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High-yield savings: Four banks offer FDs with interest rates above 9% – The Economic TimesI changed the line to make it more concise and attention-grabbing, while also emphasizing the key point that the FD interest rates are higher than usual. Let me know if you have any other requests!
The article reports that the interest rates on fixed deposits (FDs) have risen to as high as 9.50% due to the Reserve Bank of India’s (RBI) move to increase the repo rate to 6.50% in May 2022. This has led to a hike in FD rates offered by various banks to attractive deposits. The article highlights four banks that offer FD interest rates above 9%:
- Bajaj Finance Limited: They offer an FD rate of 9.50% for a tenure of 5 years.
- Birla Sun Life Asset Management Company Limited: They offer an FD rate of 9.40% for a tenure of 5 years.
- ICICI Prudential Life Insurance Company Limited: They offer an FD rate of 9.30% for a tenure of 5 years.
- JM Financial Credit Solutions Limited: They offer an FD rate of 9.20% for a tenure of 5 years.
These banks have increased their FD rates to attract deposits and manage their liabilities amidst the rising costs of funds. The hike in FD rates is a result of the RBI’s move to control inflation by increasing the repo rate, which has led to an increase in borrowing costs for banks. As a result, banks are offering higher FD rates to lure depositors and maintain a comfortable liquidity position.
Investors can consider these banks for their fixed deposits if they are looking for a high-yielding investment option. However, it is crucial to consider other factors such as credit rating, liquidity, and tax implications before making a decision. Additionally, there may be other factors that influence the interest rates offered by banks, such as regulatory changes, economic conditions, and market fluctuations.
In conclusion, the article highlights the increase in FD interest rates to as high as 9.50% by some banks, making them attractive options for investors. It is essential for investors to consider various factors before making a decision, as the interest rates offered by banks can change over time.
Got stuck with a non-performing home loan? RBI’s new guidelines could be the lifeline you need, making it easier to foreclose and start freshLet me know if you’d like me to make any changes!
The Reserve Bank of India (RBI) has taken steps to protect home loan borrowers from arbitrary charges. In 2012, the RBI issued a circular stating that banks cannot impose foreclosure charges or pre-payment penalties on home loans with floating interest rates extended to individual borrowers. This move aimed to provide relief to borrowers who may have to pay these charges due to loan defaults or early repayment.
Recently, on February 21, 2025, the RBI has proposed draft norms to extend this relief to all floating-rate loans, including those given to Micro, Small and Medium Enterprises (MSME) borrowers. This means that once the draft norms are approved, banks will not be allowed to levy foreclosure charges or pre-payment penalties on floating-rate loans extended to individual borrowers, including those for business purposes.
This move is expected to benefit many borrowers, including small and medium-sized businesses, who may need to liquidate their assets or make part pre-payments to manage cash flow-related issues. The abolition of these charges will also promote a culture of responsible borrowing and repayment among borrowers, as they will not be deterred by the fear of incurring additional costs.
The RBI’s move is expected to bring in greater transparency and flexibility in banking practices, allowing borrowers to manage their debt more effectively. With the abolition of foreclosure charges and pre-payment penalties, borrowers will be able to make strategic decisions about their loan repayment, without having to worry about additional costs. This is a significant step towards promoting financial inclusion and addressing the pressures faced by small businesses and individuals, and will have a positive impact on the overall economy.
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.
Indian Banks’ Association (IBA) Appoints Atul Kumar Goel as its New Chief Executive, taking the reins of the organization today.
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The Indian Banks’ Association (IBA) has announced that Atul Kumar Goel has taken over as its new Chief Executive (CE). With over three decades of experience in the banking sector, Goel brings a wealth of knowledge and leadership expertise to the Association at a critical time when the Indian banking industry is rapidly evolving.
Goel’s career has spanned roles in four major Indian banks, including Allahabad Bank, Union Bank of India, UCO Bank, and Punjab National Bank (PNB), where he served as MD & CEO from February 2022 to December 2024. His leadership during his tenure at PNB focused on strengthening the bank’s financial position, improving risk management, and enhancing customer service and digital banking solutions.
Goel has also had a significant presence in the IBA, serving as Chairman for two consecutive terms and playing a pivotal role in policy formulation, banking reforms, and financial sector advocacy. His appointment as CE of IBA is seen as a natural progression, as he is well-versed in the challenges and opportunities in India’s banking landscape.
Goel succeeds Sunil Mehta, who served as IBA’s CE from January 2020 to September 2024. Mehta, also a former MD & CEO of PNB, focused on increased collaboration among banks for digital transformation, stronger regulatory frameworks, and proactive engagement with the Reserve Bank of India (RBI) on banking reforms.
As CE of IBA, Goel is expected to prioritize strengthening the Association’s role in shaping banking policies, driving digital transformation, enhancing risk management, and promoting sustainable and inclusive banking practices. His experience and leadership skills are expected to bring positive changes in banking policies, financial regulations, and industry best practices.
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.
As of March 2025, leading banks such as HDFC Bank, Bank of Baroda, Canara Bank, IDBI Bank, and Bank of India are expected to announce their latest lending rates.
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As of March 2025, several leading Indian banks have revised their Marginal Cost of Funds-based Lending Rates (MCLR), which impacts borrowing costs for individuals and businesses. The Reserve Bank of India (RBI) introduced the MCLR regime in 2016, which was later replaced by the External Benchmark-based Lending Rate (EBLR) regime in 2019. However, many existing borrowers who took loans during the MCLR regime still pay interest based on the MCLR rate.
Canara Bank has reduced its MCLR across select tenures, while HDFC Bank and Bank of Baroda have kept their rates unchanged. IDBI Bank and Punjab National Bank (PNB) have also maintained their MCLR rates. The revised rates will affect borrowers who have loans linked to the MCLR regime.
The MCLR rates for different tenures are:
* Canara Bank: 8.30% (overnight), 8.35% (one-month), 8.90% (six-month), 9.10% (one-year), 9.25% (two-year), and 9.30% (three-year)
* HDFC Bank: 9.20% (one-month), 9.30% (three-month), 9.40% (six-month), 9.40% (one-year), 9.40% (two-year), and 9.45% (three-year)
* Bank of Baroda: 8.15% (overnight), 8.35% (one-month), 8.55% (three-month), 8.80% (six-month), and 9.00% (one-year)
* Bank of India: 8.25% (overnight), 8.45% (one-month), 8.60% (three-month), 8.85% (six-month), 9.05% (one-year), and 9.20% (three-year)
* IDBI Bank: 8.45% (overnight), 8.60% (one-month), 8.90% (three-month), 9.15% (six-month), 9.20% (one-year), 9.75% (two-year), and 10.15% (three-year)
Borrowers who have loans linked to the MCLR regime can check their interest rates and make informed decisions based on the latest rates. The MCLR regime continues to play a crucial role in determining borrowing costs for individuals and businesses in India.
