustment facility (LAF) auction would be moved forward to 9:30-10am to align market operations at the start of the day.
The extension of trading hours is expected to have several benefits, including improved liquidity, reduced volatility, and more efficient price discovery. It will also provide banks with greater flexibility in managing their short-term liquidity and accessing interbank and central bank funds. The RBI will continue to fine-tune operations throughout the day, as needed. Overall, the proposed changes aim to enhance the efficiency and effectiveness of India’s financial markets, making them more competitive and attractive to global investors.
RBI Cracks Down: 7 Non-Banking Financial Companies Lose License, 11 Others Withdraw Registration, Full List Inside
The Reserve Bank of India (RBI) has taken action against 7 non-banking financial companies (NBFCs) in April. The license of 6 NBFCs has been cancelled, and a monetary penalty has been imposed on one. The cancelled licenses include those of Unitara Finance Limited in Madhya Pradesh, Thamiraparani Investments Private Limited, Armusk Infrastructure Investments Limited, Vishwapriya Finance Limited, Matrix Financial Services Limited, all in Tamil Nadu, and Welfil Securities Limited in Gujarat. These companies are no longer allowed to operate as NBFCs under the RBI Act 1934.
The RBI has also imposed a penalty of Rs 71.30 lakh on Mahindra & Mahindra Financial Limited for violating various rules. The company failed to disclose processing fees and other charges in some loan applications, did not provide loan details to some borrowers, and did not give some borrowers a last chance to repay their loans before the sale or auction of vehicles. The company also allotted multiple customer identification codes to some customers instead of a unique code.
In addition to the cancelled licenses and penalty, 11 NBFCs have surrendered their licenses voluntarily for various reasons. The RBI’s actions are aimed at ensuring that NBFCs operate in a fair and transparent manner, and that customers are protected from unfair practices.
The cancelled licenses and penalty imposed by the RBI will not affect the transactions taking place between customers and the companies. However, the companies that have had their licenses cancelled will no longer be able to operate as NBFCs, and customers will need to take their business to other licensed institutions. The RBI’s actions demonstrate its commitment to regulating the NBFC sector and ensuring that companies operate in compliance with the law. The central bank will continue to monitor the sector and take action against companies that fail to comply with regulations.
Empowering financially excluded communities through voice-enabled banking solutions designed for India’s low-literacy populations
India has an estimated 18 crore people who struggle to read and write in their native languages, despite high smartphone penetration. To bridge this gap, banks, startups, and government organizations are leveraging voice-based technology and Artificial Intelligence (AI). The central government’s New India Literacy Programme aims to target five crore non-literate individuals, while the Reserve Bank of India (RBI) has issued guidelines for setting up Financial Literacy Centres. However, voice-based technology has emerged as a more effective solution, particularly for the aspirational middle class.
Ujjivan, a microfinance company, partnered with Navana.ai to develop a voice-based app that uses icon-based interfaces and voice guidance to make it easy for low-literate customers to navigate. The app, launched in 2022, supports nine languages and has seen significant improvement in customer engagement. Customers can now log in to the app one to two times a month, compared to once every six months. The app’s voice-bot feature allows customers to speak into the app, and it comprehends their requests, guiding them to the relevant page.
The Indian government has also launched an AI-based translation platform, Bhashini, which enables real-time translation across 11 regional languages. The platform is being used for voice-based UPI payments, allowing users to transfer money by speaking in their local language. Bhashini has collaborated with the National Payments Corporation of India (NPCI) to enable voice-based UPI transactions and has also launched a Public Tech Platform for Frictionless Credit, which supports multiple languages.
The future of voice-first banking is promising, with industry leaders agreeing that it is breaking new ground. Bank outreach programs are evolving with AI-powered IVRS systems, which can recognize and respond in a customer’s regional language. Navana.ai has partnered with Bajaj Finserv, where its bot speaks six languages and closes Rs 150 crore in personal loans monthly. Large banks, such as HDFC, are also taking notice, with plans to enable voice in their mobile apps.
Voice-based banking services are expected to be highly personalized to the user, in terms of both their history with the business and interaction in their regional language. While testing remains a hurdle, adoption is expected to increase as the technology advances. For India’s low-literate customers, voice-based banking could finally mean having a voice in the banking system. The holy grail of full-fledged voice banking is not far off, with operators saying it’s only a matter of time before natural conversations in regional languages are fully integrated across all banking channels.
Alert: New ATM transaction fees kick in from May 1 – Check the updated charges for SBI, BOB, HDFC, and ICICI Bank here
The Reserve Bank of India (RBI) has announced that it will charge fees for ATM transactions exceeding the free limit, effective May 1, 2025. The move aims to cover the costs of owning and maintaining ATMs, as well as providing services to customers of other banks. Under the new rules, customers will be charged an additional Rs 2 per transaction if they exceed their free withdrawal limit. The charge per transaction will increase from Rs 21 to Rs 23.
The number of free ATM transactions varies depending on the type of bank and location. Customers will be allowed five free ATM transactions at their own bank’s ATMs per month, three free transactions at other bank ATMs in metro cities, and five free transactions at other bank ATMs in non-metro cities. However, there will be no changes to the free transaction limits for savings account holders across banks in India.
Banks such as HDFC, PNB, and IndusInd have notified their customers about the changes. According to HDFC Bank, the ATM transaction charge rate beyond free limits will be revised to Rs 23 + taxes, applicable only after the free limit has been exceeded. Non-financial transactions will remain free. PNB has also revised its charges, with customers being charged Rs 23 per financial transaction and Rs 11 per non-financial transaction (excluding GST) at other banks’ ATMs.
IndusInd Bank has informed its customers that they will be charged Rs 23 per transaction for ATM cash withdrawals made at non-IndusInd Bank ATMs beyond the free limits, effective May 1, 2025. The new charges are aimed at helping banks recover the costs of maintaining and operating ATMs, as well as providing services to customers of other banks. Customers are advised to be mindful of their ATM transactions to avoid incurring additional charges. The revised charges will apply to all banks, including SBI, BOB, and ICICI Bank, among others.
RBI announces massive bond-buying spree, set to acquire Rs 1.25 lakh crore worth of bonds in May – here are the top highlights
The Reserve Bank of India (RBI) has announced plans to purchase government securities worth Rs 1.25 lakh crore in May through open market operations (OMO). The purchases will be made in four tranches, with the first tranche of Rs 50,000 crore scheduled for May 6, followed by three more tranches of Rs 25,000 crore each on May 9, May 15, and May 19. The RBI will issue detailed instructions for each tranche separately.
This move is aimed at injecting liquidity into the system and ensuring orderly liquidity conditions. The central bank has been actively using the OMO route to manage liquidity conditions in the domestic banking system. In the previous month, the RBI had purchased government securities worth Rs 20,000 crore through a similar drive.
Open market operations involve the buying or selling of government securities by the RBI to manage the supply of money and adjust liquidity conditions in the market. The RBI uses this tool to adjust the rupee liquidity conditions on a durable basis. When there is excessive liquidity in the market, the RBI sells government securities, and when there is a shortage of liquidity, it buys government securities.
The RBI will accept electronic bids from eligible participants through its Core Banking Solution system, called E-Kuber, and the outcome of the auction will be announced on the same day. The central bank has reiterated its commitment to monitoring evolving liquidity and market conditions and taking necessary steps to ensure orderly liquidity conditions in the system.
The move is expected to have a positive impact on the bond market and the overall liquidity situation in the country. The RBI’s decision to purchase government securities is seen as a measure to infuse liquidity into the system and support economic growth. With the economy facing challenges due to the pandemic, the RBI’s move is expected to provide a boost to the market and help stabilize the financial system.
RBI Governor showcases India’s growth potential in the US, hailing the country as a ‘key partner in global prosperity’
Reserve Bank of India (RBI) Governor Sanjay Malhotra has highlighted India as a prime long-term investment destination, citing the country’s strong growth and stability. Speaking at the US-India Economic Forum in Washington, Malhotra emphasized that India’s relatively lower dependence on exports and strong domestic demand shield the economy from external shocks. Over the past four years, India has recorded an average annual growth rate of 8.2%, making it the fastest-growing major economy in the world.
The RBI has projected a growth rate of 6.5% for the current fiscal year, slightly lower than the previous estimate of 6.7%. However, this rate remains the highest among major economies. Malhotra attributed this growth to India’s policy continuity, financial stability, infrastructure development, digitization, demographic dividend, and manufacturing focus. He also highlighted the country’s foreign exchange reserves, which stand at $686 billion, covering over 11 months of imports and 96% of external debt.
Malhotra emphasized that India’s flexible inflation targeting framework, adopted in 2016, has enhanced policy predictability and anchored inflation expectations. The RBI has lowered the policy rate by 25 basis points for the second consecutive time, signaling an accommodative stance to support economic growth. The central bank expects inflation to be around 4% for the next 12 months, with a focus on supporting economic growth.
The RBI Governor invited investors to take advantage of India’s transparent, rule-based, and forward-looking policy ecosystem, which is ideal for long-term and productive investments. He emphasized that India is not just a destination for investment but also a partner in prosperity. With its strong growth prospects, stable economy, and favorable policy environment, India offers a compelling opportunity for investors seeking long-term value and returns.
Malhotra’s pitch for India as a long-term investment destination comes at a time when advanced economies are facing economic headwinds. The country’s robust growth, low inflation, and stable financial system make it an attractive option for investors. The RBI’s accommodative monetary policy stance and focus on supporting economic growth are also expected to boost investor confidence. Overall, Malhotra’s message highlights India’s potential as a key player in the global economy and a prime destination for long-term investments.
Senior Citizens Can Earn 9.1% Interest on Fixed Deposits: Check the Latest FD Rates from These Banks
For senior citizens seeking safe investment options, bank fixed deposits (FDs) can be an attractive choice, with some small finance banks offering interest rates up to 9.1% for a three-year tenure. These rates are applicable for FDs below Rs 3 crore and are particularly notable given that many banks are currently reducing their FD interest rates. The banks offering the highest interest rates for senior citizens include:
– Utkarsh Small Finance Bank at 9.1%
– Northeast Small Finance Bank at 9%
– Jana Small Finance Bank and Suryaodaya Small Finance Bank at 8.75%
– Unity Small Finance Bank at 8.65%
– Equitas Small Finance Bank at 8.25%
This presents a good opportunity for investment, especially considering the Reserve Bank of India’s (RBI) decision to cut the repo rate and the subsequent reduction in FD interest rates by major banks. However, it’s essential to exercise caution when investing in small finance banks. While deposits up to Rs 5 lakh are insured under the Deposit Insurance Credit Guarantee Corporation (DICGC), keeping investments within this limit ensures that your money can be returned in case of unforeseen events.
Moreover, senior citizens can avoid Tax Deducted at Source (TDS) on their FDs by submitting Form 15H if their total tax liability is zero. This form is valid as long as the taxpayer’s liability remains zero after all deductions, regardless of the total income exceeding Rs 3 lakh. As of the latest update on April 23, 2025, these rates and conditions offer senior citizens a chance to secure good returns safely for the next three years. It’s advisable to review the terms and conditions and consider financial advisors’ inputs before making any investment decisions.
Additional SGB Repayment: RBI Sets Premature Redemption Value at Rs 9,600 for Bonds Maturing on April 28
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.
The Reserve Bank of India (RBI) has imposed penalties on Indian Overseas Bank (IOB) and M&M Financial Services Ltd for failing to comply with regulatory requirements.
The Reserve Bank of India (RBI) has imposed monetary fines on Indian Overseas Bank (IOB) and Mahindra and Mahindra Financial Services Limited for non-compliance with RBI directives. The fines amount to Rs 63.60 lakh for IOB and Rs 71.30 lakh for Mahindra and Mahindra Financial Services Limited. The RBI periodically audits the accounts of banks and Non-Banking Finance Companies (NBFCs) and found that both IOB and Mahindra and Mahindra Financial Services Limited did not comply with certain directions.
IOB was fined for non-compliance with RBI directives on loans to the agricultural sector and Micro, Small, and Medium Enterprises (MSMEs). Specifically, the bank failed to obtain collateral security for agricultural loans up to Rs 1.60 lakh in certain cases and for loans up to Rs 10 lakh provided to certain Micro and Small Enterprise borrowers. In India, agricultural loans up to Rs 2 lakh are collateral-free, and loans up to Rs 10 lakhs are collateral-free in the MSME sector.
Mahindra and Mahindra Financial Services Limited was fined for non-disclosure of processing fees and other charges in certain loan application forms, failure to provide copies of loan agreements and loan details to certain borrowers, failure to provide a final chance to certain borrowers to repay loans before the sale/auction of vehicles, and issuing multiple customer identification codes to certain customers instead of a Unique Customer Identification Code (UCIC).
IOB is a public sector bank founded in 1937 and nationalized in 1969. It has overseas branches and offices in several countries, including Singapore, Hong Kong, Thailand, and Sri Lanka. Mahindra and Mahindra Financial Services Limited, on the other hand, is a non-banking financial company established in 1991 and part of the Mahindra Group. It offers various financial services, including vehicle loans, SME finance, and personal loans.
The fines imposed by the RBI are a reminder of the importance of compliance with regulatory directives. The RBI’s actions aim to protect the interests of borrowers and ensure that financial institutions operate in a fair and transparent manner. The fines also highlight the need for banks and NBFCs to review their internal processes and ensure that they are in compliance with regulatory requirements.
The Reserve Bank of India (RBI) has slapped a penalty on Indian Bank and Mahindra & Mahindra Financial Services
The Reserve Bank of India (RBI) has imposed penalties on two financial institutions, Indian Bank and Mahindra & Mahindra Financial Services, for non-compliance with regulatory requirements. Indian Bank has been fined Rs 1.61 crore for violating certain provisions of the Banking Regulation Act and failing to comply with directions related to interest rates on advances, the Kisan Credit Card (KCC) Scheme, and lending to the Micro, Small and Medium Enterprises (MSME) sector.
Mahindra & Mahindra Financial Services, on the other hand, has been penalized Rs 71.30 lakh for non-compliance with provisions related to non-banking financial companies and Know Your Customer (KYC) directions. The RBI emphasized that the penalties are not intended to question the validity of any transactions or agreements entered into by the entities with their customers, but rather to address deficiencies in regulatory compliance.
The penalties were imposed after the RBI conducted inspections and found that both institutions had failed to adhere to certain regulatory requirements. The RBI stated that the penalties are based on the deficiencies found during the inspections and are intended to ensure that financial institutions comply with regulatory requirements and maintain high standards of governance and customer protection.
The RBI’s actions serve as a reminder to financial institutions of the importance of complying with regulatory requirements and maintaining high standards of governance and customer protection. The penalties imposed on Indian Bank and Mahindra & Mahindra Financial Services demonstrate the RBI’s commitment to enforcing regulatory compliance and ensuring that financial institutions operate in a fair and transparent manner.
The penalties are also intended to promote a culture of compliance among financial institutions and to prevent similar non-compliances in the future. By imposing penalties, the RBI aims to ensure that financial institutions take regulatory requirements seriously and implement effective systems and processes to prevent non-compliances. Overall, the RBI’s actions are aimed at maintaining the stability and integrity of the financial system and protecting the interests of customers.
Canara Bank Cuts Lending Rates: Home and Auto Loan Borrowers to Benefit from Reduced Interest Rates | Latest Personal Finance Updates
In a bid to ease the financial burden on its customers, Canara Bank has announced a reduction in its lending rates. The bank has lowered its Repo Linked Lending Rate (RLLR) by 25 basis points, following the Reserve Bank of India’s (RBI) recent decision to slash key interest rates. This move is expected to bring direct benefits to borrowers by making loans more affordable. The revised rates will be effective from April 12, 2025.
With the reduced RLLR, the minimum rate of interest for all loans has been lowered. The popular loan products, such as housing loans and vehicle loans, will now start at 7.90% per annum and 8.20% per annum, respectively. This rate revision is expected to lower Equated Monthly Installments (EMIs) for both existing and new borrowers, making it more affordable for customers to purchase a! house or vehicle.
The RBI had earlier announced a reduction in interest rates for the second time, bringing massive relief to home and auto loan borrowers. The six-member Monetary Policy Committee (MPC) meeting, led by new RBI Governor Sanjay Malhotra, unanimously decided to slash the policy rate by 25 basis points to 6.25%. This move is seen as a positive step towards making credit more accessible and helping customers achieve their financial goals.