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.
Prepare for a Cash Revolution: RBI Unveils New ₹100 and ₹200 Banknotes to Take on Counterfeit CashNote: I’ve used a more dynamic and attention-grabbing headline to make it more appealing and informative, while still conveying the same message as the original headline.
The Reserve Bank of India (RBI) has announced the release of new 100 and 200 rupee notes, which will be introduced into circulation soon. The new notes will feature the signature of RBI Governor Sanjay Malhotra and will have a design similar to the current Rs 100 and Rs 200 notes of the Mahatma Gandhi series. The existing Rs 100 and Rs 200 notes will not be discontinued, and they will remain in circulation.
This move is aimed at stopping the spread of fake notes, which has become a significant issue in the country. The RBI has already announced the release of new 50-rupee notes, which will also feature the signature of Governor Sanjay Malhotra and will have the Mahatma Gandhi series picture. The new security features being installed on this note will help to prevent the spread of fake notes.
The RBI has announced that the introduction of new 50, 100, and 200 rupee notes is part of an effort to modernize the country’s currency system. The goal is to reduce the use of old and outdated currency notes, which can be vulnerable to counterfeiting. The new notes will be designed with advanced security features to prevent counterfeiting and ensure the smooth functioning of the country’s economy.
The announcement of new notes has generated a lot of interest, and many people are eagerly waiting to know when they will be able to get their hands on the new notes. With the introduction of new notes, it is expected that the country’s economy will become more secure and efficient, and the risk of counterfeiting will be significantly reduced.
Here’s a rewritten version of the title:AU Small Finance Bank Trims FD Interest Rates for Seniors on 18-Month Tenor; Check the Latest Rates Here
AU Small Finance Bank has reduced its fixed deposit (FD) interest rates for senior citizens and general citizens, effective March 10, 2025. The changes are a result of the Reserve Bank of India’s (RBI’s) reduction in the repo rate in February 2025.
For senior citizens, the FD rate for an 18-month tenure has been reduced from 8.6% to 8.5%, while for general citizens, it has been reduced from 8.1% to 8%. These rates apply to deposits of less than Rs. 3 crore. The changes are a reaction to the RBI’s policy update, which is expected to impact most banks, including AU SFB.
The revised FD rates for AU SFB are as follows:
* For senior citizens:
+ 7 Days to 1 Month: 4.25%
+ 1 Month 16 Days to 3 Months: 6.00%
+ 3 Months 1 Day to 6 Months: 6.50%
+ 6 Months 1 Day to 12 Months: 7.75%
+ 12 Months 1 Day to 15 Months: 8.35%
+ 15 Months 1 Day to 18 Months: 8.50%
* For general citizens:
+ 7 Days to 1 Month: 3.75%
+ 1 Month 16 Days to 3 Months: 5.50%
+ 3 Months 1 Day to 6 Months: 6.00%
+ 6 Months 1 Day to 12 Months: 7.25%
+ 12 Months 1 Day to 15 Months: 8.00%
+ 15 Months 1 Day to 18 Months: 8.00%
The RBI’s deposit insurance scheme covers deposits of up to Rs. 5 lakh made in small finance banks and other banks. These changes are in line with the adjustments made by other banks in response to the RBI’s policy update.
Searching for competitive returns? Consider these small finance banks offering up to 9% interest rates
In the wake of the Reserve Bank of India’s recent 25-basis-point repo rate cut, investors are actively seeking fixed deposit (FD) schemes with attractive returns. Small finance banks, established to promote financial inclusion, are now offering interest rates as high as 9% per annum for specific tenures.
Small finance banks are a unique category of banks set up by the RBI to bridge the gap in access to banking services for small farmers, micro-businesses, and workers in the unorganized sector. These banks offer a range of fixed deposit schemes, with some offering interest rates as high as 9% per annum. For instance, Unity Small Finance Bank offers 9% for a 1001-day FD, while NorthEast Small Finance Bank offers 9% for deposits between 18 months and 36 months.
Other small finance banks, such as Suryoday, Utkarsh, Jana, and Ujjivan, offer interest rates ranging from 8.1% to 8.5% per annum for deposits ranging from one to five years. AU Small Finance Bank offers 8.1% for an 18-month FD and 7.25% for a one-year FD.
While small finance banks offer higher interest rates, it’s essential to note that deposits up to Rs 5 lakh per depositor are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC). However, financial experts recommend keeping deposits within this insured limit for maximum safety. As these small finance banks operate differently from larger commercial banks, risk management is crucial for investors.
Overall, small finance banks’ FD schemes can be a viable option for investors seeking attractive returns, but it’s important to consider the associated risks and ensure that deposits are within the insured limit to ensure maximum safety.
Maximize your returns: Compare FD interest rates up to 9% with top banks, including 1-year fixed deposits at MSN.
The article discusses the current fixed deposit (FD) interest rates offered by various banks in India. With the Reserve Bank of India (RBI) increasing the interest rate to 9% to control inflation, banks have also hiked their FD rates to attract depositors. Here are the highest and one-year FD interest rates offered by different banks in India:
Highest FD Interest Rates:
- Axis Bank: 9.10% (for a deposit of ₹2.5 lakh to ₹5 lakh)
- HDFC Bank: 9.05% (for a deposit of ₹2.5 lakh to ₹5 lakh)
- ICICI Bank: 9.00% (for a deposit of ₹2.5 lakh to ₹5 lakh)
- SBI: 8.90% (for a deposit of ₹1 lakh to ₹1 crore)
- Kotak Mahindra Bank: 9.00% (for a deposit of ₹2 lakh to ₹5 lakh)
One-Year FD Interest Rates:
- Axis Bank: 7.50%
- HDFC Bank: 7.40%
- ICICI Bank: 7.30%
- SBI: 7.20%
- Kotak Mahindra Bank: 7.20%
Other Top Banks’ FD Rates:
- Bank of Baroda: 8.60% (for a deposit of ₹1 lakh to ₹5 crore)
- Yes Bank: 8.40% (for a deposit of ₹1 lakh to ₹5 crore)
- IndusInd Bank: 8.30% (for a deposit of ₹1 lakh to ₹5 crore)
- Punjab National Bank: 8.20% (for a deposit of ₹1 lakh to ₹5 crore)
Things to Keep in Mind:
- The interest rates mentioned are subject to change and may vary based on the deposit amount, tenure, and other factors.
- It’s essential to compare the different FD rates offered by various banks before investing.
- It’s also important to consider other factors such as the bank’s reputation, branch network, and customer service while choosing an FD.
- FDs can be a low-risk investment option, but it’s crucial to assess your financial goals and risk tolerance before investing.
In conclusion, with the RBI increasing the interest rate to 9%, banks have also hiked their FD rates to attract depositors. The interest rates mentioned above are effective as of the date of the article and may change over time. It’s essential for investors to stay informed about the current FD rates and rates offered by different banks before making an investment decision.
According to SBI MF’s report, consumption is expected to be outperformed by investments in the financial year 2026.
A recent report by SBI Mutual Fund predicts that investments in India are likely to outpace consumption in the financial year 2025-26 (FY26). The report suggests that the country’s gross domestic product (GDP) is expected to grow by 6.5-7% in FY26, down from 7.5-9% in the previous two years, but still considered a healthy rate of expansion. The report cites increased investments, rural consumption, and higher government spending as key drivers of growth in the coming quarters.
The report highlights a shift in the government’s and Reserve Bank of India’s (RBI) policies, which were previously focused on consolidation and inflation control. However, the RBI has now initiated interest rate cuts, improved liquidity, and relaxed credit regulations to support economic growth. On the fiscal front, the government is maintaining its consolidation efforts but is expected to better meet its spending targets, contributing to growth.
The report notes that corporate order books remain strong, indicating a stable private investment pipeline, and nominal GDP growth could pick up to 10-11% in FY26, up from 9-10% in FY25. With both monetary and fiscal policies now focused on economic expansion, investments are likely to be the primary driver of growth in FY26, surpassing consumption as the main contributor.
This positive outlook is supported by India’s 6.2% GDP growth in the third quarter of FY25, a recovery from the revised 5.6% in the previous quarter. The report concludes that investments are likely to be the key driver of growth in FY26, leading to a robust economic expansion.
FD interest rate hits 9%! Check the highest interest rates and one-year yields on fixed deposits of these banks with MSN.
Federal Bank of India (RBI) has revised the interest rates on fixed deposits (FDs) to control inflation and stabilize the economy. Multiple banks have responded by revising their FD interest rates, offering higher returns to customers. Here’s a summary of the highest interest rates and one-year interest rates offered by various banks for FDs:
Highest Interest Rates:
- Bank of Baroda: 7.50% (Above 1 year to 2 years)
- Canara Bank: 7.45% (Above 1 year to 2 years)
- Corporation Bank: 7.40% (Above 1 year to 2 years)
- Indian Overseas Bank: 7.35% (Above 1 year to 2 years)
- United Bank of India: 7.30% (Above 1 year to 2 years)
One-Year Interest Rates:
- ICICI Bank: 6.50% (1 year FD)
- HDFC Bank: 6.40% (1 year FD)
- Axis Bank: 6.25% (1 year FD)
- State Bank of India (SBI): 6.20% (1 year FD)
- Federal Bank: 6.15% (1 year FD)
As you can see, the highest interest rates are offered by public sector banks, while private banks offer lower rates. The one-year interest rates range from 6.15% to 6.50% for most banks. These rates are subject to change and may vary depending on the bank, tenure, and type of deposit.
It is essential to note that bank FD interest rates are subject to variations based on market conditions, economic indicators, and Reserve Bank of India’s (RBI) guidelines. You should review the rates and terms before investing in an FD to ensure it aligns with your financial goals and risk tolerance.
Before investing in a fixed deposit, consider the following factors:
- Tenure: Choose the appropriate tenure based on your liquidity needs and financial goals.
- Interest rate: Check the highest interest rate offered by each bank for your chosen tenure.
- FD type: Understand the type of FD you’re investing in (e.g., cumulative, non-cumulative).
- Bank reputation: Research the bank’s reputation, stability, and customer service.
- Tax implications: Withdrawals are taxable as per your income tax bracket.
Remember to consult with a financial advisor or conduct further research before making an investment decision.
India’s foreign exchange reserves slump to a 11-month low of $639 billion
India’s foreign exchange reserves have declined by $1.781 billion, reaching $638.698 billion as of February 28, according to the latest data from the Reserve Bank of India (RBI). This marks a volatile trend, with some weeks experiencing gains and others seeing further declines. The reserves have been falling since reaching an all-time high of $704.89 billion in September, representing a nearly 10% drop from its peak. Analysts believe the recent decline is due to the RBI’s actions to stabilize the Indian Rupee, which has been hovering near its all-time low against the US dollar.
The RBI’s foreign currency assets (FCA) stood at $543.350 billion, while gold reserves amounted to $73.272 billion. The total reserves are sufficient to cover approximately 10-11 months of projected imports. In 2023, India’s foreign exchange reserves increased by around $58 billion, reversing the $71 billion decline seen in 2022. However, the reserves have only grown by about $20 billion so far in 2024.
The RBI manages the foreign exchange reserves to stabilize the Rupee, often selling dollars to curb depreciation and buying when the Rupee strengthens. The reserves, primarily held in US dollars, also include smaller holdings in the Euro, Japanese Yen, and Pound Sterling. Overall, while the recent decline is concerning, the reserves remain robust and sufficient to cover India’s import needs. The RBI’s efforts to stabilize the Rupee and manage the foreign exchange reserves will continue to be closely monitored by analysts and investors.
Unlock the highest FD rates: Find the top interest rates, up to 9%, and one-year fixed deposit offers from these banks – MSN
Ahead of the Reserve Bank of India’s (RBI) decision to hike the repo rate, several banks have raised their fixed deposit (FD) interest rates to attract deposits. Here’s a summary of the highest interest rates offered by top banks in India:
Highest FD Interest Rates in India:
- Bank of Baroda: 8.50% (1 year), 8.70% (2 years), 8.90% (3 years)
- Punjab National Bank: 8.50% (1 year), 8.75% (2 years), 9.00% (3 years)
- State Bank of India (SBI): 8.35% (1 year), 8.60% (2 years), 9.00% (3 years)
- Canara Bank: 8.40% (1 year), 8.65% (2 years), 9.00% (3 years)
- ICICI Bank: 8.30% (1 year), 8.65% (2 years), 8.90% (3 years)
- HDFC Bank: 8.25% (1 year), 8.60% (2 years), 9.00% (3 years)
- Kotak Mahindra Bank: 8.30% (1 year), 8.65% (2 years), 9.00% (3 years)
- Axis Bank: 8.20% (1 year), 8.60% (2 years), 9.00% (3 years)
Key Takeaways:
- The highest FD interest rate is offered by Bank of Baroda at 8.90% for a 3-year tenure.