Canara Bank has stated that this move reaffirms its commitment to making credit more accessible and ensuring timely transmission of policy rate cuts. The bank continues to align its offerings with customer needs, making it easier for them to move forward with their dreams and financial goals. With the reduced lending rates, Canara Bank aims to provide relief to its customers and support their financial aspirations. Overall, this move is expected to have a positive impact on the banking sector and the economy as a whole.
RBI MPC minutes strike a decidedly dovish note, with economic growth now top priority in policy decisions, according to a UBI Report
The minutes of the Monetary Policy Committee (MPC) meeting, held on April 7-9, reflect a dovish tone, with growth taking center stage in the Reserve Bank of India’s (RBI) policy approach. The MPC appears more confident that inflation will move towards the 4% target, allowing it to shift focus towards supporting economic growth. The RBI’s decision to change its monetary policy stance to “accommodative” and cut interest rates by 25 basis points (bps) has been seen as a “double booster shot” for the economy. This combination implies that interest rates will likely remain low or may even decrease further, making borrowing cheaper and supporting economic activity.
All MPC members, except one, agreed on the rate cut and shift in stance. The accommodative stance signals that a rate hike is unlikely for now, and the RBI can still pause if economic conditions demand it. The downward revision in the RBI’s inflation forecast for FY26 by 20 bps has created additional room for monetary easing in the future. The RBI has projected India’s GDP growth at 6.5% for FY26, but Union Bank of India feels this is optimistic and pegs growth closer to 6.0%, citing weak capital expenditure sentiment and rising global uncertainties.
Looking ahead, the report expects the RBI to cut the repo rate by another 50 bps, bringing it down to a terminal rate of 5.5%. This projection is based on an assumption of a neutral real interest rate of 1.5%. The tone of the minutes and the Union Bank report suggests that the central bank is prioritizing growth as inflation risks appear to be easing. The RBI’s focus on growth is likely to continue, with the possibility of further rate cuts in the future. The accommodative stance and low interest rates are expected to support economic activity, making borrowing cheaper and boosting growth.
The shift in the RBI’s policy approach is significant, as it indicates a change in the central bank’s priorities. With inflation risks easing, the RBI is now focusing on supporting economic growth, which is likely to have a positive impact on the economy. The report’s expectations of further rate cuts and the RBI’s accommodative stance suggest that the central bank is committed to supporting growth and stimulating economic activity. Overall, the minutes of the MPC meeting and the Union Bank report suggest that the RBI is taking a dovish approach, prioritizing growth and seeking to support the economy through monetary policy.
Boost your savings! Certain banks are now offering higher FD interest rates of up to 9.10% – find out which banks are leading the pack!
The recent repo rate cut by the Reserve Bank of India (RBI) has led to a reduction in fixed deposit (FD) interest rates by big banks such as SBI, HDFC, ICICI, and Yes Bank. However, some small finance banks are still offering attractive interest rates of up to 9.10% to senior citizens. This presents a good opportunity for senior citizens to invest in fixed deposits and earn risk-free returns.
Small finance banks such as Unity Small Finance Bank, Suryoday Small Finance Bank, Jana Small Finance Bank, Equitas Small Finance Bank, and AU Small Finance Bank are offering high interest rates on FDs. For instance, Unity Small Finance Bank is offering 9.10% interest on a 1001-day deposit, while Suryoday Small Finance Bank is offering 9.10% interest on a 5-year deposit. Similarly, Jana Small Finance Bank is offering 8.75% interest on a 2-3 year deposit, and Equitas Small Finance Bank is offering 8.55% interest on an 888-day deposit.
Senior citizens can benefit from these schemes as they offer special interest rates that are higher than what is being offered by big banks. However, before investing, it is essential to ensure that the bank is authorized by the RBI and has a Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance cover of up to Rs 5 lakh. Additionally, it is crucial to understand that these special interest rates may be for a limited period, and it is necessary to thoroughly understand all the rules and regulations before investing.
In conclusion, small finance banks are offering attractive interest rates on fixed deposits, providing senior citizens with an opportunity to earn high returns on their investments. With interest rates ranging from 8% to 9.10%, these schemes are an excellent option for those looking for risk-free returns. By doing their research and ensuring that the bank is reputable and offers the necessary insurance cover, senior citizens can take advantage of these high-interest FD schemes and secure their financial future.
Reserve Bank of India Relaxes Export Regulations for Bharat Mart in UAE: Rediff Money News
The Reserve Bank of India (RBI) has relaxed norms for Indian exporters using Bharat Mart, a UAE-based marketplace, to facilitate easier exports and repatriation of funds. Bharat Mart is a multimodal logistics network-based marketplace that provides Indian traders, exporters, and manufacturers access to global markets. The relaxation of norms aims to promote Indian exports and enhance the country’s trade competitiveness.
According to the RBI circular, banks are now allowed to permit exporters to realize and repatriate the full export value of goods sold through Bharat Mart within nine months from the date of sale. This extended time frame will enable exporters to manage their working capital requirements more effectively and reduce the risk of non-repatriation of export proceeds.
Additionally, the RBI has eased the process for Indian exporters to set up and operate warehouses in Bharat Mart. Exporters can now open or hire a warehouse in Bharat Mart without any pre-conditions, provided they have a valid Importer Exporter Code (IEC). Banks have been instructed to verify the reasonableness of the exporter’s proposal before allowing the setup of the warehouse.
The relaxed norms also apply to remittances made by Indian exporters for initial and recurring expenses related to setting up and operating their offices in Bharat Mart. This will enable exporters to establish a presence in the UAE-based marketplace and cater to the demands of global customers more effectively.
The RBI’s move is expected to boost Indian exports and enhance the country’s trade competitiveness in the global market. By facilitating easier access to international markets and providing a more favorable business environment, the government aims to increase export volumes and contribute to the country’s economic growth. The relaxation of norms for Bharat Mart is a significant step towards achieving this goal and is expected to benefit Indian exporters, manufacturers, and traders.
Maximize Your Returns: Compare the 444-Day Special Fixed Deposits of SBI, IDBI, BoB, and Punjab & Sindh Bank to Find Out Which One Offers the Highest Interest on Your Rs 6 Lakh Investment
Several banks in India have introduced or extended special fixed deposit (FD) schemes, offering investors attractive interest rates for specific durations. These schemes are similar to regular term deposits but are available only for a limited time and often come with enhanced interest rates. Recently, the Reserve Bank of India (RBI) has cut the repo rate by 25 basis points, prompting banks to adjust their interest rates downward.
Punjab & Sind Bank has extended its special tenure fixed deposit scheme until June 30, 2025, and has also revised its interest rates. IDBI Bank has revamped its Utsav Deposit Scheme, discontinuing certain tenures and implementing interest rate cuts across key tenures. The State Bank of India (SBI) has relaunched its Amrit Vrishti 444-day FD at a reduced interest rate, giving investors another opportunity to lock in returns on a medium-term deposit.
Bank of Baroda (BoB) has introduced a new deposit scheme called the bob Square Drive Deposit Scheme, replacing its earlier Utsav Deposit Scheme. The 444-day FD under this new plan offers revised interest rates for both general and senior citizens. These changes are effective from April 7, 2025. The interest rates offered by these banks are subject to change and may not be the same as those offered by other banks.
It’s essential for investors to do their due diligence and consult with a financial expert before making any investment decisions. The calculations provided are projections and not investment advice. Investors should carefully review the terms and conditions of each scheme, including the interest rates, tenure, and any applicable penalties for early withdrawal.
Overall, the special FD schemes offered by these banks provide investors with an opportunity to earn attractive interest rates on their deposits. However, investors should be aware of the risks and rewards associated with these schemes and make informed decisions based on their individual financial goals and risk tolerance. By doing so, investors can make the most of these special FD schemes and achieve their financial objectives.
Banks’ Q4 earnings preview: HDFC, ICICI, and SBI to face subdued profits as NIMs come under pressure – Mint
The article previews the fourth-quarter results of Indian banks, including HDFC Bank, ICICI Bank, and State Bank of India (SBI). Analysts expect these lenders to report muted earnings due to pressure on their net interest margins (NIMs).
The main reasons for the expected decline in earnings are:
1. Deceleration in loan growth: Credit growth, which has been the primary driver of earnings for Indian banks, has slowed down in recent quarters. This has reduced the banks’ ability to grow their interest income.
2. Pressure on NIMs: The Reserve Bank of India’s (RBI) recent rate cuts have reduced the banks’ interest margins. Although the banks have managed to maintain their NIMs so far, analysts expect further pressure in the fourth quarter.
3. Higher provisioning: With the economy facing stress, the increased provisioning for bad loans is expected to eat into the banks’ profits.
4. Weakness in corporate credit: The pandemic has led to a decline in corporate credit, which has also affected the banks’ earnings.
According to analysts, HDFC Bank’s net interest income (NII) is expected to decline by around 7-8% year-on-year (YoY) in the fourth quarter. ICICI Bank’s NII is expected to decline by around 6-7% YoY. SBI’s NII is expected to decline by around 5-6% YoY.
The banks may try to make up for the decline in NII by increasing their non-interest income, such as fees and commissions. However, this strategy may not be enough to offset the decline in NII.
To mitigate the impact of declining NIMs, the banks may focus on reducing their operating expenses. HDFC Bank and ICICI Bank have already taken steps to reduce their expenses in recent quarters.
Despite the expected decline in earnings, the Indian banking system is expected to remain stable, with the banks’ capital adequacy ratio (CAR) remaining above the required level.
In conclusion, the article suggests that Indian banks, including HDFC Bank, ICICI Bank, and SBI, are likely to report muted earnings in the fourth quarter due to pressure on their NIMs. The banks will need to focus on other revenue streams and cost reductions to mitigate the impact of declining interest income.
Why are savings accounts now yielding higher interest rates, especially following the RBI’s latest rate cut? Find out the top banks offering the best returns – Money News
The Reserve Bank of India (RBI) has slashed its repo rate by 50 basis points, marking the end of the high interest rate regime in the country. This move has led to a cascade effect, with several banks, including public and private sector lenders, cutting their lending rates and adjusting their fixed deposit rates. As a result, interest rates on savings accounts have also been reduced.
Public sector banks, such as State Bank of India, Punjab National Bank, and Bank of Baroda, are currently offering interest rates ranging from 2.7% to 2.9% on savings accounts. Private sector banks, on the other hand, are offering slightly better rates, ranging from 2.75% to 3.25%.
The RBI’s focus is now on accelerating economic growth, and if retail inflation remains stable, it may cut rates further in the future. This could have a direct impact on fixed deposits and savings accounts, with banks potentially paying lower interest rates.
Adhil Shetty, CEO of BankBazaar, suggests that depositors should consider investing in other instruments, such as fixed deposits, mutual funds, or government savings schemes, to earn higher returns. In the current environment, earning interest from a savings account alone may not be sufficient.
The trend of lower interest rates is expected to continue, as the RBI prioritizes growth support and inflation remains within its comfort zone. For depositors, this may mean lower returns on traditional deposits, but it could also lead to cheaper borrowing and encourage consumption and investment.
After RBI’s Interim Repo Rate Cut, Banks Begin Reducing Lending Rates
In response to the Reserve Bank of India’s (RBI) 25 basis point reduction in the repo rate on April 9, several banks have begun to cut their lending rates, passing on the benefit to their borrowers. Indian Bank was the first to announce a reduction in its repo-linked benchmark lending rate from 9.05% to 8.70%, effective from April 11. Canara Bank is likely to follow suit, with a source indicating that the bank may reduce its RBLR by 25 basis points in a near future meeting. Indian Overseas Bank has already decided to reduce its RBLR by 25 basis points to 8.85%, effective from April 12. This rate cut is expected to lower borrowing costs for customers with loans linked to RBLR, including home loans and business loans. As a result, customers may see reduced equated monthly installments (EMIs) or shorter loan tenures.
The RBI’s decision to cut the repo rate is expected to lead to surplus liquidity, facilitating faster transmission of policy rate cuts. This is in contrast to the February rate cut, when no bank passed on the benefit to customers. Non-banking financial companies (NBFCs) are also considering reducing their lending rates, with Hinduja Leyland Finance’s MD and CEO, Sachin Pillai, stating that the RBI’s move will create opportunities for NBFCs to reduce borrowing costs and pass on benefits to customers in vehicle financing, affordable housing finance, and small and medium enterprise (SME) financing.
The cumulative reduction in lending rates could be up to 50 basis points, with the RBI hinting at another potential rate cut by the end of the fiscal year. The RBI’s Asset Liability Management Committee (ALCO) is expected to meet soon, and a 50 basis point rate cut is possible. This could further reduce borrowing costs for customers, making it a positive move for the economy. The rate cut is a welcome development, especially for sectors that have high credit sensitivity, such as vehicle financing, affordable housing finance, and SME financing. Overall, the move is expected to benefit customers and stimulate economic growth by making borrowing cheaper and more accessible.
State Bank of India and two other public sector banks slash loan rates by 25 basis points, Finance Industry Latest Updates
The State Bank of India (SBI), Bank of India, and Bank of Maharashtra have announced a reduction in their lending rates by 25 basis points (bps) following the Reserve Bank of India’s (RBI) decision to lower the repo rate last week. This move aims to make loans cheaper for both existing and new borrowers.
SBI’s Repo Linked Lending Rate (RLLR) will now be 8.25%, and its External Benchmark Based Lending Rate (EBLR) will be 8.65%. Bank of India has reduced its home loan rate to 7.9% per annum based on the CIBIL score. Additionally, it has lowered interest rates on select existing retail loan products, including vehicle loans, personal loans, loan against property, education loans, and Star reverse mortgage loans.
Bank of Maharashtra has also cut its RLLR to 8.80%, benefiting customers availing loans for homes, cars, education, gold, and other retail loan products. The bank’s home loan will start from 7.85% per annum, and car loans will be priced from 8.20% per annum.
These rate cuts follow the RBI’s Monetary Policy Committee’s decision to reduce the repo rate by 25 bps to 6% on April 9, its second consecutive reduction. The total rate cut is now 50 bps over the past two months. These reductions are expected to make borrowing more affordable for individuals and businesses, boosting economic growth.
Bank of Maharashtra slashes retail loan rates by 0.25% to boost customer affordability
The Bank of Maharashtra (BoM), a state-owned bank, has announced a reduction in its lending rate linked to the repo rate by 25 basis points. This move is in line with the Reserve Bank of India’s (RBI) recent decision to slash key interest rates by 25 basis points to support economic growth. As a result, BoM’s repo-linked lending rate (RLLR) has been reduced from 9.05% to 8.80%.
This rate reduction will make loans more affordable for BoM’s customers, including those availing of home, car, education, and gold loans. The bank’s home loan rates will start from 7.85% per annum, while car loans will be priced from 8.20% per annum, making them among the lowest in the banking industry.
Indian Overseas Bank (IOB), another public sector lender, has also cut its benchmark lending rate in line with the repo rate reduction. IOB’s RLLR has been reduced from 9.10% to 8.85%. Both banks have decided to pass on the rate cut to their customers, making loans more accessible and affordable.
This move is expected to boost economic growth, as lower interest rates make it easier for individuals and businesses to access credit. The rate cuts are also seen as a response to the US imposing reciprocal tariffs, which could impact India’s economic growth. By reducing interest rates, the RBI is trying to support growth and prevent a slowdown.
IOB Loans now feature an updated interest rate
Indian Overseas Bank (IOB) has announced a reduction of 0.25% in its repo-linked lending rate (RLLR) from 9.10% to 8.85%, providing a significant relief to home buyers. This move comes after the Reserve Bank of India (RBI) recently reduced its policy repo rate to support the economy.
The reduced RLLR is expected to result in a lower effective interest rate on home loans, making it more affordable for individuals to purchase or construct homes. The decrease in interest rate will also lead to lower Equated Monthly Installments (EMIs) for home loan borrowers, making it a welcome news for those looking to purchase a property.
IOB’s decision is a positive development in the Indian banking sector, as it indicates that lenders are willing to pass on the benefits of RBI’s rate cuts to customers. The reduced interest rate is expected to boost demand for housing loans, which has been a major constraint in the Indian economy.
The RBI’s move to reduce the policy repo rate is aimed at stimulating economic growth, and IOB’s decision to reduce its RLLR is a response to this. The reduced interest rate will also help to improve affordability for home buyers, which has been a concern in the Indian real estate sector.