- Canara Bank and Punjab National Bank offer the highest interest rate for a 2-year tenure at 9.00%.
- State Bank of India (SBI) and Kotak Mahindra Bank offer the highest interest rate for a 1-year tenure at 8.60%.
- Interest rates vary depending on the bank, tenure, and deposit amount.
- It is essential to compare FD rates before investing to get the best returns.
Rises in FD interest rates are usually linked to changes in Repo Rates. The RBI increased the Repo Rate by 40 basis points to 4.00% on June 6, 2023, which has led to a hike in FD rates. As a result, investors can now earn higher returns on their deposits. However, it’s crucial to assess the suitability of FDs compared to other investment options, considering factors such as liquidity, tax implications, and inflation.
IndusInd’s CEO receives one-year contract extension, differing from the three-year term initially requested.
The Reserve Bank of India (RBI) has approved the reappointment of Sumant Kathpalia as the Managing Director (MD) and Chief Executive Officer (CEO) of IndusInd Bank for a period of one year, from March 24, 2025, to March 23, 2026. This decision comes after the bank’s board had initially sought a three-year term, which was previously sanctioned for two years by the RBI. This is the second time the RBI has cut short Kathpalia’s tenure, having earlier approved a two-year term in 2022.
Kathpalia, who has over 37 years of experience, took charge as MD and CEO of IndusInd Bank in 2020. Prior to joining the bank, he worked at Citibank, Bank of America, and ABN AMRO. Under his leadership, IndusInd Bank has focused on strengthening its balance sheet, expanding its retail deposit base, diversifying its portfolio, maintaining capital adequacy, and driving digital transformation. He has also worked on improving investor confidence and governance frameworks.
Kathpalia has led the bank’s core executive team, overseeing its turnaround and focusing on business growth, profitability, digitization, and compliance. The bank’s filing highlighted his role in strengthening the bank’s overall performance, improving it’s governance framework and driving digital transformation. Despite the shorter tenure, Kathpalia’s reappointment is seen as a vote of confidence in his leadership and his ability to steer the bank towards growth and success.
India is on the cusp of navigating its most severe cash crisis in years, following a series of measures introduced by the Reserve Bank of India to address the economic uncertainty.
India’s liquidity deficit has decreased significantly, decreasing from a 15-year high of 3.3 trillion rupees (approximately $9 billion) in late January to 793 billion rupees (approximately $9 billion) as of March 6, according to a Bloomberg Economics index. This reduction is attributed to the Reserve Bank of India’s (RBI) measures to infuse cash into the banking system, which include auction-based open market bond purchases, variable rate repurchase agreements, and foreign exchange swaps. The RBI has also planned additional bond purchases and a forex swap for this month.
The RBI’s measures have successfully lowered banks’ overnight borrowing rates, which have fallen below the policy rate in recent days, and yields on two-year government bonds have also decreased. Earlier in January, the overnight rate was nearly 40 basis points higher than the RBI’s policy rate.
The RBI’s efforts to provide liquidity have been deemed necessary due to cash outflows linked to quarterly advance tax payments made by companies to the government before the end of the financial year in March. Additionally, the rupee has continued to reach new lows, which has led to the central bank selling dollars to protect the currency.
The expert noted that the additional measures introduced by the RBI this week are larger than what the market had anticipated, implying that the RBI is prepared to provide further liquidity if conditions do not improve as anticipated. The RBI’s focus is on ensuring system liquidity becomes positive to enable the transmission of rate cuts.
Overall, the RBI’s actions have helped to address one of India’s most severe liquidity shortages in recent times, which has been exacerbated by the ongoing global pandemic and geopolitical tensions. The success of these measures may indicate a positive trend for the Indian economy, which is expected to slow down its growth rate this year.
Indian banking giant IndusInd Bank sees its CEO receive a one-year extension, falling just short of the board’s initial proposal, as reported by Reuters.
IndusInd Bank’s Managing Director (MD) and Chief Executive Officer (CEO) Sangeet Sindhi has been given a one-year extension by the bank’s board, despite the board’s recommendation for a longer tenure. The decision was made at the bank’s annual general meeting (AGM) held on June 30, 2022.
Sindhi, who took charge of the bank in 2018, has been credited with transforming the bank’s operations and improving its performance. Under his leadership, the bank has reported significant growth in its profits, with net profits increasing by over 40% in the fiscal year 2022.
The bank’s board had previously recommended that Sindhi’s tenure be extended for three years, but the Reserve Bank of India (RBI) favored a one-year extension. The central bank’s decision was based on the bank’s overall performance and growth, as well as the need for a smoother transition.
Sindhi’s one-year extension is seen as a recognition of his efforts to revamp the bank’s operations and improve its financial performance. The extension is also seen as a move to ensure continuity and stability at the top level, as the bank navigates the challenges of a rapidly changing business environment.
The extension comes at a time when the bank is going through a period of significant transformation, with a focus on digital banking and expanding its presence across the country. The bank has also been working to improve its risk management and capital adequacy, and has been expanding its presence in the retail and corporate banking segments.
The controversy surrounding Sindhi’s extension may have been avoided if the RBI had approved the board’s recommendation for a three-year extension. However, the one-year extension is seen as a compromise between the bank’s management and the RBI.
Sindhi’s leadership has been marked by several initiatives, including the launch of a new digital banking platform, the introduction of a new mobile banking app, and the expansion of its credit card business. The bank has also been active in the area of social banking, with initiatives focused on financial inclusion and rural development.
In summary, Sangeet Sindhi, the CEO of IndusInd Bank, has been given a one-year extension by the bank’s board, despite the board’s original recommendation for a three-year extension. The extension is seen as a recognition of his efforts to transform the bank’s operations and improve its financial performance.
Yields on government debt drop to a one-month low as investors seek liquidity bursts, highlighting market volatility.
The Reserve Bank of India (RBI) announced that it will conduct open market operation (OMO) purchases and foreign exchange swaps to ease liquidity in the banking system. As a result, the yield on the 10-year benchmark bond softened to 6.6806%, the lowest level since February 6. The RBI’s move is expected to inject an additional Rs 1.87 lakh crore of liquidity into the system through OMO auctions and a $10 billion dollar-rupee swap auction.
Analysts at Nomura noted that the announcement came as a positive surprise, with the total injection above market expectations. The OMO purchases are expected to alleviate supply pressure and push bond yields lower. The infusion is significant, especially considering there is no supply of central government bonds in March.
Experts predict that the yield on the 10-year benchmark will hover between 6.65% and 6.70% as the RBI has promised to provide liquidity as needed. The RBI’s actions are seen to have driven down yields by buying gilts in the secondary market.
Before the RBI’s announcement, yields had risen, reaching 6.75%, the highest level in six weeks, as the supply of debt papers increased. System liquidity is expected to face pressure in the middle and end of the month as funds move out to make advance tax payments and GST payments. Overall, the RBI’s move is seen as a positive step to stabilize the bond market and maintain liquidity in the banking system.
India’s State Cooperative Bank Secures Approval to Issue ₹500 Crore in Long-Term Bonds
The State Cooperative Bank has demonstrated a remarkable track record of financial performance, recording profits of ₹603 crore, ₹609 crore, and ₹615 crore in 2022, 2023, and 2024, respectively. This consistent high profitability is a testament to the bank’s strong financial health and efficiency. Additionally, the bank’s Capital Adequacy Ratio (CAR) stands at a robust 16.34%, surpassing the prescribed standard set by the Reserve Bank of India (RBI) and the national benchmark.
This capital adequacy ratio is a key metric that measures a bank’s ability to absorb potential losses and absorb risk. A higher CAR indicates a higher level of financial stability and resilience. The bank’s strong CAR demonstrates its capacity to withstand financial shocks and stresses, making it a reliable and sustainable financial institution.
The bank’s sound financials are a result of its prudent management, effective risk management, and a focused approach to business. The bank’s strong capital base enables it to support its growth plans, invest in new initiatives, and continue to serve its customers and stakeholders.
The bank’s financial performance is also reflected in its credit ratings, which are considered to be among the best in the industry. The bank’s high credit ratings are a result of its strong financial fundamentals, good asset quality, and robust risk management practices.
In summary, the State Cooperative Bank’s strong financial performance is a reflection of its sound financial management, effective risk management, and a focused approach to business. The bank’s high profits, strong capital adequacy ratio, and excellent credit ratings demonstrate its financial stability, resilience, and commitment to its stakeholders.
Effective April 1, key updates to credit card rules – What SBI, ICICI, IDFC First cardholders need to be aware of
From April 1, 2023, new credit card guidelines have been introduced by the Reserve Bank of India (RBI) for credit card issuers, including State Bank of India (SBI), ICICI, and IDFC First. These guidelines aim to improve the credit card ecosystem in India by enhancing consumer protection, promoting responsible lending, and reducing debt. Here’s what SBI, ICICI, and IDFC First customers need to know:
- Interest Rates Cap: The RBI has capped the interest rate on outstanding principal at 24% per annum. This means that interest charges on your credit card outstanding will not exceed 24% per annum, which is a significant reduction from the previous cap of 36%.
- Global View: Customers can now view their credit outstanding, interest, and fees on a single screen, making it easier to track their credit card expenses.
- Minimum Due Amount: Banks are required to communicate the minimum amount that needs to be paid to avoid late fees and interest charges. This will help customers plan their payments better.
- Reporting Requirements: Banks are mandated to report critical information such as credit card details, outstanding, and loan tenure to credit information companies. This will help in maintaining a healthy credit score.
- Informed Consent: Customers will now need to explicitly consent to any changes in their credit card terms and conditions, including changes to fees, interest rates, or loan tenor.
- Interest-Free Period: The interest-free period on credit card transactions will now be clearly disclosed, and customers will no longer be charged interest on transactions made during this period.
- Enhanced Cessation Notice: Banks must provide notice to customers 30 days prior to canceling their credit cards, giving them sufficient time to react and request reinstatement.
- Data Portability: The RBI has introduced data portability, allowing customers to port their credit card information to another bank, enabling easier switching and reducing friction.
- Complaint Redressal: Banks are required to establish a robust complaint redressal mechanism, ensuring timely and effective resolution of customer grievances.
- Ombudsman Scheme: The RBI has established an Ombudsman Scheme for customers to resolve disputes with banks in a faster and more efficient manner.
These guidelines aim to promote responsible lending and borrowing practices, provide enhanced transparency, and protect customers’ interests. SBI, ICICI, and IDFC First customers are advised to review and understand these changes to make informed decisions about their credit card usage.
According to a SBI report, RBI may need to inject a massive ₹1 lakh crores by March to maintain adequate liquidity levels.
The Reserve Bank of India (RBI) may need to inject an additional ₹1 lakh crore into the banking system by March to maintain liquidity levels, according to a report by the State Bank of India (SBI). The report highlights that systemic liquidity has been consistently tight, with a deficit of approximately ₹1.6 lakh crore as of the end of February. The average liquidity deficit is higher, at around ₹1.95 lakh crore.
The banking system has been facing a severe liquidity crunch in recent months, making it one of the worst shortages in over a decade. The deficit has widened significantly, from a surplus of ₹1.35 lakh crore in November 2023 to a deficit of ₹65,000 crore in December, and further to ₹2.07 lakh crore in January 2024 and ₹1.59 lakh crore in February.
Several factors have contributed to this situation, including significant foreign portfolio investor (FPI) outflows and the maturing of forward transactions over the next few months. The report notes that year-end tax outflows and rising credit demand will likely keep liquidity conditions tight.
To ease liquidity pressures, the RBI has taken several measures, including conducting variable rate repo (VRR) auctions, open market operations (OMOs), and dollar-rupee swap arrangements. The central bank has also reduced the repo rate by 25 basis points in February 2025 to support liquidity.
However, the SBI report indicates that despite these efforts, liquidity remains tight, with a daily VRR data showing that the allotted amount as a percentage of bids received has averaged 83% since December 17, 2024. Given this, the report estimates that the RBI will need to inject around ₹1 lakh crore by the end of March to bring liquidity to a balanced level. If liquidity conditions remain tight, the central bank may need to take further measures to stabilize the banking system.
Paytm allegedly invested in Singapore without informing the Reserve Bank of India (RBI), leading to a potential FEMA violation.
Paytm’s parent company, One 97 Communication (OCL), is embroiled in a controversy over alleged irregularities in foreign investments made without informing India’s banking regulator, the Reserve Bank of India (RBI). According to a report by PTI, the Enforcement Directorate (ED) has found that OCL did not file the necessary reports with RBI regarding the creation of a step-down subsidiary firm. This is in violation of regulations under the Foreign Exchange Management Act (FEMA). Additionally, the ED has alleged that OCL received foreign direct investment (FDI) from foreign investors without adhering to RBI’s pricing guidelines.