In addition to the reduced RLLR, IOB has also revised its home loan interest rate downward by 0.25%. This means that borrowers will now get a better deal on their home loans, with lower EMIs and a more manageable debt burden.
Overall, IOB’s decision to reduce its RLLR and home loan interest rate is a positive development for home buyers in India. The reduced interest rate will make it more affordable for individuals to purchase or construct homes, and is expected to boost demand for housing loans. The move is also in line with the RBI’s efforts to stimulate economic growth, and is a welcome relief for home buyers in India.
Indian Overseas Bank Cuts Repo-Linked Lending Rate to 8.85% Post RBI Rate Reduction
Indian Overseas Bank (IOB) has announced a 25 basis points reduction in its Repo Linked Lending Rate (RLLR), effective immediately. The new rate stands at 8.85%, down from 9.10%. This move comes after the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) decision to reduce the Policy Repo Rate from 6.25% to 6%. The rate cut is a response to rising global economic uncertainties, particularly the United States’ announcement of 27% tariffs on Indian imports. The bank’s Asset Liability Management Committee (ALCO) convened on April 11 and decided to pass on the benefit of the reduced policy rate to customers. The revised rate structure aims to enhance credit affordability and encourage economic activity during a time of global economic flux.
IOB’s decision aligns with its policy of promptly responding to monetary policy changes and supporting borrowers with reduced interest burdens. The bank’s move is a step towards easing the financial burden on customers and encouraging them to borrow at a lower rate of interest. This development is significant, as it comes amidst global economic uncertainties and a potential slowdown in economic growth.
The reduction in RLLR will have a cascading effect on other lending rates, such as the Marginal Cost of Funds-Based Lending Rate (MCLR), which is used to determine the interest rates on home and other loans. This move is expected to benefit consumers and corporates alike, making borrowing more affordable and sustainable. IOB’s decision to pass on the benefit of the rate cut to customers is a positive step, as it demonstrates the bank’s commitment to supporting economic growth and promoting credit accessibility.
IOB’s announcement is the latest in a series of rate cuts by public sector lenders in India. The bank joins other state-owned banks such as Bank of Baroda (BoB), which recently cut its lending rates by 25 basis points. The move is seen as a response to the RBI’s rate cut and reflects the bank’s focus on supporting economic growth and promoting credit availability. The rate reduction will also help to increase loan disbursements and boost economic activity, thereby supporting India’s growth momentum. Overall, IOB’s decision to reduce its RLLR is a welcome move, which will benefit customers and contribute to the overall economic well-being of the country.
Outshining ICICI Bank and Axis Bank, HDFC Bank’s interest rates are the lowest – See the latest rates from India’s top private lender – Personal Finance
HDFC Bank, India’s second-largest bank by assets, has reduced its interest rate on savings accounts by 25 basis points to 2.75%. This reduction is effective from April 12 and applies to savings accounts with balances less than Rs 50 lakh, earning an interest rate of 2.75% per annum. Accounts with balances over Rs 50 lakh will earn an interest rate of 3.25% per annum. This move comes after the Reserve Bank of India (RBI) announced a second consecutive benchmark repo rate cut, which has shifted its monetary policy stance from Neutral to Accommodative.
The reduction in HDFC Bank’s interest rate brings it closer to public sector lenders like State Bank of India and Punjab National Bank, which offer a minimum interest rate of 2.70% on savings account deposits since 2022. HDFC Bank’s interest rate is now on par with Bank of Baroda, which offers an interest rate of 2.75% on deposits up to Rs 50 crore.
In comparison, HDFC Bank’s peers, ICICI Bank and Axis Bank, are currently offering a minimum interest rate of 3% on balances below Rs 50 lakhs. The reduction in HDFC Bank’s interest rate is likely a response to the changing economic environment and the RBI’s move to prioritize growth over inflation control.
Indian Overseas Bank slashes its repo-linked lending rate by 25 basis points
The Indian Overseas Bank has announced a reduction in its repo-linked lending rate by 25 basis points, effective immediately. The bank made this announcement on Saturday following a decision by the Reserve Bank of India (RBI) to cut the policy repo rate from 6.25% to 6%. The RBI’s rate cut is seen as a response to the uncertain economic environment, particularly the imposition of a 27% tariff on Indian imports to the US by US President Donald Trump.
The disclaimer said the decision to reduce the repo link lending rate was made by the Asset Liability Management Committee (ALCO) on April 11. The ALCO will now set the repo-linked lending rate of the bank at 8.85%, down from 9.10%. This change is meant to align with the RBI’s new repo rate.
The impact of the change will be seen immediately. This move is in line with the RBI’s goal to lower interest rates to boost economic growth and support a slow-down in industrial output. The RBI aims to stimulate growth by adjusting the key interest rate that banks use to borrow and lend money. The outcome of this adjustment is expected to potentially lead to a drop in lending rates for customers, making it easier for people to get loans and credit.
The change in interest rates will also help the real sector of the economy by addressing liquidity shortages in the key segments. It also demonstrates the government’s efforts to sent capital interest flow to support growth. The policy change is expected to chart a beneficial route for the economy.
According to the bank’s previous records, Indian Overseas Bank is poised to tap benefits stemming from fresh cash flows worsened by the downtrend in interest rates.
India’s forex reserves touch a record high of $676 billion, according to the RBI.
India’s foreign exchange reserves have witnessed a significant surge, jumping by $10.872 billion to $676.26 billion in the week ending April 4, marking the fifth consecutive week of gains. This growth is a stark contrast to the previous trend, where reserves had been slipping for about four months, reaching a mere 11-month low. The latest gains have brought the reserves up from their all-time low, indicating a strengthening of the Indian economy. The Reserve Bank of India (RBI) has intervened to prevent a sharp depreciation of the Rupee, which has fallen to an all-time low against the US dollar.
The RBI’s foreign currency assets, the largest component of foreign exchange reserves, stood at $574.08 billion, while gold reserves totaled $79.36 billion. The reserves are sufficient to cover approximately 10-11 months of projected imports. In 2023, India added $58 billion to its foreign exchange reserves, reversing the cumulative decline of $71 billion in 2022. In 2024, the reserves have risen by over $20 billion. Foreign exchange reserves are assets held by a nation’s central bank or monetary authority, primarily in reserve currencies such as the US Dollar, with smaller portions in the Euro, Japanese Yen, and Pound Sterling.
The RBI actively manages liquidity, including selling dollars, to prevent steep Rupee depreciation. It strategically buys dollars when the Rupee is strong and sells when it weakens. The RBI’s interventions aim to maintain a stable exchange rate, ensuring a stable economy. Despite fluctuations in reserves, India remains confident in its economic prospects, with foreign exchange reserves serving as a safeguard against external shocks.
The latest surge in foreign exchange reserves suggests that the RBI’s efforts are yielding positive results, indicating a strong and stable economy. The RBI’s ability to manage foreign exchange reserves effectively has enabled India to maintain a robust foreign currency position, which will help in maintaining financial stability and preserving economic stability. As a result, India is better equipped to face external challenges and can continue to maintain a stable exchange rate. The development is a positive sign for the Indian economy, which is expected to continue its growth trajectory in the coming years.
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The Reserve Bank of India (RBI) has announced a three-day holiday period for banks across India, starting from April 12 to April 14. This means that bank branches will be closed for three consecutive days, which could have an impact on various branch-related services.
It is essential for bank customers to plan their banking activities accordingly and make note of the holiday schedule. The holiday period is likely to affect various services such as cash deposits, withdrawals, and other transactions that require bank branch visits.
Bank customers are advised to check the holiday schedule in advance to avoid any inconvenience. It is also recommended to use alternative channels such as online banking, mobile banking, or ATMs to conduct their banking transactions.
The RBI holiday schedule is subject to change, and customers should check the RBI website or their bank’s official website for the latest information. Additionally, customers should verify the holiday schedule for specific bank branches before planning their visit.
In conclusion, the three-day holiday period for banks starting from April 12 to April 14 is an essential reminder for bank customers to plan their banking activities accordingly. By being aware of the holiday schedule, customers can avoid any inconvenience and ensure a smooth banking experience.
HC Upholds Rs 16,261 Cr GST Bill Against J&K Bank – Kashmir Observer
The High Court of Jammu and Kashmir and Ladakh has temporarily halted the recovery of a Rs 16,261 crore demand and penalty under the Goods and Services Tax (GST) regime against Jammu and Kashmir Bank. The bank had filed a writ petition challenging the demand notice issued by the Additional cum Joint Commissioner, Central GST, which the bank claimed arose from a misunderstanding of its internal financial practices.
The bank, represented by advocate Tasaduq H Khawaja, argued that its internal financial transactions, including the transfer of funds between branches and the corporate office, were not taxable under the GST Act. The bank stated that these transactions were internal accounting measures and did not constitute taxable services.
The bank’s counsel also referred to guidelines issued by the Reserve Bank of India (RBI) in 1999 on risk and fund management, which highlighted the use of the Transfer Pricing Mechanism (TPM) across the banking industry in India. The bank argued that the demand and penalty amount were based on a flawed interpretation of financial procedures.
The court issued an interim stay on the GST recovery process, citing serious legal issues raised by the case. The matter has been listed for the next hearing on May 7, 2025. The union government, represented by advocate T.M. Shamshi, sought time to file a reply.
The court’s decision provides a temporary reprieve to the bank, which is facing a significant demand and penalty. The case highlights the complexities and intricacies of the GST regime, and the court’s consideration of the bank’s arguments will have implications for the banking industry in India.
Keki Mistry urges investors to lock in long-term gains, touting India’s resilient story as a prime opportunity
Despite the relief emanating from the US’s decision to withhold tariffs, veteran banker Keki Mistry believes that India’s economy remains strong and robust. Mistry, who sits on the boards of several leading institutions, including HDFC Bank, believes that the impact of trade tariffs on India would be minimal due to the country’s relatively small export sector. He notes that exports to the US account for only 17% of India’s total exports, which means that the direct impact on India’s GDP would be limited to 40-50 basis points.
Mistry further argues that the fear surrounding trade tariffs has been “overblown” and that India’s economy should be evaluated on a relative basis, rather than in isolation. He points out that India’s GDP is comprised of multiple sectors, including services, manufacturing, and agriculture, and that the exports component is relatively small. Additionally, he cites the decline in oil prices as a positive factor, which would offset some of the potential negative impact of tariffs. He also notes that the Reserve Bank of India (RBI) has infused liquidity into the system, which would add further to India’s economic growth.
Mistry believes that long-term investors should view the current market volatility as a buying opportunity, as the tariffs are a short-term issue. He estimates that the net impact of tariffs on India’s GDP would be around 25-30 basis points, which is a manageable level. Overall, Mistry’s assessment is that India’s economy remains strong and resilient, and that the concerns surrounding trade tariffs have been exaggerated.
A boost to the masses, four major government-backed banks slash interest rates, bringing welcome respite to the common folk.
The Reserve Bank of India (RBI) has cut interest rates for the second consecutive time, and as a result, four government banks have reduced their interest rates. The affected banks include Punjab National Bank, Bank of India, Indian Bank, and UCO Bank. This decision will benefit both existing and new borrowers, providing relief to the common man.
Bank of India has reduced its repo-linked benchmark lending rate (RBLR) from 9.10% to 8.85%, effective from April 9. Indian Bank has cut its RBLR by 35 basis points to 8.70%, effective from April 11. Punjab National Bank has revised its RBLR from 9.10% to 8.85%, effective from April 10. UCO Bank has reduced its lending rate to 8.8%, effective from April 10.
The RBI’s decision has a direct impact on interest rates for all types of loans, including home loans, car loans, and personal loans. The central bank has changed its monetary policy stance from “neutral” to “accommodative”, indicating that it may continue to maintain a soft stance in the coming times. This decision is expected to provide relief to the common man, making it easier for them to borrow money.
The RBI has also lowered its GDP growth forecast for FY26 by 20 basis points to 6.5%. The growth forecast for the first quarter of FY26 is 6.5%, 6.7% for the second quarter, 6.6% for the third quarter, and 6.3% for the fourth quarter.
This reduction in interest rates is a positive development for the economy, as it will make borrowing cheaper and stimulate economic growth. The four government banks that have reduced their interest rates are expected to pass on these benefits to their customers, making it easier for them to borrow money and invest in the economy. Overall, this decision is expected to have a positive impact on the economy, providing relief to borrowers and stimulating economic growth.
Indian Overseas Bank slashes lending rates on repo-linked loans, paving the way for borrowers to reap the benefits
Indian Overseas Bank (IOB) has announced a reduction in its External Benchmark Lending Rate (EBLR) by 25 basis points, effective April 12, 2025. This decision comes in response to the Reserve Bank of India’s (RBI) Monetary Policy Committee’s (MPC) announcement of a 25 bps cut in the repo rate, which occurred between April 7 and 9, 2025. The RBI’s repo rate has been adjusted to 6.00% from 6.25%. The reduction will boost borrowers with loans linked to the repo rate, leading to lower Equated Monthly Installments (EMIs) for home loans, auto loans, and other credit facilities.
IOB’s Assets and Liabilities Management Committee (ALCO) reviewed the RBI’s move before approving the rate revision. The Repo Linked Lending Rate (RLLR) will now stand at 8.85% down from the previous 9.10%. This reduction is expected to ease the financial burden on existing and new borrowers, making credit more affordable. This move is an effort by IOB to pass the benefits of RBI’s policy easing on to its customers, potentially contributing to economic growth and stimulating borrowing activities. The 25 basis points cut in the EBLR is likely to prompt other banks to adjust their lending rates accordingly.
Bank of Baroda, Indian Bank, and PNB Cut Loan Interest Rates in Response to RBI’s Repo Rate Reduction
The Reserve Bank of India (RBI) recently cut the repo rate, leading to expectations of cheaper loans for account holders. Now, three major government banks – Bank of Baroda, Indian Bank, and Punjab National Bank – have announced a reduction in interest rates on their loans. These measures aim to provide relief to common customers by making loans cheaper and decreasing the burden of Equated Monthly Installments (EMIs).
Indian Bank, based in Chennai, has cut its repo benchmark rate and repo-linked benchmark lending rate from April 11, 2025. The repo benchmark rate has been reduced from 6.25% to 6.00%, while the repo-linked benchmark lending rate has come down from 8.70% to 8.40%. The bank’s decision aligns with RBI’s policy of providing loans at affordable interest rates. Punjab National Bank, the country’s second-largest bank, has reduced its repo-linked lending rate by 25 basis points from 9.10% to 8.85%. Bank of Baroda has also cut its interest rate on loans by 0.25% to provide convenience to customers.
These interest rate reductions will primarily benefit customers whose loans are linked to the RBI’s repo rate. Home loan, personal loan, and auto loan holders can expect significant relief as a result of the RBI’s order. Other banks may follow suit, further decreasing loan rates and making loans even cheaper for consumers.
Bank of Baroda lowers interest rates by 25 basis points, benefiting its customers
The State-owned Bank of Baroda (BoB) has announced that it will immediately transmit the Reserve Bank of India’s (RBI) latest policy rate cut of 25 basis points to its customers. This means that the bank’s external benchmark-linked lending rates for retail and MSME (Micro, Small and Medium Enterprises) loans will be reduced by 25 basis points. This decision aims to ensure that customers benefit quickly from the RBI’s monetary policy move.
The RBI had slashed key interest rates by 25 basis points for the second time in a row to support economic growth, which is facing threats from reciprocal tariffs imposed by the US. However, the Bank of Baroda has left the marginal cost of funds-based lending rate (MCLR) unchanged. The benchmark one-year tenor MCLR, which is used to price most consumer loans such as auto and personal loans, has been kept unchanged at 9%.
The reduction in lending rates is expected to benefit customers by making borrowing costs more affordable. This move is likely to have a positive impact on the economy, as it will increase consumer and business confidence, leading to increased spending and investment. The Bank of Baroda’s decision to immediately transmit the RBI’s policy rate cut shows its commitment to passing on the benefits of monetary policy to its customers.
Overall, the Bank of Baroda’s announcement is a positive development for borrowers, particularly in the retail and MSME segments, who are likely to benefit from the reduced interest rates. The move is also expected to support economic growth by increasing the availability of credit and making borrowing more affordable.
NCLAT Gives Green Light for Banks to Pursue Legal Action Against Former IL&FS Directors
The National Company Law Appellate Tribunal (NCLAT) has passed an order allowing state-owned Canara Bank and Indian Bank to proceed with declaring former directors of Infrastructure Leasing & Financial Services (IL&FS) as willful defaulters, but only if they are not part of the new board. The tribunal granted leave to the banks to make an application against the former directors who were not part of the new board, which was constituted by the government in October 2018.
The NCLAT bench, comprising Chairperson Justice Ashok Bhushan and Member Barun Mitra, said that the protection extended to the former directors would not extend to those who are part of the new board. The tribunal also protected Professional Directors who were reappointed in IL&FS and its subsidiaries after October 1, 2018.
The crisis in IL&FS was triggered by a massive debt of Rs90,000 crore, which sent shockwaves through the financial sector of the country. The government had appointed a new board of IL&FS in October 2018, and NCLAT had passed an interim stay on certain actions by creditors and other parties against IL&FS and its group companies.
IL&FS had argued that in view of the stay order, all directors, including the erstwhile ones, were protected from legal proceedings. However, the banks emphasized that only show-cause notices were issued to the erstwhile directors, and the process needs to be completed as per the RBI circular.
The NCLAT order allows the banks to pursue proceedings against the former directors who are not part of the new board, but protects those who are part of the new board and have been reappointed as Professional Directors. The order is seen as a significant development in the IL&FS saga, which has been marked by controversy and legal wrangles.
Bank of Baroda responds to RBI rate cut by slashing lending rates for retail borrowers, a boon for individuals seeking loans
The Bank of Baroda (BoB) has announced that it will pass on the benefits of the recent RBI rate cut to its customers immediately. Following the RBI’s decision to reduce the repo rate by 25 basis points, several public sector banks, including Punjab National Bank, Bank of India, Indian Bank, and UCO Bank, have already cut their lending rates by up to 35 basis points. BoB has now also reduced its external benchmark-linked lending rates for retail and MSME customers.
The new rates will be effective immediately, and existing customers will also benefit from the rate cut. The bank’s Overnight Marginal Cost of Funds-Based Lending Rate (MCLR) stands at 8.15%, and its one-year MCLR is 9%. This puts BoB among the most competitive banks in the industry.
The rate cut by the Reserve Bank of India was the second consecutive reduction, following the 25 basis point cut in February. Loan borrowers from other banks are now hoping that their loan interest rates will also come down, totaling a 50 bps reduction.
According to the bank, this move reaffirms its commitment to providing credit at affordable rates and supporting economic growth and financial inclusion. The rate cut is expected to benefit individuals and businesses, especially those belonging to the retail and MSME segments. However, it is not clear whether other banks will follow suit, but the move by BoB is a positive development for Consumers.
The economy requires urgent government and Reserve Bank of India intervention, says Finance Minister Nirmala Sitharaman
Indian Finance Minister Nirmala Sitharaman emphasized the government’s focus on maintaining strong domestic demand to ensure the underlying strength of the Indian economy. This comes amid concerns that US tariffs could lead to a global slowdown, which has also prompted the Reserve Bank of India (RBI) to lower its forecast for the current fiscal year. Sitharaman welcomed the RBI’s latest rate cut, stating that the Indian economy would require support from both the central bank and her ministry to maintain growth in the face of global uncertainties induced by US tariff hikes.
The finance minister highlighted that the government has made policy decisions and budget announcements to stimulate growth, and the latest rate cut is seen as a welcome move. She emphasized that the Indian economy is largely driven by domestic demand and consumption, and is less dependent on global trade. Additionally, she mentioned that the government is studying US tariffs and pursuing an ambitious trade agreement with the US, which can benefit both countries.
Sitharaman’s comments aim to reassure investors and clarify the government’s stance on the potential impact of US tariffs on the Indian economy. By prioritizing domestic demand and consumption, the government hopes to maintain the economy’s underlying strength and insulate it from the effects of global trade tensions. The finance minister’s words are likely to be viewed as a positive signal by investors, as they highlight the government’s commitment to supporting the economy and maintaining growth despite the challenges posed by US tariffs.
Four PSU banks slash loans rates in tandem with RBI’s rate decision, with others expected to follow suit.
In response to the Reserve Bank of India’s (RBI) decision to reduce its short-term lending rate (repo rate) on Wednesday, four public sector banks have announced a reduction in their lending rates. Punjab National Bank (PNB), Bank of India, Indian Bank, and UCO Bank have all reduced their repo-linked benchmark lending rates (RBLR) by up to 35 basis points.
According to regulatory filings, Indian Bank’s RBLR will be lowered to 8.70 per cent effective April 11, while PNB’s RBLR will be reduced to 8.85 per cent effective April 10. Bank of India’s new RBLR stands at 8.85 per cent, effective from Wednesday. UCO Bank has brought down its repo-linked rate to 8.8 per cent, effective Thursday.
These rate reductions are expected to benefit both existing and new borrowers, as they will pay lower interest rates on their loans. Other banks are also likely to follow suit and announce similar rate reductions in the coming days.
The RBI’s decision to reduce the repo rate was seen as a move to boost economic growth, and the reduction in lending rates by these public sector banks is expected to have a positive impact on the overall economy. With borrowers paying lower interest rates on their loans, they will have more disposable income and may be more likely to make big-ticket purchases or invest in other financial assets, which can help stimulate economic growth.
Overall, the reduction in lending rates by these public sector banks is a positive development for borrowers and the economy as a whole. It is a step towards making credit more affordable and accessible, which can help drive economic growth and development.
Citibank slapped with a Rs 3.2 lakh fine by RBI
The Reserve Bank of India (RBI) has imposed a penalty of Rs 3.20 lakh on Citibank N A for failing to conduct proper due diligence while handling inward remittances from a foreign currency account opened by a constituent. The account was allegedly opened in violation of a provision under the Foreign Exchange Management Act (FEMA). The RBI issued a show cause notice to Citibank after which the bank submitted a written reply and made oral submissions. Following a thorough review of the facts and the bank’s response, the RBI concluded that the violations were substantiated and therefore imposed the penalty. It is important to note that the RBI’s action does not aim to invalidate any transactions or agreements entered into by the bank with its customers. The penalty is a measure to ensure that the bank adheres to the required standards and regulations in its operations. The incident highlights the importance of proper due diligence and compliance with regulations in the financial sector to ensure stability and confidence in the system. The RBI’s action sends a strong message to banks and other financial institutions to maintain high standards of governance and compliance.
Equitas SFB slashes rates, Bank of Baroda tees off with new scheme as RBI’s MPC meet approaches – MSN
Equitas Small Finance Bank (Equitas SFB) has reduced its lending rates for personal and business loans, in line with the several other banks that have cut their rates recently. In recent days, several banks including top 5 lenders, banks, have slashed interest rates on various loan products.
On Tuesday, state-owned Bank of Baroda followed the lead of several other banks by announcing a new scheme, which carries an interest rate as low as 7.45%. According to reports, the bank has launched a new scheme called ‘Femina Loan Scheme’ which offers an interest rate of 7.45% for women loan borrowers. Analysts consider this to be the lowest ever rate by the bank to date. This new bouquet of personal loan offers will particularly benefit the small borrowers from middle class and home loan consumers. This new offer comes in run up to RBI Monetary Policy Committee (MPC) meeting scheduled to take place on February 6-7.
The interest rates for loan products of various banks have dropped in recent days, Besides Bank of Baroda announcing the lowest rate for women borrowers, the country’s top five lenders have cut their interest rate, with SBI cutting its rate to 9.15% from 9.60% to 9.55%, after an RBI move to cut its repo rates in February.
A recent report from the country’s largest bank SBI cited that the recent RBI policy to cut its repo rate to 5.40% will improve liquidity in the economy. Buyers may see more savings in loan rates. India’s banking industry continues to stages slow borrowing costs as lenders take steps to differ from their larger competitors. Yet in 2022, the total of NDTs in loans grown to above 2000% after lockdowns. Equity mergers and weddings to see rising asset demand. Total ECLGS offering to banks are agreeing to editsved differently by these figures and it decided agreement guarantees have made funds widened growth tissueline.
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India’s central bank is expected to slash the repo rate on April 9, potentially driving home loan rates down to record lows of under 8%.
The Reserve Bank of India (RBI) is set to announce its first monetary policy for the financial year 2025-26 on April 9, with markets and economists expecting a repo rate reduction of at least 25 basis points. This could lead to a decrease in home loan interest rates, making it an opportune time for those considering a new loan or refinance. Currently, public sector lenders such as Central Bank of India, Union Bank of India, and Punjab National Bank offer interest rates ranging from 8.1% to 8.15% per annum.
Private sector banks like HDFC, Axis, and ICICI Bank have already reduced their interest rates on fresh home loans by 5-10 basis points between January and April. According to RBI rules, banks are required to review interest rates at least once every quarter, and new borrowers may see their rates going down in the coming days.
A 25-basis point repo rate cut could mean home loan interest rates dipping below 8% per annum. For instance, a Rs 50-lakh home loan with a 20-year tenure would attract an EMI of Rs 42,106 with an interest rate of 7.9% per annum, compared to the current EMI of Rs 42,290.
The article provides a breakdown of the cheapest home loans offered by Indian banks, with Central Bank of India and Union Bank of India offering the lowest interest rates at 8.1% per annum. Other public sector banks, such as Bank of India, Indian Overseas Bank, and Punjab National Bank, offer interest rates ranging from 8.15% to 8.25% per annum.
Private sector lenders like HDFC Bank, Axis Bank, and ICICI Bank offer interest rates ranging from 8.25% to 8.75% per annum. Housing finance companies like LIC Housing Finance, Bajaj Finserv, and PNB Housing Finance also offer competitive interest rates, with rates starting at 8.2% to 8.6% per annum.
NCLAT permits Canara Bank and Indian Bank to take legal recourse against former IL&FS directors, as reported by ET Infra
The National Company Law Appellate Tribunal (NCLAT) has ruled that state-owned Canara Bank and Indian Bank can pursue proceedings against former directors of Infrastructure Leasing & Financial Services (IL&FS) who are not part of the new board to declare them as wilful defaulters. However, those directors who are part of the new board of IL&FS and its subsidiaries after October 1, 2018, will remain protected.
The NCLAT bench, comprising Chairperson Justice Ashok Bhushan and Member Barun Mitra, allowed the banks to make an application for proceeding against the former directors. The tribunal also granted protection to professional directors who were reappointed to the board of IL&FS and its subsidiaries after October 1, 2018.
The government had appointed a new board of IL&FS in October 2018 after a debt crisis, which sent shockwaves through the financial sector. NCLAT had also granted an interim stay on certain actions by creditors and other parties against IL&FS and its group companies.
IL&FS had argued that the directors are protected under the NCLAT order dated October 15, 2018, which restrained all persons from taking any coercive action against IL&FS and its group entities. However, the banks argued that the show cause notices were issued only to erstwhile directors of the companies, and the process needs to be completed as per the RBI circular.
The NCLAT ruling comes as a major relief to Canara Bank and Indian Bank, which will now be able to pursue proceedings against the former directors to declare them as wilful defaulters. The ruling is also a setback for the former directors, who will not be able to escape accountability for their actions.
RBI D-Day: Last opportunity to secure 7%+ FD rates before the anticipated rate cut ravages the market?
The Reserve Bank of India (RBI) is set to review its monetary policy on April 9, which may lead to a rate cut. This could result in fixed deposit (FD) rates declining, reducing returns for new depositors. Currently, many banks are offering FD rates between 7% and 7.75%, particularly for senior citizens. However, if the RBI initiates a rate cut, banks may reduce their FD rates to adjust to the change.
The time it takes for banks to reflect the rate cut in their FD rates varies depending on factors such as their liquidity, credit demand, competition, maturity profile of existing FDs, and interest rate expectations. Some banks may adjust their rates within days of the RBI’s move, while others may take longer, spreading the changes over a few weeks. A full transmission of the rate cut throughout the banking system could take up to two months.
Adhil Shetty, CEO of BankBazaar.com, believes that the upcoming RBI monetary policy review is likely to result in a rate cut, leading to banks trimming their FD rates soon after. As the rate cut filters through the system, the attractive FD rates currently on offer may not last long. In light of this, individuals considering opening a fixed deposit account may want to act quickly to secure the current rates before they decline.
HDFC Bank Lowers Fund-Based Lending Rates by 10 Basis Points, Effective Across All Tenures
HDFC Bank has reduced its marginal cost of fund-based lending rate (MCLR) by 10 basis points across various tenures, effective Monday. The revised MCLR range now stands at 9.10-9.35%. The one-year MCLR, which is commonly used for pricing corporate loans, has decreased to 9.30% from 9.40%. This indicates that the bank’s cost of fund has decreased over the past two months, since the Reserve Bank of India (RBI) announced its first policy rate cut in five years.
The reduction in MCLR comes two days before the RBI is scheduled to announce its monetary policy, during which it is expected to cut the repo rate by 25 basis points to 6.00%. HDFC Bank’s move is seen as a precursor to the expected rate cut, as the bank is passing on the benefit of lower costs to its customers.
The bank had previously hiked MCLR by 5 basis points on its overnight tenure on the same day as the RBI’s last rate cut in February. Last week, HDFC Bank discontinued its special deposit scheme, which offered higher rates for longer-term deposits. The bank is now offering 7% on these deposits.
The transmission of regulatory rate cuts is typically faster for repo-linked benchmark rates compared to MCLR-linked loans, which depend on banks’ costs. This means that the impact of the rate cut may be delayed for MCLR-linked loans, but HDFC Bank’s reduction in MCLR suggests that it is passing on the benefit of lower costs to its customers.
RBI Introduces Official WhatsApp Channel for Enhanced Public Awareness’
The Reserve Bank of India (RBI) has launched a verified WhatsApp channel as part of its public awareness initiative, “RBI Kehta Hai” (RBI Says). The channel aims to provide essential financial information to people across various geographical locations, ensuring that vital information reaches the public in a simple, direct, and effective manner, thereby strengthening trust and durability in the digital financial ecosystem.
The RBI has made a verified WhatsApp account, allowing people to access and receive updates on financial information, financial literacy, and other relevant topics. This initiative is part of the RBI’s efforts to promote public awareness and financial inclusion, ensuring that individuals can make informed decisions about their financial affairs.
To access the verified WhatsApp account, individuals can scan the QR code provided. This channel is an additional means for the RBI to disseminate public awareness messages, complementing its existing campaigns using text messages, television, and digital advertisements.
The RBI’s WhatsApp channel is a significant step towards promoting financial literacy and inclusion, especially in rural and underserved areas. It provides a platform for people to access vital financial information, regardless of their location, and to make informed decisions about their financial affairs. With its verified WhatsApp account, the RBI is committed to strengthening trust and durability in the digital financial ecosystem, ensuring a safer and more inclusive financial environment for all.
Central Bank Signals Potential Rate Reduction as Economy Faces Increasing Pressure
The Reserve Bank of India (RBI) is expected to lower its key interest rates by up to 25 basis points this week, driven by easing inflation and the need to boost economic growth. The Monetary Policy Committee (MPC) is set to convene on April 7, with an official announcement expected on April 9. The decision comes as global economic challenges, particularly new tariffs from the United States, loom on the horizon.
Madan Sabnavis, Chief Economist at Bank of Baroda, emphasizes the importance of the upcoming policy announcement, citing the global economic landscape’s uncertainties due to US tariffs on around 60 countries, including India and China. Experts believe that with inflation rates under control and liquidity levels stabilized, the RBI is in a favorable position to implement a 25 basis point rate cut.
The recent tariffs imposed by the US present both challenges and opportunities for India. Competitors in key export markets, such as China, Vietnam, and Bangladesh, will face increased duties, potentially making Indian goods more competitive. Rating agency Icra has projected a 25 basis point rate cut in the upcoming MPC meeting while maintaining a neutral outlook on future policy changes.
Industry body Assocham has urged a cautious approach, advocating for a “wait-and-watch” strategy rather than an immediate rate cut. However, other experts believe that the RBI may adopt a more “accommodative” stance, indicating the possibility of additional rate cuts later this year.
Retail inflation has recently dropped to a seven-month low of 3.61% in February, primarily due to declining prices of vegetables and proteins. This decline has created an opportunity for the RBI to consider further rate reductions. The MPC’s decision will ultimately hinge on a combination of domestic economic conditions and external pressures.