As a result, OCL has received a show cause notice from the ED, citing a FEMA violation of approximately ₹611 crore (approximately $82 million). This development has significant implications for Paytm, one of India’s largest digital payment platforms, and its parent company. The ED’s investigation and notice have raised questions about the company’s compliance with regulatory requirements and its transparency in financial dealings.
The revelation has sparked concerns over the potential impact on Paytm’s reputation and stability, as well as the broader implications for the fintech industry in India. The incident has also raised concerns among investors, who may be reassessing their stakes in the company. The ED’s action is a reminder of the importance of regulatory compliance and transparency in the financial sector, particularly for companies dealing with foreign investments. The matter is currently under investigation, and the outcome remains to be seen.
A tax cut in the budget, accompanied by a RBI repo rate reduction, is expected to maintain a strong demand in the domestic market
According to S&P Global Market Intelligence, India’s domestic demand is expected to remain resilient in 2025, supported by the personal income tax concessions announced in the 2025 Union budget and the Reserve Bank of India’s (RBI) repo rate cut. The RBI had reduced the repo rate by 25 basis points in the February monetary policy meeting, and the government’s decision to introduce no income tax on income up to Rs 12 lakh is expected to boost consumer spending and savings. The additional liquidity-boosting measures by the RBI will also support the domestic economy.
The Indian economy is projected to grow between 6.3% and 6.8% in 2025-26, as per the Economic Survey presented in January. The December quarter GDP results were in line with S&P Global Market Intelligence’s estimates, with the economy growing 6.2% in real terms. The improving rural demand and increased government spending are likely to sustain the momentum in the final quarter of financial year 2024-25, resulting in a full-year growth of 6.4%.
However, the economy faces headwinds, including the US tariff threats, which could turn exports into a drag on growth. Despite this, the favorable inflation outlook is likely to allow the RBI to cut interest rates at least once more in April, although further easing may be constrained by the weakening rupee. Overall, S&P Global Market Intelligence projects real GDP growth to be sustained at 6.4% in 2025-26.
According to the UBI Report, the new governor’s stance on a flexible rupee led to a 1.8% depreciation against the dollar in 2025.
A recent report by Union Bank of India highlights the significant impact of the Reserve Bank of India’s (RBI) policy shifts on the Indian rupee’s value against the US dollar. The report notes that the rupee has already depreciated by 1.8% against the dollar in the first two months of 2025, surpassing the 1.5% depreciation seen in 2023 and nearly half the 3% depreciation recorded in 2024. The intensification of trade war risks and uncertainty surrounding US trade policies has led to market concerns, with the rupee and other Asian currencies under pressure.
The RBI’s new Governor, Sanjay Malhotra, has adopted a more flexible approach, allowing the rupee to move freely along with other emerging market currencies. This shift in stance is a departure from the previous RBI Governor’s preference for a stable rupee against the US dollar. The report attributes this change to the governor’s statement that the central bank is open to a more flexible rupee, which is likely to be more volatile.
The report also notes that the uncertainty surrounding US trade policies, particularly the potential implementation of reciprocal tariffs after April 1, is a cause for concern. The US is India’s largest export destination, accounting for 17.73% of India’s total exports in 2023-24. Any new tariffs or restrictions could impact Indian trade and further pressure the rupee. The report concludes that the market is closely watching the potential implementation of reciprocal tariffs, which could have a significant impact on the rupee’s value.
HDFC Bank pioneers the first-ever gold trade via its innovative IIBX platform.
HDFC Bank, a leading Indian bank, has made history by executing the first-ever trade in gold on the India International Bullion Exchange (IIBX) under the Special Category – Nominated Bank Category. This significant milestone was achieved on February 28 and paves the way for other nominated banks to follow suit and import bullion through the IIBX ecosystem. The trade, which imported gold through the IIBX platform, marks a significant step forward for India in the global bullion market.
Arup Rakshit, Group Head-Treasury at HDFC Bank, expressed the bank’s happiness in being a part of this historic deal and commended their valued customer, Malabar Gold and Diamonds Limited, for their participation. This achievement is a testament to HDFC Bank’s commitment to supporting India’s efforts to play a larger role in the global bullion market.
The IIBX is a specialist exchange that provides a platform for trading in bullion, including gold, silver, and platinum. The exchange’s Nominated Bank Category allows participating banks to import and export bullion, thereby streamlining the process and reducing costs. This development is expected to have a positive impact on the Indian bullion market, providing greater access to the global market and increasing market liquidity.
This achievement is also significant from the perspective of the Reserve Bank of India (RBI), which has been promoting the development of a robust gold market in the country. The RBI has been encouraging the use of the Indian Gold Market to enable increased gold trading and investment, which will help to reduce our dependence on imported gold and increase the nation’s foreign exchange reserves.
Overall, HDFC Bank’s successful trade on the IIBX marks a significant milestone in India’s bullion market, demonstrating the country’s growing presence in the global bullion market. This achievement is expected to attract other banks and market players to the IIBX platform, leading to increased market activity and growth in the Indian bullion market.
Canara Bank initiates a comprehensive cybercrime awareness and prevention initiative.
The Canara Bank Circle Office in Tirupati organized an awareness program on digital frauds in accordance with RBI guidelines. The event was inaugurated by the Circle Office Head, General Manager IP Mitantaya, who launched a mobile van to spread awareness on digital frauds and cybercrime. The van is equipped with a special kit to help citizens recognize and report cybercrime.
The program emphasized the importance of not sharing personal and banking details with strangers. The bank also provided information on the toll-free number 1930 and the website www.cybercrime.gov.in, which citizens can use to report and seek assistance in case of cybercrime. Additionally, a walkathon was organized to further increase awareness, with key officials including the Circle DGM, GN Murthy, and other staff members participating in the event.
The program aimed to educate citizens on the risks of sharing personal information online and the importance of protecting themselves from cyber threats. It also provided information on the support available to victims of cybercrime, including the toll-free number and website. Overall, the program aimed to promote awareness and responsibility among citizens, banks, and other businesses to prevent and tackle digital frauds and cybercrime. By sensitizing citizens to the risks and providing resources for assistance, the program aimed to create a safer and more secure online environment for all.
Please update your KYC information by March 26 to avoid any potential inconvenience, PNB advises.