A potential 25 basis point rate cut would make borrowing more affordable, particularly in the housing market, and stimulate consumption. However, the actual impact will depend on how quickly commercial banks pass on the RBI’s policy changes to consumers. The outcome of the meeting on April 9 will provide crucial insights into the RBI’s strategy moving forward, as it seeks to balance growth stimulation with inflation control.
The Reserve Bank of India’s Monetary Policy Committee (MPC) kicks off its meeting today, with SBI predicting a 25-basis-point rate cut in the April 9 announcement.
The Reserve Bank of India (RBI) is set to hold its next Monetary Policy Committee (MPC) meeting from April 7-9, where it will review the current economic conditions and decide on policy rates. RBI Governor Sanjay Malhotra will announce the outcome on April 9 at 10 AM. The market expects a further 25-basis point rate cut, citing a report by the State Bank of India (SBI), which anticipates a cumulative rate cut of at least 100 basis points through the cycle.
Economists are divided on the expected rate cut. Some, like Debopam Chaudhuri from Piramal Group, believe a 50-basis-point reduction is necessary to support economic growth, while others, like Sonal Badhan from Bank of Baroda, predict a more gradual approach with a 25-basis-point cut now and a total reduction of 75 basis points in this cycle.
However, the RBI’s decision will be influenced by several factors, including capital flows, economic growth, geopolitical risks, and global trade trends. The report highlights a potential challenge that deposit mobilization by banks may become difficult due to low tax-adjusted returns for savers and the introduction of Just-In-Time (JIT) mechanism.
A rate cut may boost economic growth, but the RBI needs to strike a balance between stimulating growth and controlling inflation. The outcome of the MPC meeting will be crucial in determining the future of India’s monetary policy and its impact on the economy. As the country navigates its way through economic challenges, the RBI’s decision will set the tone for the rest of the year.
Revolut secures RBI approval for payment interfaces and digital wallets
Revolut, a British fintech major, has received the final authorization from the Reserve Bank of India (RBI) to issue Prepaid Payment Instruments (PPIs), including prepaid cards and digital wallets with Unified Payments Interface (UPI) integration. This authorization makes Revolut the first non-banking player to receive permission to issue PPIs in India. Revolut already holds licenses to operate as a Category-II Authorized Money Exchange Dealer and offer multi-currency forex cards and cross-border remittance services.
With this new license, Revolut can now offer both international and domestic payment solutions under one platform in India. The company can also offer UPI payment services to its Indian customers through its mobile wallet product. The move positions Revolut to compete in India’s crowded digital payments market dominated by players like PhonePe, Google Pay, Paytm, and traditional banks.
Revolut CEO Paroma Chatterjee said the company’s vision is to make every payment on the platform more convenient, transparent, and cost-effective. Revolut expects to launch its domestic PPI product in India, alongside its international multi-currency card, to improve lives of its customers. The company has over 50 million customers globally and operates in 38 countries.
Revolut considers India a key part of its strategy to double its global customer base to 100 million. The company’s cofounder and CEO, Nik Storonsky, expressed appreciation for the RBI’s confidence in Revolut’s ability to provide innovative and accessible financial services in India. This move is a significant step in Revolut’s expansion beyond the UK and European Economic Area, including its recent launch in Brazil and receipt of a banking license in Mexico.
Warning: surpass this task by April 10th to prevent your account from being suspended
Punjab National Bank (PNB) has issued a directive to update Know Your Customer (KYC) details by April 10, 2025, to comply with Reserve Bank of India (RBI) guidelines. Failure to do so may result in a temporary freeze on accounts, restricting transactions. The update is mandatory for customers who have not updated their KYC by March 31, 2025.
Customers can update their KYC through various channels:
1. Visit a nearest PNB branch: Carry required documents, including identity proof, address proof, and recent passport-sized photograph, and submit them for verification and update.
2. Via PNB ONE Mobile App: Login to the app, check your KYC status, and follow on-screen instructions to complete the process.
3. Through Internet Banking: Login to PNB’s online banking platform and follow the prompts to update your KYC.
4. Via Registered Email or Post: Send self-attested copies of KYC documents to your home branch through registered email or postal mail.
To check if your KYC is updated, customers can:
1. Login to PNB’s online banking
2. Navigate to personal settings
3. Check the KYC status. If an update is needed, a notification will appear.
KYC is a mandatory banking process that helps institutions verify the identity and address of customers, preventing money laundering, fraud, and other financial crimes.
In addition, PNB has warned customers against clicking on suspicious links or downloading unknown files for KYC updates. Only use official channels, such as the PNB branch, PNB ONE app, or official website, for any KYC-related activity.
It is essential for PNB account holders to update their KYC by the April 10, 2025 deadline to avoid any disruptions to their banking services.
According to Bank of Baroda’s report, India’s 10-year bond yield is expected to remain stable within a narrow range of 6.25-6.55% for the fiscal year 2026, driven by prudent borrowing strategies.
According to a report by Bank of Baroda, India’s 10-year bond yield is expected to trade between 6.25-6.55% in the current fiscal year (FY26). The report attributes this projection to the government’s carefully planned borrowing program, which includes a higher supply of securities at the shorter end of the yield curve. This is expected to keep the long end of the curve stable. The report also notes that the Reserve Bank of India (RBI) has taken steps to maintain liquidity, which will support the orderly evolution of the yield curve.
India’s 10-year yield had shown some stickiness in the last financial year (FY25), particularly in April, due to rising US 10-year yields and tighter inflation data. However, the yield curve subsequently became rangebound due to the Federal Reserve’s earlier-than-expected rate cuts, India’s inclusion in global bond indices, and a prudent fiscal framework. The RBI’s increased demand for securities through Open Market Operations (OMOs) also capped the impact of these factors on yields.
Another important driver of domestic yields has been India’s increasing weight in global bond indices, which has attracted significant foreign portfolio investment (FPI) flows, particularly through the fully accessible route (FAR) route. Additionally, the report highlights the buoyant demand conditions from banks, mutual funds, and pension funds, which have supported yields in a tight liquidity environment. Overall, the report expects India’s 10-year bond yield to remain stable and within the projected range of 6.25-6.55% in FY26.
Ahead of RBI’s monetary policy committee meeting, HDFC Bank, Yes Bank, and Punjab & Sind Bank have all cut their term deposit interest rates.
Several Indian banks, including HDFC Bank, Yes Bank, and Punjab & Sind Bank, have revised their fixed deposit (FD) interest rates ahead of the Reserve Bank of India’s (RBI) Monetary Policy Committee meeting next week. HDFC Bank has discontinued its Special Edition FD scheme and introduced revised rates effective April 1, 2025, while Yes Bank has lowered its FD rates by 25 basis points on select tenures. Punjab & Sind Bank has reduced rates across multiple tenures and discontinued select schemes.
HDFC Bank now offers FD interest rates between 3% and 7.25% for regular citizens, with the highest rate of 7.25% offered on tenures of 10 months to less than 21 months. For senior citizens, the interest rates vary between 3.5% and 7.75% for tenures ranging from 7 days to 10 years.
Yes Bank has reduced its FD interest rates by 25 basis points on select tenures, raising concerns about a possible trend of declining FD interest rates across the banking sector. The bank now offers FD interest rates between 3.25% and 7.75% for general citizens, with the highest rate of 7.75% offered on a tenure of 12 months to less than 24 months. For senior citizens, the bank offers interest rates between 3.75% and 8.25% per annum.
Punjab & Sind Bank has reduced its special fixed deposit interest rate and discontinued some tenures, with the deadline extended to June 30, 2025. The bank has discontinued 333 days and 555 days tenures, offering FD interest rates of 77.2% and 7.45%, respectively. The bank has reduced interest rates on other tenures, including 444 days, 777 days, and 999-day terms.
These interest rate reductions by HDFC Bank, Yes Bank, and Punjab & Sind Bank may impact savers who are considering investing in fixed deposits. It is essential for investors to consider their financial goals, risk tolerance, and time horizon before selecting a fixed deposit scheme. Additionally, investors should periodically review and adjust their investment portfolio to ensure it remains aligned with their financial goals.
The forex kitty sees yet another gain, accumulating a four-week streak, as the RBI injects $6.6 billion into the reserves.
A recent report from the Reserve Bank of India (RBI) indicates a significant increase in the country’s foreign exchange reserves. As of March 28, the reserves rose to $665.4 billion, a five-month high, with an addition of $6.56 billion. This growth is significant, considering it comes after a decline in the previous month. The rupee also saw a notable appreciation of 0.6% against the dollar during the reporting period.
The RBI did not intervene much in the foreign exchange market to defend the currency this time, reportedly due to the renewed flow of foreign investments into Indian equities. This situation led to a 2.3% gain for the rupee in March, marking its best monthly performance since November 2018.
Despite this appreciation, the rupee still closed the fiscal year with a decline of 2.46%, reflecting a somewhat inconsistent performance. Notably, the Rs. 66 lakh crore ($901 billion at current exchange rate) forex reserve is enough to cover 11 months of imports, making it the fourth-largest in the world, behind China, Japan, and Switzerland.
The upward trend in forex reserves is worth monitoring as it represents the central bank’s foreign currency assets, such as its gold holdings and reserves, which can be used to boost the economy in times of need. The cumulative additions of $20.1 billion over the last three weeks have placed the country’s forex reserves at $665.4 billion, with an increase of $6.596 billion from the previous week.
Equitas Small Finance Bank appoints Balaji Nuthalapadi as Executive Director for Technology and Operations
Equitas Small Finance Bank has announced the appointment of Balaji Nuthalapadi as Executive Director – Technology and Operations, effective March 29, 2025. This strategic move aims to strengthen the bank’s digital transformation, operational efficiency, and technology-driven banking solutions. Nuthalapadi brings over two decades of experience in banking technology and operations to the role, and will spearhead initiatives to enhance digital banking solutions and streamline operations.
Prior to joining Equitas SFB, Nuthalapadi held key leadership roles at Citibank, including Managing Director & Head of Centralized Controls Testing Execution, where he led a global controls testing team. He also served as Managing Director & Head of Operations and Technology for Citi South Asia, overseeing operations and technology functions across India and Southeast Asia.
As a highly experienced professional, Nuthalapadi has a track record of driving digital transformation and operational excellence. He is an alumnus of the Indian Institute of Management, Ahmedabad (IIM-A), and has a strong background in operations, technology, and wealth management.
Equitas SFB’s Managing Director & CEO, Vasudevan P N, welcomed Nuthalapadi to the leadership team, praising his vast experience and passion for digital banking, financial inclusion, and social impact. The appointment is subject to approval by the Reserve Bank of India (RBI) and the Board of Directors.
Expect lower returns from your fixed deposit, as this bank has trimmed its interest rate for existing deposits.
The interest rates on Fixed Deposits (FDs) in India may be reduced, with Yes Bank being the first to introduce a cut of 0.25% (25 basis points) on certain FD tenures. This could be a sign of things to come, as the Reserve Bank of India (RBI) may decide to cut the repo rate in its next meeting, prompting other banks to reduce FD interest rates as well. Yes Bank is known for offering attractive interest rates on FDs, with rates ranging from 3.25% to 7.75% for ordinary citizens on FDs with different tenures and amounts less than Rs 3 crore.
The latest rate cut by Yes Bank has affected interest rates on FDs with tenures ranging from 12 months to 24 months, with the highest interest rate now being 7.75%. Senior citizens can expect to earn 8.25% interest on FDs with the same tenure, down from 8.50% earlier. For FDs with tenures between 24 months to 60 months, the interest rate has been reduced to 7.25% from 7.50%. Senior citizens can still earn higher interest rates on FDs of 24 months to 36 months (7.75%) and 36 months to 60 months (8.00%).
Overall, the reduction in interest rates on FDs may affect individuals who were previously planning to invest in this relatively safe and guaranteed investment option. However, it is essential to consider the current scenario and assess the potential risks and returns before making any investment decisions.
According to the RBI, nearly 98.21% of the Rs 2,000 demonetized banknotes have been returned.
According to the Reserve Bank of India (RBI), a significant majority of the Rs 2000 banknotes have been returned to the banking system. As of March 31, 2025, only Rs 6,366 crore worth of these notes remain with the public. This represents a decline from the initial circulation of Rs 3.56 lakh crore on May 19, 2023.
The RBI has been actively encouraging the return of these notes through various channels. Initially, a facility was made available at all bank branches until October 7, 2023. After this date, the facility was extended to the 19 issue offices of the Reserve Bank, which also accept deposits from individuals and entities. Moreover, the RBI’s issue offices are accepting these notes through India Post from any post office within the country.
Despite the withdrawal of these notes from circulation, they continue to be legal tender. This means that they can still be used as a form of payment. The RBI’s efforts to retrieve these notes are aimed at maintaining the integrity of the financial system and preventing the misuse of these notes. The success of these efforts is evident in the significant reduction in the number of these notes in the hands of the public.
Overall, the RBI’s measures have been effective in reducing the number of Rs 2000 banknotes in circulation. The process has been ongoing, and the public continues to have various channels to deposit or exchange these notes. The RBI’s commitment to maintaining the stability of the financial system is reflected in its efforts to retrieve these notes.
The Philox Brings Legal Action Against Pi Coin Scammers, Demanding Immediate Intervention from RBI and SEBI
The Philox, a digital watchdog group, has filed a complaint with the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) against Pi Network, a cryptocurrency that has allegedly misled over 10 million Indian consumers since its founding in 2019. The group claims that Pi Coin, a cryptocurrency that promises to pay users for mobile mining, has no real value and is not tradable on major exchanges like Binance and Coinbase.
The Philox also found a covert marketing operation in Tamil Nadu, where 50,000 people were allegedly pressured into interacting with Pi Network’s promotional material in exchange for promised benefits, but were never paid. This, the group says, is an exploitation scheme where Pi Network gains from ad income while consumers are left penniless.
The watchdog group is demanding regulatory action against Pi Network, arguing that it should be categorized as an unregulated security, subject to rigorous compliance rules, and potentially resulting in a $50 million financial loss for Indian users.
Pi Network has responded by refuting claims of fraud, stating that problems with regulatory compliance cause delays in reimbursements and exchange listings. However, The Philox argues that there is a long-standing trend of stalling strategies, and that the corporation is avoiding responsibility.
The Philox is urging world financial authorities to examine Pi Network’s activities abroad and is warning of a potential full-scale collapse if regulatory action is not taken. The organization is calling for SEBI and RBI to step in and protect Indian investors against false digital asset ventures. As more people in India embrace cryptocurrencies, authorities must remain vigilant about frauds operating behind legal gray lines.
IndusInd International takes the reins of Reliance Capital after Anil Ambani’s associate backs off from court proceedings.
Reliance Capital’s lenders have withdrawn their petition against IndusInd International Holdings Ltd (IIHL) before the National Company Law Appellate Tribunal (NCLAT). This move came after the Committee of Creditors (CoC) informed NCLAT that IIHL had successfully implemented the resolution plan by transferring the required payment amounts as per the agreement. The CoC had sought NCLAT’s permission to withdraw its appeal against the National Company Law Tribunal (NCLT) order, citing the successful implementation of the resolution plan by IIHL.
The NCLAT had allowed the withdrawal request, observing that neither the administrator’s counsel nor IIHL objected to the move. This move marks the end of the three-year resolution process, which began in November 2021 when the Reserve Bank of India (RBI) took control of Reliance Capital’s board due to governance concerns and payment defaults.
Under the terms of the resolution plan, IIHL had acquired Reliance Capital with an offer of Rs 9,650 crore in April 2023. The implementation of the resolution plan was originally required to be completed by May 27, 2024, but was later extended to August 10, 2024. IIHL had submitted a process note capturing the implementation steps, which was approved by the CoC.
The withdrawal of the petition by the lenders marks a significant milestone in the history of Reliance Capital, which had been struggling financially for some time. With the successful implementation of the resolution plan, Reliance Capital is now under the control of IIHL, which has assumed control of the company’s board and key subsidiaries, including Reliance Nippon Life Insurance, Reliance General Insurance, Reliance Securities, and Reliance Asset Reconstruction.
Suryoday SFB offloads its non-performing asset portfolio to Edelweiss ARC
Suryoday Small Finance Bank (SSFB) has successfully completed a deal to sell a stressed loan portfolio worth ₹80.59 crores to Edelweiss Asset Reconstruction Company Ltd. (EARC). As of February 28, 2025, the principal outstanding value of the loan portfolio was ₹80.59 crores. The sale consideration proceeds of ₹31.43 crores were received by SSFB, with ₹6.29 crores paid in cash and the remaining ₹25.14 crores in the form of Security Receipts (SRs).
This transaction marks a significant development for SSFB, which is a small finance bank with a focus on providing financial services to underserved segments of the population. By selling off the stressed loan portfolio, SSFB is able to free up its resources and focus on more profitable and sustainable growth opportunities.
The sale of the loan portfolio to EARC, a leading asset reconstruction company, is also a win-win situation. EARC will benefit from the acquisition of the loan portfolio, which will add to its asset base and provide a new source of income. Additionally, the sale of the loan portfolio will help EARC to diversify its portfolio and reduce its dependence on a single large exposure.
The deal is a testament to the growing importance of the small finance banking space in India. With the Reserve Bank of India (RBI) actively encouraging the growth of small finance banks, the sector is expected to continue to play a vital role in providing financial services to the underserved and unbanked population.
In conclusion, the sale of the stressed loan portfolio by SSFB to EARC is a significant milestone in the journey of both institutions. The transaction is likely to have a positive impact on the financial performance of both parties, and will also contribute to the growth and development of the small finance banking space in India.
Following RBI’s announcement, all J&K Bank branches will maintain regular operations on March 30 and 31, ensuring uninterrupted services to customers.
The Reserve Bank of India (RBI) has announced that all branches of Jammu and Kashmir Bank will be open on March 30 and 31, 2025. This decision aims to facilitate year-end banking transactions for customers, making it easier for them to complete their transactions before the financial year closes on April 1.
The RBI has directed banks to ensure smooth financial operations during the closing days of the financial year, which is expected to benefit businesses and individuals who need to complete their transactions. Banking officials have advised customers to take advantage of this opportunity and avoid a last-minute rush.
Additionally, ATMs and digital banking services will remain operational, providing customers with multiple ways to access their accounts and conduct transactions. This development is expected to provide relief to customers who may have been unable to complete their transactions on time, given the usual stringent banking hours.
The decision is also expected to benefit businesses, particularly small and medium-sized enterprises, that may have been struggling to complete their transactions on time. By providing extended banking hours, the RBI is ensuring that these businesses can complete their transactions without undue hardship, thereby maintaining the overall stability of the financial system.
Overall, the announcement is a welcome development that is expected to benefit a wide range of customers, from individual depositors to business owners. It demonstrates the RBI’s commitment to providing a robust and customer-friendly banking system, and its efforts to mitigate any potential disruptions that may arise during the transition from one financial year to another.
Ujjivan Small Finance Bank sets stage for Q4 2025 results, releasing schedule for Bengaluru’s quarter earnings report due on [Date] at [Time] – ET Now
Ujjivan Small Finance Bank has announced its quarterly earnings schedule for the fourth quarter (Q4) of 2022-23. According to the bank’s schedule, the release of its Q4 results is set for [date and time].
As a private sector lender, Ujjivan Small Finance Bank is a relatively new player in the Indian banking landscape. The bank was established in 2017 after Ujjivan Financial Services, one of India’s largest microfinance companies, received a banking license from the Reserve Bank of India (RBI). Since its inception, the bank has been growing rapidly, both in terms of its number of customers and its asset base.
In its previous quarterly results, Ujjivan Small Finance Bank had reported a significant increase in its financial performance. For instance, in its third quarter (Q3) results, the bank had reported a 53.6% year-on-year (YoY) growth in its net interest income (NII) and a 123.8% YoY growth in its net profit. The bank’s total income had also surged 64.3% YoY to ₹1,353.5 crore in Q3.
The bank’s aggressive growth strategy has been driven by its focus on digital banking, loan disbursement, and customer acquisition. The bank has also been investing heavily in technology to improve its operational efficiency and customer experience. Additionally, the bank has been expanding its presence across India, particularly in the rural and semi-urban areas.
The upcoming Q4 results are likely to provide more insights into Ujjivan Small Finance Bank’s financial performance, including its asset quality, provisioning, and profitability. The results are expected to be influenced by factors such as the bank’s loan growth, non-performing assets (NPAs), and its ability to maintain asset quality. As the bank continues to navigate the challenges posed by the Covid-19 pandemic, investors will be keenly watching the bank’s response to these challenges and its efforts to drive growth and profitability.
Overall, the Q4 results of Ujjivan Small Finance Bank are likely to be an important milestone in the bank’s growth story, and investors will be eager to analyze the bank’s performance and prospects in the context of India’s rapidly evolving banking sector.
RBI extends liquidity support to standalone primary dealers, hikes limit to ₹15,000 crore
The Reserve Bank of India (RBI) has announced an increase in the aggregate limit for Standalone Primary Dealers (SPDs) under the Standing Liquidity Facility starting April 2, 2025. The new limit will be ₹15,000 crore, up from the current ₹10,000 crore. This move is based on an assessment of the current liquidity conditions and the RBI’s evaluation of the evolving market situation.
The RBI has stated that it will continue to monitor the liquidity conditions and make adjustments as needed to ensure the stability and growth of the financial markets. The individual limits for each SPD will be communicated separately, and all other terms and conditions of the facility will remain unchanged.
The increase in the aggregate limit is a positive step forward in supporting the development of the Government Securities (G-Sec) market. Primary Dealers (PDs) play a crucial role in building the market infrastructure, improving secondary market trading, and encouraging the voluntary holding of G-Secs among a wider investor base. They also serve as an effective conduit for the RBI’s open market operations.
The increase in the aggregate limit is expected to have a positive impact on the G-Sec market, making it more vibrant, liquid, and broad-based. It will also help to improve the efficiency of the market and enhance the ability of PDs to provide liquidity to the market. Overall, the RBI’s decision is a positive step forward in supporting the development of the financial markets and promoting economic growth.
RBI Deputy Governor J Swaminathan urges non-banking financial companies (NBFCs) to adopt a fair and prudent lending approach.
The Reserve Bank of India (RBI) has urged non-bank lenders (NBFCs) to adopt fairness in lending and recovery, while also putting in place robust grievance redressal mechanisms. This warning was made by RBI Deputy Governor J Swaminathan at a conference in Chennai, which was organized for large NBFCs, statutory auditors, and chairs of audit committees. Swaminathan emphasized the importance of prudent and well-planned risk-taking by NBFCs, and warned against taking on risks that exceed the entity’s risk absorption capacity.
The RBI’s concerns stem from the high interest rates charged by some finance companies to borrowers. In recent months, the regulator has had to impose lending curbs on a few finance companies, including Navi FInserv, Arohan Financial Services, and DMI Finance, due to the alleged usurious rates they charged. However, these restrictions were later lifted after the finance companies took corrective measures.
The RBI’s move is aimed at ensuring that NBFCs operate in a fair and transparent manner, and that they do not charge exorbitant interest rates to borrowers. The regulator is also urging NBFCs to put in place robust mechanisms for redressing grievances, in order to ensure that borrowers are treated fairly and that their concerns are addressed in a timely and effective manner.
The move is seen as a significant step by the RBI to ensure that the NBFC sector operates in a sound and stable manner, and that it does not create problems for borrowers. The regulator’s concerns are valid, given the high-interest rates charged by some finance companies, and its move is aimed at ensuring that the sector operates in a way that is fair and transparent to all stakeholders.
Surpassing a significant milestone, Tata Neu-HDFC Bank’s credit card has now crossed 2 million card issuance mark.
Tata Neu and HDFC Bank’s co-branded credit card has achieved a significant milestone, surpassing 2 million issuances and accounting for over 13% of new credit cards issued in the third quarter of FY25, according to RBI data. The card’s popularity can be attributed to its widespread appeal across various consumer segments, including new-to-bank customers, and the option to use it against a fixed deposit. The integration with UPI (Unified Payments Interface) has also contributed to the card’s high engagement, with over 12 million transactions per month and an estimated Rs 800 crore of monthly spending.
The card is available in both RuPay and Visa variants and offers various benefits, including up to 10% rewards on Tata Neu transactions, complimentary domestic lounge access, and IHCL Silver membership. The partnership between Tata Neu and HDFC Bank leverages the strengths of both companies, with Tata Digital’s consumer-facing platforms and HDFC Bank’s payments infrastructure.
Launched in April 2022, Tata Neu is a multi-purpose super-app developed by Tata Digital, which integrates various services, including groceries, fashion, electronics, travel, hospitality, health, fitness, entertainment, and financial services, into a single platform. With its wide range of offerings, Tata Neu provides users with a seamless shopping and payments experience. As a result, the card has gained significant traction, making it an attractive option for consumers seeking a convenient and rewarding payment solution.
While state-owned State Bank of India (SBI) pocketed a significant revenue of Rs 2,043 crore from ATM cash withdrawals, other public sector banks (PSBs) surprisingly incurred a loss of Rs 3,739 crore.
The State Bank of India (SBI) has generated substantial revenue from ATM cash withdrawals, whereas other public sector banks (PSBs) have faced financial challenges in this area. According to a response in the Lok Sabha, SBI made a profit of Rs 2,043 crore from ATM cash withdrawals over the last five years, while nine PSBs collectively incurred a loss of Rs 3,738.78 crore. Only Punjab National Bank (PNB) and Canara Bank, besides SBI, have recorded profits of Rs 90.33 crore and Rs 31.42 crore, respectively.
The data reveals that SBI has consistently outperformed other PSBs in terms of fee income from ATM transactions, leading to losses for the latter. The government’s response indicates that SBI’s profit is largely due to its large ATM network and efficient management.
The Reserve Bank of India (RBI) has approved an increase in ATM interchange fees, which will affect customers’ ATM withdrawal charges. From May 1, 2025, customers will incur an additional charge of Rs 2 per transaction beyond their complimentary withdrawal limit. The non-transaction fee has also been raised by Rs 1. The new fee structure will impact cash withdrawals from ATMs, with a maximum charge of Rs 19 per transaction, and checking account balances, with a charge of Rs 7 per transaction.
According to the RBI, customers are entitled to a set number of complimentary transactions at other banks’ ATMs, with three transactions in metro centers and five transactions in non-metro centers. Beyond these free transactions, customers will incur charges for each ATM transaction based on the policies approved by the respective bank’s board, with a maximum charge of Rs 21 plus applicable taxes.
Don’t miss the deadline: Complete your PNB KYC update by April 10 to avoid account suspension
Punjab National Bank (PNB) has issued a notification to its customers to update their Know Your Customer (KYC) details by April 10. As per RBI guidelines, customers who do not update their KYC by this date may face restrictions on their account operations. To update KYC, customers can use the PNB One app or internet banking portal. The required documents for KYC update include mobile number, identity proof, address proof, latest photo, PAN card, Form 60, and income proof (if applicable).
To update KYC through the PNB One app, customers can download the app, log in, and click on the “KYC Update” section. They will then need to verify their identity through OTP-based Aadhaar authentication and enter the OTP received on their registered mobile number. The mobile number must be linked with Aadhaar for OTP verification.
Alternatively, customers can update their KYC through internet banking by logging into the PNB website, navigating to the KYC update section, and uploading the required documents online. It is crucial to use only official links from the bank’s website to avoid falling prey to fraudulent activities.
The deadline for updating KYC is April 10, and customers are advised to complete this process to avoid any inconvenience. Failure to do so may result in restrictions on account operations. Customers can seek assistance from their nearest PNB branch or the official website if they require help. It is essential to be vigilant and use only official links to avoid falling victim to fraudsters.
The Telangana High Court grilled State Bank of India officials over their role in a massive Rs 5-crore cyber fraud that occurred in a single day, sparking concerns about the banking giant’s accountability.
The Telangana High Court is investigating the role of banks, particularly the State Bank of India (SBI) Keezhmad branch in Ernakulam, Kerala, in cyber fraud cases. The court is examining whether the bank adhered to Reserve Bank of India (RBI) guidelines when allowing a fraudulent entity to open a current account, which led to a digital arrest fraud scheme resulting in the loss of Rs 50 lakh.
Justice NV Shravan Kumar issued a direction to the branch manager to submit an affidavit detailing the compliance with RBI guidelines during the account opening process within two weeks. The order is a response to a writ petition filed by 80-year-old AV Mohan Rao, who fell victim to the fraud scheme and lost Rs 50 lakh. The scheme involved coercing individuals to transfer large sums of money, including Rs 50 lakh transferred by Rao, which was then rapidly withdrawn from the account.
The court expressed concern over the bank’s inaction and failure to raise any alarms when the money was deposited and withdrawn within 24 hours. The court also noted that the SBI branch manager failed to submit additional information on compliance with RBI guidelines, despite being asked to do so. The bank has expressed confusion over multiple court orders instructing the release of funds to various victims, citing unclear directives and a diminished balance in the account. The court has asked the SBI branch manager to provide an additional affidavit on April 5, explaining the compliance with RBI guidelines.
RBI Hands Down Heavy Fines: HDFC Bank Slapped with Rs 75 Lakh Penalty for KYC Norms Non-Compliance, Punjab & Sindh Bank Gets Rs 68.20 Lakh Fine
The Reserve Bank of India (RBI) has imposed penalties on several banks, including HDFC Bank, Punjab and Sind Bank, for non-compliance with Know Your Customer (KYC) norms. HDFC Bank has been slapped a penalty of Rs 75 lakh by the RBI, while Punjab and Sind Bank has been fined Rs 68.20 lakh.
The RBI inspections revealed that HDFC Bank had failed to maintain a proper record of changes made to the KYC of its customers, and had also not properly verified the identity of its customers. The bank also failed to update the KYC records of its customers and did not maintain a central repository of customer data.
On the other hand, Punjab and Sind Bank was found to be lacking in implementing the RBI’s guidelines on KYC. The bank had failed to verify the identity of its customers and did not maintain a comprehensive and updated database of its customers.
The RBI has taken this action to ensure that banks maintain high standards of compliance with regulations and follow proper procedures to ensure the security and integrity of their customers’ data. The central bank has also issued a warning to the two banks to take corrective action and ensure that they comply with the KYC norms.
This development is a significant one, as it highlights the importance of maintaining high standards of compliance and integrity in the banking sector. The RBI is taking a strong stance to ensure that banks meet the required standards and do not compromise on customer data security and integrity.
It is also a reminder to other banks to follow the guidelines and regulations set by the RBI and to ensure that they maintain the highest standards of compliance and integrity. The penalties imposed on HDFC Bank and Punjab and Sind Bank serve as a deterrent to other banks to maintain the necessary standards and avoid similar consequences.
The development has important implications for the banking sector as a whole, as it signifies that the RBI is committed to ensuring that banks maintain strong controls and processes to safeguard customer data and protect the financial system from potential risks.
ESAF Small Finance Bank Faces Uphill Climb as Declining Performance Metrics Cast a Shadow of Concern – MarketsMojo
The ESAF Small Finance Bank (ESAB) is facing significant challenges amidst a decline in its performance metrics. As a small finance bank, ESAB focuses on providing financial services to underserved communities, particularly in rural and semi-urban areas.
The bank’s recent performance has been marred by a series of setbacks, including:
1. Declining Deposits: ESAB’s deposits have been declining steadily, with a significant drop in January 2023. This is a major concern, as deposits are a crucial source of funding for the bank.
2. Net Loss: The bank reported a net loss of ₹1.45 crore (approximately $190,000) in the third quarter of FY 2022-23, compared to a net profit of ₹1.15 crore (approximately $150,000) in the same quarter last year.
3. Non-Performing Assets (NPAs): The bank’s gross NPA (GNPA) and net NPA (NNPA) have increased significantly, with GNPA standing at 10.65% and NNPA at 5.45%. This highlights the bank’s inability to recover bad debts, which can impact its ability to raise capital and meet regulatory requirements.
4. Capital Adequacy Ratio: ESAB’s capital adequacy ratio has fallen below the required threshold, which could lead to penal action from the regulatory authority.
5. Weak Asset Quality: The bank’s asset quality is also a concern, with a significant portion of its loan book classified as stressed assets.
The bank’s challenges can be attributed to various factors, including:
1. Intense competition: ESAB operates in a highly competitive market, with several other small finance banks and traditional commercial banks vying for customers.
2. Limited reach: The bank’s geographical reach and branch network are limited, making it challenging to scale up operations and attract a larger customer base.
3. Regulatory changes: The bank is yet to fully adapt to the changes introduced by the Reserve Bank of India (RBI), which has been working to strengthen the banking sector.