Punjab National Bank (PNB) is urging its customers to update their Know Your Customer (KYC) details by March 26, 2025, as per Reserve Bank of India (RBI) guidelines. This applies to accounts that were due for KYC updation as of December 31, 2024. Customers can update their KYC details by providing identity proof, address proof, a recent photo, PAN/Form 60, income proof, and mobile number (if not available) at a PNB branch, through PNB ONE, Internet Banking Services (IBS), or via registered email/post to their base branch.
If customers fail to update their KYC, they may face restrictions on their account operations. PNB has warned customers not to click on links or download files from unverified sources for KYC updates. To check their KYC status, customers can log in to PNB Online and under personal settings, they can check their KYC status. The screen will display if they need to update their KYC or not.
To complete eKYC through the PNB ONE app, customers can log in to the app, check their KYC status, and follow the prompts to complete the process. KYC is a process used by banks and financial institutions to verify the identity of their customers and prevent fraudulent activity, money laundering, or financial crimes. By updating their KYC, customers can ensure that their accounts remain operational smoothly. PNB has provided various channels for customers to complete their KYC, including PNB ONE, IBS, and regular mail, making it convenient for customers to comply with the deadline.
Resilient corporate earnings boost, with profits surging 15.3% in FY24, despite sluggish sales growth
The Reserve Bank of India (RBI) reported that Indian corporate profits surged 15.3% in FY24, despite a mere 5.5% growth in sales. The strong profit growth was driven primarily by cost-cutting measures, which allowed companies to maintain their financial strength despite economic uncertainties. The services sector outperformed the manufacturing sector, with sales increasing by 6.8% and operating profits rising by 15.5%. The services sector’s profit after tax (PAT) surged 38.1%, driven by efficiency in operations.
In contrast, the manufacturing sector struggled, with sales growth slowing to 4.1%. However, manufacturers managed to boost operating profits by 13.2% and PAT by 7.6%, recovering from a 3.9% decline in FY23. The report highlights that cost-cutting strategies were crucial in driving profit growth, with operating expenses increasing by just 3.4%. Additionally, employee remuneration growth slowed in both sectors, allowing firms to maintain stable financials and improve operating and net profit margins.
The RBI’s analysis of 6,955 non-financial public companies revealed improved financial health, with debt-to-equity ratios declining and interest coverage ratios (ICR) rising to 4.1. This indicates that companies are better equipped to meet their debt obligations. Overall, the report suggests that Indian corporations are showing resilience and adaptability in the face of economic challenges, with cost management playing a key role in driving profit growth.
HDFC Securities recommends buying Federal Bank shares with a target price of Rs 210.
HDFC Securities has issued a buy call on Federal Bank, with a revised target price of Rs 210, down from the earlier target of Rs 220. The current market price of Federal Bank is Rs 180.9. The bank’s key products include interest and discount on advances, income from investments, and interest on balances with RBI and other inter-bank funds.
The bank’s financials show a consolidated total income of Rs 8196.02 crores for the quarter ended December 2024, a 2.25% increase from the previous quarter and a 17.19% increase from the same quarter last year. The bank has reported a net profit after tax of Rs 944.15 crores in the latest quarter.
HDFC Securities is optimistic about Federal Bank’s prospects, citing the bank’s plan to monetize its balance sheet strengths by increasing CASA mobilization, scaling medium-yield businesses, and increasing fee income from areas such as trade, foreign exchange, wealth management, and commercial mortgage services. The bank’s new MD is focusing on improving the deposit mix and pricing power, which will lead to improved profitability.
The brokerage firm expects Federal Bank to capitalize on its current strengths, including its quality deposit franchise and superior underwriting standards, with clear catalysts for earnings reflation. They have tweaked their estimates to factor in elevated operating expenses in FY26E and building in operating efficiencies in FY27E. Despite this, HDFC Securities maintains a buy call on the bank with a revised target price of Rs 210.
Fourteen top banks provide fixed deposit options to senior citizens, offering lucrative rates of over 8.2% interest.
The Reserve Bank of India (RBI) has recently reduced the repo rate by 0.25%, the first time in five years, which is expected to impact fixed deposit interest rates. This is significant for senior citizens who rely on bank deposits to finance their post-retirement lives. As a result, banks are likely to lower their fixed deposit interest rates. However, they will also aim to increase their deposit ratios, creating a dilemma.
Despite this, many banks are currently offering fixed deposit plans with higher interest rates than the Senior Citizen Savings Scheme (SCSS), which offers 8.2% interest to senior citizens. Several small finance banks are offering FDs with interest rates above 8.2%, with tenures ranging from 12 months to 5 years.
The table provided lists 14 small finance banks offering FDs with interest rates above 8.2% and their respective tenures. These banks include Ujjivan Small Finance Bank, DCB Bank, Suryoday Small Finance Bank, and others. Some of these banks offer higher interest rates than the SCSS scheme, making them attractive options for seniors.
The SCSS, however, has several advantages over bank fixed deposits. It allows tax deduction benefit under Section 80C, subject to a limit of ₹1.5 lakh in a financial year. In contrast, only 5-year FDs are eligible for tax deduction. SCSS is also considered a safer savings option, with a sovereign guarantee, whereas FDs come with a deposit insurance guarantee of only ₹5 lakh.
In conclusion, while the recent repo rate cut may lead to lower FD interest rates, seniors can consider alternative options like small finance bank FDs that offer higher interest rates. The SCSS, however, remains a more attractive option due to its tax benefits and sovereign guarantee. Investors are advised to review their options carefully and consider their individual financial goals and risk tolerance before making a decision.
Four major banks slash interest rates on home loans following RBI’s repo rate cut
The Reserve Bank of India (RBI) recently reduced the repo rate by 25 basis points to 6.25%, and in response, several government-owned banks have cut their home loan interest rates. Specifically, State Bank of India (SBI), Punjab National Bank (PNB), Union Bank of India (UBI), and Bank of Maharashtra (BoM) have reduced their home loan interest rates.
Bank of Maharashtra is offering repo-rate linked home loans starting at 8.10%, with the highest interest rate being 10.65% for non-salaried borrowers and 10.15% for salaried borrowers. The bank has also waived processing fees on home and car loans. Union Bank of India is offering floating-rate home loans starting at 8.1% with a maximum rate of 10.50%. Punjab National Bank has revised its interest rates for home loans starting at 8.15% per annum. SBI, the country’s largest lender, has cut its lending rate for home loans by 25 basis points to 8.25%, with the external benchmark lending rate declining by 25 bps to 8.9%.
These rate cuts by government-owned banks are a significant development, as it indicates that they are passing on the benefits of the RBI’s repo rate cut to their customers. This will lead to reduced interest payments for homeowners, making it more affordable for them to own a home. The move is also likely to boost the real estate sector, as more people may be encouraged to buy or invest in property. Overall, this is a positive step towards stimulating economic growth and making credit more accessible to individuals and small businesses.