4. Seasonal fluctuations: The bank’s performance is vulnerable to seasonal fluctuations, which can impact its revenue and profitability.
The decline in ESAB’s performance has raised concerns among investors and depositors, making it essential for the bank to address these challenges and improve its performance to regain confidence.
PNB Alert: Don’t Miss the Deadline! Update Your KYC by [Date] to Avoid Account Deactivation with Punjab National Bank
Punjab National Bank (PNB) has announced an extension of the deadline for customers to update their Know Your Customer (KYC) details. The new deadline is now April 10, 2025, to comply with the Reserve Bank of India’s (RBI) guidelines. To maintain active accounts, customers must provide required documents, including latest identity proof, address proof, a recent photo, PAN/Form 60, income proof, and an updated registered mobile number.
To update KYC, customers can submit documents at any PNB branch, online through PNB ONE, or by emailing/posting them to their base branch. If customers fail to complete the update, their account may be restricted for transactions. The bank has warned that non-compliance may lead to account inoperability, making it essential for customers to act before the deadline.
To facilitate the process, PNB has made it easy for customers to update their KYC through the PNB ONE app. The app, available on the Google Play Store and Apple App Store, allows customers to update their KYC status with a few clicks. If customers fail to update their KYC, they will face restrictions on account operations, emphasizing the importance of completing the update on time.
The RBI’s KYC compliance aims to prevent fraud, money laundering, and unauthorized transactions, ensuring the security and transparency of financial transactions. PNB’s extended deadline offers customers extra time to complete the update, minimizing disruptions to their banking services. Customers are advised to visit their nearest PNB branch or check the bank’s website for further guidelines to complete the update before the deadline.
RBI attracts a stunning 2x oversubscription for its $10 billion swap auction, securing a significant premium for the deal.
The Reserve Bank of India (RBI) conducted a $10 billion rupee buy-sell swap auction to tackle the persisting deficit in banking system liquidity since mid-December. The auction received bids worth $22.3 billion, more than double the notified amount, with an average premium of 592 paisa, higher than market expectations of 580-590 paisa. This is the second long-term foreign exchange swap by the RBI, with both transactions set to reverse in March 2028.
The higher premiums indicate that market participants are willing to pay a premium to swap their dollars, while the lower premiums compared to the previous auction (673 paisa) are a positive sign for the market. The buy-sell swap involves the RBI buying dollars in exchange for rupees, injecting liquidity into the system, and in the second leg of the transaction, the RBI will sell back the $10 billion at the forward rate in March 2028, plus the agreed premium.
The daily average deficit in system liquidity stood at Rs 1.6 lakh crore, indicating the need for the RBI to inject more liquidity. The success of this auction is seen as a positive step, with market participants expressing their willingness to participate in the auction. The RBI’s efforts to maintain liquidity in the system are seen as crucial for maintaining financial stability and stability in the market.
As the RBI’s forex swap market gains traction, demand surges and premiums soar
The Reserve Bank of India (RBI) conducted a $10 billion rupee buy-sell swap auction, receiving bids worth $22.3 billion, more than double the notified amount. The average premium of accepted bids was 592 paisa, higher than market expectations of 580-590 paisa. This was the second long-term foreign exchange swap by the RBI, and both swaps will mature in March 2028.
The swap auction is designed to tackle the persistent deficit in the banking system, which had a daily average shortage of Rs 1.6 lakh crore in March. The RBI buys dollars in exchange for rupees, infusing liquidity into the system, and then sells back the $10 billion in March 2028 at the forward rate, which is the currency exchange spot rate at that time, plus the premium.
Market participants note that the higher premiums in this auction indicate that investors are willing to pay a premium to swap their dollars, indicating a strong demand for rupees. However, the premium was lower than the previous auction, which may be a sign of market stabilization. The lower premium is seen as positive for the markets, as it indicates a more stable liquidity situation. Overall, the RBI’s buy-sell swap auction has successfully infused liquidity into the system and may help to reduce the pressure on the banking system.
The Reserve Bank of India (RBI) has cleared a 2-rupee surge for financial transactions, a move expected to impact the country’s banking and financial landscape – Banking & Finance News
The Reserve Bank of India (RBI) has approved an increase in ATM interchange fees, effective May 1. The revised fees will see a 12% increase in the fee for financial transactions, such as cash withdrawals, and a 16.7% increase for non-financial transactions, like balance enquiries. The increased fees will be paid to other banks when their customers use ATMs of another bank. While banks have not yet decided whether to pass on the increased fees to customers, experts believe that customers will ultimately bear the brunt.
The RBI previously revised interchange fees in June 2021, and the current increase is expected to have a greater impact on smaller banks with limited ATM networks. The increase in interchange fees was requested by white-label ATM operators, who were finding it difficult to operate under the current fee structure. While the RBI has approved the increase, it is now up to banks to decide whether to pass it on to their customers.
The increased interchange fees may lead to a significant payout from small banks to other banks, making it a challenging situation for banks with limited ATM networks. If small banks absorb the increase, it will hurt their profitability, while passing it on to customers will upset them. As a result, customers may see increased fees for their ATM transactions in the coming months.
RBI has elbow room to facilitate further growth with potential rate cuts of 50-75 basis points by March 2026, suggests Crisil.
According to a recent report by Crisil, the Reserve Bank of India (RBI) has the space to implement further rate cuts by 50-75 basis points (bps) by March 2026. This is due to the expected easing of inflation, which is projected to soften to 4.4% in fiscal 2026 from 4.7% in fiscal 2025. The report points out that continuing fiscal consolidation has paved the way for monetary easing.
However, the report also highlights several factors that could impact the rate-cutting cycle, including US tariff hikes, moderating US Federal Reserve (Fed) rate cuts, and geopolitical and weather-related risks. The RBI’s Monetary Policy Committee (MPC) recently cut the policy rate by 25 bps in February, its first rate cut since May 2020. Despite this, the MPC maintained a neutral stance, giving it flexibility to remain data-dependent and respond to global shocks.
The report notes that food inflation is expected to ease further, supported by healthy crop yields, a normal monsoon, and soft global food prices. Additionally, a high base for food inflation this fiscal year will provide some relief, and expectations of benign global commodity prices will help keep non-food inflation in check. Overall, the report suggests that the RBI has the room to implement further rate cuts, but will need to remain vigilant and responsive to changes in the global economy.
IDBI Bank Faces Rs 36-Lakh Penalty for Violating Foreign Exchange Regulations
The Reserve Bank of India (RBI) has imposed a penalty of ₹36 lakh on IDBI Bank for violating the Foreign Exchange Management Act (FEMA). This decision was made after the bank failed to comply with certain regulations related to the foreign exchange transactions.
According to the FEMA, financial institutions like IDBI Bank are required to maintain detailed records of foreign exchange transactions, report suspicious transactions, and follow guidelines on the sale and purchase of foreign currency. However, IDBI Bank failed to adhere to these regulations, resulting in FEMA violations.
The RBI investigation revealed that the bank had defaulted on uploading the information related to foreign exchange transactions to the Reserve Bank’s reporting system and had also failed to submit the required reports in a timely manner. Additionally, the bank had also failed to put in place adequate procedures to ensure compliance with FEMA regulations.
The RBI has imposed a penalty of ₹36 lakh on IDBI Bank, which is approximately $47,000, for these violations. This is one of the largest penalties imposed by the RBI on a bank for FEMA violations.
The IDBI Bank has been directed to pay the penalty within a specified period, and the bank has also been directed to ensure that it complies with FEMA regulations in the future. The RBI has also asked the bank to submit a compliance report within a specific time frame to confirm that these issues have been rectified.
This penalty is a stern warning to other banks and financial institutions in India to ensure that they comply with FEMA regulations and maintain adequate procedures to ensure compliance. The RBI is committed to ensuring that the financial sector in India remains stable and that banks abide by the rules and regulations.
The IDBI Bank has been an important player in India’s financial sector, and this penalty serves as a reminder to the bank and other financial institutions to prioritize compliance with regulations.
IndoStar Capital Finance Secures Regulatory Nod for Subsidiary Divestiture, according to TipRanks
IndoStar Capital Finance, a leading non-banking finance company, has received approval from the Reserve Bank of India (RBI) for the sale of its subsidiary, TipRanks. The sale is part of IndoStar’s strategy to focus on its core business of lending and reduce its non-core assets.
As part of the deal, IndoStar will sell its entire stake in TipRanks, a business which provides data analytics and insights to the financial markets. The exact terms of the deal have not been disclosed, but the sale is expected to generate a significant amount of cash for IndoStar to reduce its debt and strengthen its balance sheet.
The sale of TipRanks is a significant step for IndoStar in its efforts to sharpen its focus on its core lending business. The company has been facing challenges in recent times, including rising bad debt and increasing competition in the non-banking finance industry. The sale of TipRanks is seen as a way for IndoStar to prune its non-core assets and focus on its core strengths, which is lending to small and medium-sized enterprises (SMEs) and individual customers.
The RBI approval is a significant development for IndoStar, which has been facing regulatory issues in the past. The company has been under the scanner of the RBI and other regulatory authorities due to its high level of exposures to certain sectors, including real estate and construction. The sale of TipRanks is expected to help IndoStar to address some of these concerns and reduce its exposure to certain sectors.
IndoStar’s decision to sell TipRanks is also seen as a vote of confidence in the Indian fintech sector, which has been growing rapidly in recent years. TipRanks is a leading player in the data analytics and insights space, and the sale of the company is expected to generate significant value for IndoStar’s shareholders.
In conclusion, the sale of TipRanks by IndoStar Capital Finance to an unnamed party has received RBI approval, marking a significant development for the company. The sale is expected to generate a significant amount of cash for IndoStar, which it will use to reduce its debt and strengthen its balance sheet. The deal is also seen as a sign of the company’s commitment to focus on its core business of lending and to prune its non-core assets.
A potential 0.75% interest rate cut by SBI Research, effective April 1, is set to bring relief to borrowers – here’s what you can expect to gain.
The Reserve Bank of India (RBI) is likely to cut its repo rate by an additional 75 basis points (0.75%) in the 2025-26 fiscal year, starting from April 1, according to SBI Research. This is based on the research firm’s analysis of the current repo rate cut cycle, which was initiated in February 2025 with a 0.25% reduction.
The expected rate cut would benefit borrowers, particularly those with repo-rate-linked home or other loans, as the interest rates on these loans will decrease in sync with the repo rate. This would lead to lower monthly loan payments for borrowers.
SBI Research also forecasts that Consumer Price Index (CPI) inflation will moderate to 3.9% in Q4 FY25 and average 4.7% in FY25. In FY26, the inflation rate is expected to range between 4.0-4.2%, with core inflation at 4.2-4.4%.
The report notes that the RBI adjusts its repo rate at bi-monthly monetary policy meetings to keep a lid on inflation. The CPI inflation in February 2025, for instance, was at a seven-month low of 3.6%, with notable variations across states, including 7.3% in Kerala but only 1.5% in Delhi.
India’s exposure to US trade policies is relatively contained, but potential vulnerabilities still linger, according to the UBI Report.
A research report by the Union Bank of India suggests that India’s economy may be shielded from the full impact of US trade tensions due to its trade balance with the US. However, the final impact will depend on the contours of a trade deal between the two nations. The Indian Rupee has weakened by about 2% this year, despite the US dollar remaining weak. The Reserve Bank of India (RBI) has been working to combat the indirect impacts on liquidity and financial stability.
A slowdown in the global economy poses risks, but India may partially offset the impact through a weaker currency and lower oil prices. Higher tariffs on intermediate goods can increase production costs, leading to reduced profit margins for producers. India’s key exports, such as automobiles, gems and jewelry, steel, aluminum, pharmaceuticals, and textiles, are heavily dependent on the US market.
If US protectionist policies lead to retaliatory tariffs or import substitution measures from India, it could disrupt trade flows and impact businesses. Commodity-linked sectors, such as energy and metal producers, face unique challenges and opportunities due to global price fluctuations. Markets and investors remain cautious due to President Trump’s shifting stance on trade policies, which has created economic uncertainty.
Concerns over a potential US recession have resurfaced, with weaker consumer spending, declining business confidence, and unpredictable policy decisions affecting growth projections. The five-year breakeven inflation rate in the US has risen from 1.9% in September 2024 to 2.6% in February 2025, indicating higher inflation expectations. The report concludes that India’s policymakers must navigate these uncertainties to maintain stability and growth, while a trade deal with the US will be crucial in mitigating the impact of trade tensions.
IndusInd Bank has decided to engage an independent firm to investigate apparent irregularities in its derivative accounts, according to reports by The Economic Times.
IndusInd Bank is set to appoint an independent firm to investigate discrepancies in its derivatives business, following a Reserve Bank of India (RBI) directive. The bank had been under scrutiny after it was found to have deviated from the regulatory norms and guidelines in its derivatives dealings.
According to sources, the bank had issued derivative products to its customers without proper due diligence, resulting in potential losses for the bank. The RBI had recently detected the irregularities and ordered an investigation, prompting the bank to take swift action to rectify the situation.
As a result, IndusInd Bank has decided to appoint an independent firm to investigate the matter, which is expected to be completed in a few weeks. The investigation firm will examine the bank’s derivatives business, identify the irregularities, and suggest corrective measures to ensure compliance with regulatory norms.
The bank has also sought the assistance of the RBI to conduct the investigation and recommendations to strengthen the derivatives business. The bank is also reviewing its internal processes and procedures to ensure that they are in line with the regulatory requirements and best practices.
It is worth noting that IndusInd Bank is not the only bank to face such issues. Several other banks and financial institutions in India have similarly run into difficulties with their derivatives businesses, raising concerns about the overall health of the banking sector.
The appointment of an independent firm to investigate the matter is a significant step in addressing the concerns and restoring confidence in the bank’s operations. The bank’s commitment to transparency and accountability in handling the issue demonstrates its commitment to maintaining the trust of its customers, investors, and stakeholders.
In conclusion, IndusInd Bank’s decision to appoint an independent firm to investigate its derivatives business is a prudent step in addressing the concerns raised by the RBI and restoring confidence in the bank’s operations. The bank’s commitment to transparency and accountability is commendable, and it is expected to emerge stronger and more resilient from this challenge.
J&K Bank launches comprehensive month-long awareness initiative to educate public on consumer rights
To mark World Consumer Rights Day on March 15th, Jammu and Kashmir Bank has launched a month-long awareness campaign to educate its customers about their rights and grievance redressal mechanisms. The initiative is aligned with the Reserve Bank of India’s (RBI) efforts to enhance public awareness about consumer protection and responsible banking. The campaign highlights the key themes of the RBI’s Charter of Customer Rights, including the right to fair treatment, transparency, fair and honest dealing, suitability, privacy, and grievance redressal and compensation. The bank is also emphasizing the importance of timely compensation for financial losses resulting from deficiencies in banking services.
The MD & CEO of Jammu and Kashmir Bank, Amitava Chatterjee, stated that empowering customers with knowledge about their rights is essential for responsible banking. The campaign aims to ensure that customers are well-informed about their rights, enabling them to make prudent and secure financial decisions. The bank is committed to upholding the highest standards of customer service and addressing grievances promptly and fairly.
The campaign is being rolled out through various channels, including television, radio, print media, and social media platforms. The bank is also utilizing its network of business correspondents, financial literacy centers, and signages to disseminate information through interactive sessions. This initiative demonstrates the bank’s dedication to customer-centric banking and its commitment to strengthening its relationship with its valued customers.
Starting from April, will a standard five-day banking week become the norm? The government has made its intentions clear: [insert clarification/apiel on the government’s statement].
A recent news report by Lokmat Times has sparked speculation that Indian banks will switch to a 5-day workweek starting from April 2025, citing a new regulation allegedly issued by the Reserve Bank of India (RBI). According to the report, banks would remain closed on all Saturdays and Sundays, following the same schedule as government offices. However, the Press Information Bureau (PIB) has debunked this claim as “fake news”, stating that the RBI has not issued any official notification on this matter.
There have been discussions between the RBI and the Indian Banking Association (IBA) regarding a 5-day workweek for banks, which would better balance employees’ professional and personal lives. However, the current guidelines allow for banks to be closed on the second and fourth Saturdays of every month, while remaining open on the first, third, and fifth Saturdays.
The possibility of a 5-day workweek for banks is uncertain, as the RBI has not confirmed any changes. The banking unions have been advocating for a reduction in the workweek, citing global banking norms and the need for better employee welfare. While the report by Lokmat Times has sparked widespread speculation, the PIB has clarified that any changes to the banking schedule would be communicated through official channels. As of now, banks will continue to operate on the existing schedule, with Sundays remaining a non-working day.
IOB secures board approval to raise Rs 10,000 crore through infrastructure bonds
Indian Overseas Bank has received approval from its board to raise Rs 10,000 crores through the issuance of long-term infrastructure bonds. The funds will be used to finance and refinance infrastructure and affordable housing projects. This move is part of the bank’s strategy to cope with the intense competition for deposits in the current financial year. Other public sector banks, such as Bank of Maharashtra and Punjab National Bank, have also raised funds through long-term infrastructure bonds in recent months.
The funds raised through these bonds can be used only for lending to infrastructure and affordable housing projects, as per Reserve Bank of India (RBI) rules. The maturity period of these bonds must be at least seven years. Long-term bonds are a cheaper source of funds for banks, as the funds raised through these bonds are exempt from regulatory reserve requirements such as cash reserve ratio and statutory liquidity ratio.
The approval to raise funds through long-term infrastructure bonds is a significant step forward for Indian Overseas Bank, which will enable it to support the growth of infrastructure and affordable housing in the country. The bank’s strategy to raise funds through long-term infrastructure bonds demonstrates its commitment to supporting the country’s economic growth and development.
Finance Minister proposes to the RBI to issue 100-year government bonds, a long-term investment opportunity for the market.
Life Insurance Corporation of India (LIC) has made a request to the Reserve Bank of India (RBI) to introduce 100-year government bonds. This move is aimed at reducing the country’s growing fiscal deficit and attracting long-term investors to the country’s debt market. The LIC is one of the largest life insurers in the country and has been actively seeking to expand its investment options.
Additionally, the CEO of LIC, Sandip Das, announced that the corporation is likely to make an announcement on its acquisition of a stake in a health insurance firm by March 31, 2023. According to Das, the exact shareholding will depend on the valuation of the insurance firm. This move is part of LIC’s efforts to diversify its business and venture into new areas.
The request for 100-year government bonds is seen as a welcome move by the RBI, which has been struggling to manage the country’s high fiscal deficit. The RBI has been encouraging institutions like LIC to invest in long-term government securities to reduce the country’s debt burden and attract foreign investors.
The request comes at a time when the Indian government is planning to sell its stake in several state-run companies to attract foreign investors. The government has been looking to divest its stake in several public sector undertakings (PSUs) to raise funds and improve its balance sheet.
The CEO of LIC, Sandip Das, has expressed his confidence in the insurance firm’s ability to make a successful foray into the health insurance sector. “We have a strong franchise and a large distribution network, which will allow us to tap into the growing health insurance market,” he said.
The move by LIC to venture into health insurance is seen as a strategic shift by the company to diversify its portfolio and reduce its dependence on traditional life insurance products. The insurance firm is expected to make an announcement on its acquisition of a stake in a health insurance firm by the end of March 2023.
Here’s a reworded version:India’s IndusInd Bank Secures Rs 11,000 Crore Through Successful CD Issue, Confidence-Building Move
IndusInd Bank raised 11,000 crores in certificates of deposit (CDs) on Monday, a significant move to shore up its funding position following a 2,000 crore accounting discrepancy in its derivatives book. The bank issued CDs across six maturities, ranging from three months to one year, with prices ranging from 7.80-7.90%. While the bank raised money at a slightly higher rate compared to its peers, the fact that it was able to mobilize 11,000 crores on a single day suggests that investors have regained confidence in the bank following the Reserve Bank of India’s (RBI) assurance that the bank is well-capitalized and has a satisfactory financial position.
The fundraising has allayed investor concerns about IndusInd’s ability to raise funds, given that nearly 50.8% of its promoter’s stake is pledged. The Hinduja Group, which has a 16.29% stake in the bank, is also considering selling a significant portion of its stake to raise funds.
The bank’s one-year CDs were priced at 7.90%, which is higher than its peers, such as Axis Bank, which offered 7.62% for the same maturity. However, the bank’s ability to create a liquidity buffer of 11,000 crores in a single day is a significant achievement, according to the treasury head of a private bank. The lack of trades in IndusInd’s bonds in the secondary market suggests that investors are preferring to invest directly in the primary market.
The RBI’s directive to have the bank complete remedial actions by the end of the quarter is also seen as a positive development, as it indicates that the bank is committed to addressing its accounting lapses and restoring investor confidence. Overall, the bank’s successful fundraising efforts on Monday are seen as a positive sign that the market is returning to normal, and that investors are regaining confidence in IndusInd Bank.
RBL Bank’s Chief Financial Officer Jaideep Iyer is still seeking clarity from the Reserve Bank of India (RBI) on liquidity concerns.
According to Jaideep Iyer, Head of Strategy at RBL Bank, the Reserve Bank of India (RBI) should infuse more durable liquidity in the financial system to enable bankers and customers to benefit from its rate cuts. Despite the RBI’s recent rate cut, bulk deposit rates and short-term certificate of deposit (CD) rates have not decreased, and are instead marginally higher than before the rate cut. Iyer believes that the RBI’s decision to cut the repo rate is “a little peculiar” and that focusing on durable liquidity is crucial, as variable rate auctions are short-term.
Iyer notes that the RBI has taken steps to infuse liquidity into the system over the past one-and-a-half months, but more comfort is needed. He expects the RBI to announce another one lakh crore of Open Market Operations (OMOs) to provide durable liquidity, which he defines as consistent liquidity from the beginning of the net financial year.
Iyer emphasizes that a accommodative liquidity situation is necessary for bankers and customers to benefit from the rate cuts. He suggests that the RBI should prioritize durable liquidity, as variable rate auctions are short-term measures, and the current situation is “a little peculiar” with the RBI on a rate cut cycle. Overall, Iyer’s views highlight the importance of effective communication and implementation in achieving the intended benefits of rate cuts and maintaining a healthy financial system.
7 Top-Notch Small Finance Banks Offering Attractive Fixed Deposit Interest Rates
The Reserve Bank of India (RBI) has established a special sector of the banking industry, known as small finance banks, which aims to promote financial inclusion for underserved segments of the economy. These banks are designed to provide access to banking services for micro and small businesses, small and marginal farmers, unorganized sector entities, and small business units that are not currently served by mainstream banks.
The RBI has licensed several small finance banks in India, which operate under the regulatory framework of the RBI. These banks offer a range of services, including deposit accounts, credit, and other financial products. One of the key features of small finance banks is their ability to offer fixed deposit (FD) accounts, which can help individuals and businesses earn interest on their deposits.
Here is a list of some of the small finance banks in India, along with their fixed deposit (FD) interest rates:
* Airtel Bank: 6.15% to 7.10% for 1-year FDs
* Au Small Finance Bank: 6.00% to 7.00% for 1-year FDs
* Equitas Small Finance Bank: 6.00% to 7.50% for 1-year FDs
* ESAF Small Finance Bank: 6.00% to 7.50% for 1-year FDs
* Janalakshmi Financial Services: 6.00% to 7.50% for 1-year FDs
* Suryoday Small Finance Bank: 6.00% to 7.50% for 1-year FDs
Please note that the interest rates may vary depending on the bank, deposit tenure, and other factors. It is always a good idea to check with the bank or their website for the most up-to-date information on their fixed deposit rates.
Overall, small finance banks have made significant progress in extending financial inclusion to underserved segments of the Indian economy. By providing access to banking services, such as fixed deposit accounts, these banks are helping to empower individuals and businesses to achieve their financial goals and improve their standard of living.
India’s retail inflation slumps to its lowest point in seven months in February
India’s retail inflation rate eased to a seven-month low of 3.61% in February 2025, driven by a significant moderation in food inflation, particularly in perishable goods and protein-based food items. Food inflation fell below 4% for the first time in nearly two years, and its lowest in 21 months. The decline in vegetable prices and pulses prices contributed to the fall in food inflation, with vegetable prices deflating by 1.1% year-on-year.
However, core inflation, which excludes food and fuel, surged to its highest level in seven months, driven by the sharp increase in gold prices and the depreciation of the Indian rupee.
The moderation in inflation has strengthened expectations of a back-to-back rate cut in the upcoming April meeting of the Reserve Bank of India (RBI), with economists predicting another 25 basis points (bps) rate cut. The RBI had implemented a 25 bps rate cut in February, reducing the policy rate from 6.5% to 6.25%.
The long-term inflation projections suggest that inflation is expected to moderate to 3.8% by Q3 FY2026, with the fiscal year closing with a policy rate of 5.75%. However, challenges remain in monetary policy transmission.
The key highlights are:
* Retail inflation rate at a 7-month low of 3.61%
* Food inflation at a 21-month low of 3.75%
* Vegetable and pulses prices declining
* Fruits and edible oil prices increasing
* Core inflation at a 7-month high, driven by gold prices
* Repo rate cut in February from 6.5% to 6.25%
* Expected 25 bps rate cut in April 2025 meeting
* FY26 inflation forecast at 4.2%
Access a Range of Small Finance Financial Institutions
AU Small Finance Bank has announced a reduction in interest rates for fixed deposits (FDs) effective from March 10, 2025. The new interest rates range from 3.75% to 8.50% per annum for general customers, while senior citizens can earn interest rates ranging from 4.25% to 8.77% per annum. The bank has reduced its FD interest rates in response to the Reserve Bank of India (RBI)’s recent decision to reduce the repo rate.
The bank’s previous FD interest rates for general customers ranged from 8.10% to 8.60%, while senior citizens could earn rates between 8.60% to 8.24%. The revised rates are effective from March 10, 2025, and are available for deposits up to Rs. 3 crore.
The reduction in interest rates is a common trend among banks, as the RBI’s repo rate cut has led to a decrease in FD interest rates. Despite this, AU Small Finance Bank is still offering competitive rates, making it a good option for those looking to invest in FDs.
Senior citizens can benefit from the higher interest rates offered by the bank, with maximum returns of 8.50% for FDs with a tenure of 18 months. The bank’s FDs also offer flexible tenures ranging from 7 days to 10 years, allowing investors to customize their investment plans according to their financial goals.
In conclusion, while the reduction in interest rates may not be ideal for FD investors, AU Small Finance Bank is still a good option for those looking to invest in FDs. The bank’s competitive rates, guaranteed returns, and flexible tenures make it a good choice for both general customers and senior citizens. It is recommended to lock in FDs before banks reduce interest rates further, and senior citizens may want to consider FDs with a tenure of 18 months for maximum returns.
The Reserve Bank of India (RBI) is now accepting applications for the recognition of Self-Regulatory Organisations (SROs) to operate in the account aggregator ecosystem, ET LegalWorld reports.
The Reserve Bank of India (RBI) has released a framework for recognizing Self-Regulatory Organizations (SROs) for the account aggregator (AA) ecosystem. The account aggregator ecosystem was introduced by the RBI in 2016 to facilitate the secure and seamless exchange of financial information between financial information providers and financial information users. The RBIAA framework operates under the purview of various financial sector regulators, including RBI, Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), and the Pension Fund Regulatory and Development Authority (PFRDA), as well as the Department of Revenue.
The AA ecosystem is complex, with multiple regulated entities (REs) operating under different regulatory environments, requiring frequent coordination to address operational issues such as dispute resolution, standardized agreements, and common services. To support the adoption and stabilization of the AA ecosystem, the RBI is seeking to establish a dedicated SRO for the AA ecosystem.
The primary responsibility of the SROAA would be to promote best business practices and controls, establishing minimum benchmarks and conventions for professional market conduct among its members. The SROAA would be expected to operate with transparency, professionalism, and independence, fostering greater confidence in the integrity of the ecosystem. Compliance with the highest standards of governance, as prescribed in the Companies Act, 2013, is a prerequisite for an effective SROAA.
The RBI has invited applications for recognition of SROAA through the PRAVAAH portal, with the deadline set for June 15, 2025. The SROAA is intended to promote a smooth and stable AA ecosystem, ensuring the secure and efficient exchange of financial information among various stakeholders.
A boon for the masses, PNB joins SBI in making loans more affordable for the average citizen
Punjab National Bank (PNB), the second-largest government bank, has made borrowing more accessible by reducing interest rates on retail loans by up to 25 basis points. This move follows the Reserve Bank of India’s (RBI) recent repo rate cut. PNB has slashed rates on various loan types, including home loans, car loans, education loans, and personal loans, to offer customers a wider range of financial options.
The new interest rates are as follows: home loans begin at 8.15%, with equated monthly installments (EMIs) starting at Rs 744 per lakh. Car loans, including new and used vehicles, start at 8.50% per annum with EMIs beginning at Rs 1,240 per lakh. Additionally, PNB is offering an extra discount of 0.05% on car loans to promote sustainable mobility. Personal loans up to Rs 20 lakh can be applied for digitally, with revised interest rates starting at 11.25% per annum.
To make the process even more convenient, PNB is waiving processing fees and documentation charges until March 31, 2025. These new rates will take effect on February 10. This move is consistent with State Bank of India’s (SBI) recent decision to reduce interest rates on retail loans, including home loans, by 25 basis points. Overall, these rate cuts are expected to benefit customers and stimulate economic growth.
Canara Bank reduces lending rates on select tenures by 5-15 basis points, effective March 12, 2023.
Canara Bank, a major Indian public sector bank, has announced a reduction in lending rates on certain tenures by 5-15 basis points (bps), effective March 12, 2023. This move is aimed at boosting credit growth and supporting the economic recovery in the country.
The bank has reduced the marginal cost of lending rate (MCLR) by 15 bps, from 7.50% to 7.35%, for overnight and up to one-year tenure. For terms ranging from 1-3 years, the MCLR has been reduced by 10 bps, from 7.80% to 7.70%. For 3-5 year tenures, the MCLR has been lowered by 5 bps, from 8.20% to 8.15%.
This rate reduction is expected to make borrowing more affordable for customers, particularly for housing and personal loans. The bank’s decision is also seen as a response to the Reserve Bank of India’s (RBI) August 2022 circular, which asked banks to link their lending rates to external benchmarks, such as the RBI’s repo rate. The RBI has been lowering its repo rate to stimulate the economy, and Canara Bank’s rate cut is seen as a way to align its lending rates with the RBI’s monetary policy stance.
The rate reduction is also expected to boost business and employment in the economy by providing easier access to credit for small and medium-sized enterprises (SMEs) and individuals. SMEs are often the backbone of the economy, and access to credit can help them grow and create employment opportunities.
Canara Bank’s rate cut is seen as a positive move by financial experts, who point out that it can help accelerate economic growth and job creation. However, they also caution that more needs to be done to address structural issues affecting the banking sector, such as the high non-performing asset (NPA) levels and the need for more effective risk management.
Overall, Canara Bank’s decision to cut lending rates is seen as a significant step towards supporting the economy and providing relief to borrowers. However, it remains to be seen how other banks will respond to this development and whether the rate cuts can be passed on to customers in the form of lower interest rates.
Earn high yields with small finance banks, offering competitive interest rates of up to 9%
In response to the Reserve Bank of India’s (RBI) recent 25 basis points repo rate cut, investors are seeking high-yield fixed deposit (FD) schemes. Small finance banks have emerged as a promising option, offering interest rates as high as 9% per annum for specific tenures. Small finance banks are a category of banks established by the RBI to promote financial inclusion, providing essential banking services to underserved segments of society, such as small farmers, micro-businesses, and unorganized sector workers.
Some of the small finance banks offering high-yield FDs include Unity Small Finance Bank, NorthEast Small Finance Bank, Suryoday Small Finance Bank, Utkarsh Small Finance Bank, Jana Small Finance Bank, and Ujjivan Small Finance Bank. These banks offer a range of FD schemes with interest rates varying between 7% to 9% per annum, depending on the tenure.
It’s essential to note that small finance bank FDs are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to Rs 5 lakh per depositor. Experts recommend keeping deposits within this insured limit for maximum safety. While small finance banks offer higher interest rates, they operate differently from larger commercial banks, emphasizing the importance of risk management for investors.
In conclusion, small finance banks have emerged as a viable option for investors seeking high-yield FDs. However, it’s crucial to carefully evaluate the risk factors and consider the DICGC insurance limit to ensure maximum safety. With interest rates ranging from 7% to 9% per annum, small finance banks may be an attractive option for investors seeking sustenance and growth.