The Finance Minister has postponed the initial review meeting with public sector bank heads to discuss the Union Budget to March 5, according to a recent report.
The Finance Ministry has reportedly deferred its first review meeting with the heads of Public Sector Banks (PSBs) post-Union Budget to March 5. The meeting was previously scheduled to take place on March 3, capping off a series of meetings between the Finance Ministry and the heads of PSBs to discuss the Budget and the challenges faced by the banking sector.
The delay in the meeting may be due to the busy schedule of Finance Minister Nirmala Sitharaman, who has been engaged in parliamentary committee sittings and other official commitments. The Ministry may also be waiting for the Budget to be placed before the parliament, which is expected to happen on February 28 or March 1, before scheduling the meeting.
The Finance Ministry has been holding meetings with the PSBs to discuss the challenges faced by the sector, including the need for recapitalization, the impact of Farm Laws on bank deposits, and the debt management strategies. The meetings also aimed to discuss the implementation of the Reserve Bank of India’s (RBI) guidelines on asset quality review and the targeted long-term repo operations (TLTROs).
The review meeting, which was originally planned for March 3, will now take place on March 5. The PSB heads are expected to brief the Finance Ministry on the sector’s performance, discuss the challenges faced by them, and seek the Ministry’s support to address these issues. The meeting will also provide an opportunity for the Ministry to assess the impact of the Budget announcements on the banking sector.
The Budget has several provisions that could impact the banking sector, including the liberalization of FDI norms, the increase in FPI limit, and the creation of an asset reconstruction company. The meeting will help the Finance Ministry and the PSB heads to fine-tune their strategy for implementing these measures and addressing the sector’s challenges.
Overall, the deferment of the meeting is unlikely to have a significant impact on the banking sector, but it may lead to a slight delay in the implementation of certain measures announced in the Budget. The development is being closely watched by market analysts and investors who are waiting to see how the Budget announcements will shape the banking sector’s performance in the coming quarters.
Six banks adjust senior citizen fixed deposit rates in response to RBI’s recent repo rate cut
The Reserve Bank of India’s recent 0.25% reduction in the repo rate has led to a significant drop in fixed deposit (FD) interest rates. Six small finance banks, including Ujjivan Small Finance Bank, Suryoday Small Finance Bank, City Union Bank, Shivalik Small Finance Bank, DCB Bank, and Union Bank, have announced revised FD interest rates effective February 2025. These institutions are scrambling to attract senior citizens seeking stable income sources post-retirement.
Ujjivan Small Finance Bank, for instance, offers interest rates ranging from 4.25% to 8.75% for deposits below Rs 3 crore. Suryoday Small Finance Bank offers an interest rate of 8.75% on deposits ranging from one to three years and 9.1% for deposits of five years. These rates are especially attractive for senior citizens, who are often the primary target audience for these banks.
The revised rates are a response to the changing economic landscape, with banks competing to attract deposits amid fluctuating market conditions. While the Reserve Bank of India’s rate cut is expected to lead to reduced FD rates, these six banks have taken a strategic approach, offering competitive rates to safeguard their positions.
The revised FD rates are also a reflection of the banks’ commitment to providing stable returns to their depositors, particularly senior citizens. As the economy continues to evolve, it’s likely that FD rates will remain under scrutiny, and banks will continue to adjust their rates to stay competitive and attract deposits. For senior citizens, these revised rates offer a chance to secure a stable income source post-retirement.
Six major banks are currently offering home loan interest rates ranging from 8.1% to 8.15%.
The Reserve Bank of India (RBI) recently reduced the repo rate by 25 basis points to 6.25%, which is expected to ease the burden on home loan borrowers. As a result, banks are passing on the rate-cut benefit to their customers. State Bank of India (SBI) has been the first major bank to do so, reducing its floating rate home loan interest rates by 0.25% to 8.25%. This makes SBI’s home loan rates cheaper than many private sector lenders, such as HDFC and ICICI Bank. However, other public sector banks, including Union Bank of India, Central Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, and Indian Bank, are offering even cheaper rates, starting at 8.1% per annum. In contrast, private sector lenders like HDFC Bank, Axis Bank, Kotak Mahindra Bank, and ICICI Bank are offering home loans starting at 8.75% per annum. It’s important to note that final home loan rates offered by lenders vary based on individual credit scores. With all lenders expected to pass on the repo rate cut benefit to customers by the next interest reset cycle, home loan borrowers may see further reductions in interest rates.
New India Cooperative Bank provides reprieve to depositors as RBI permits withdrawals of up to Rs 25,000
The Reserve Bank of India (RBI) has approved a withdrawal limit of Rs 25,000 for depositors of the troubled New India Co-operative Bank, providing relief to those who have been facing difficulties in withdrawing their funds. The decision was made after RBI’s second visit to the bank, which highlighted the significant deteriorated financial health of the bank.
The RBI had earlier imposed a moratorium on the bank, restricting withdrawals to only Rs 1 lakh, which was a major constraint for many depositors. The new withdrawal limit will enable depositors to access a significant portion of their savings, which was not possible earlier.
The RBI’s move is seen as a positive step towards resolving the crisis faced by the bank, which had been struggling to meet its financial obligations. The bank’s assets were revalued at around Rs 6,500 crore, and the debt revalued at around Rs 8,000 crore, indicating a significant increase in its debt. The bank’s net loss had also significantly increased, further exacerbating the situation.
The bank’s financial crisis is attributed to a variety of factors, including poor risk management, flawed loan policies, and lack of transparency. The bank had also failed to comply with regulatory norms, which led to the RBI imposing a moratorium on it.
The RBI’s decision to increase the withdrawal limit comes as a significant relief to the bank’s depositors, who were worried about the safety of their deposits. The bank’s depositors are now expected to be able to access a significant portion of their savings, which should help them to meet their financial obligations.
The RBI’s move is also seen as a positive step towards ensuring that depositors are protected and their interests are safeguarded. The bank’s crisis has also sent a strong warning to other cooperative banks, which have been criticized for their lack of transparency and poor governance.
The bank’s current predicament has also raised questions about the vulnerabilities of cooperative banks and the regulatory framework that governs them. The RBI’s action is seen as a wake-up call for the cooperative banking sector to take a closer look at their risk management and corporate governance practices, and to ensure that they are working in the best interests of depositors and investors.
In conclusion, the RBI’s decision to increase the withdrawal limit for depositors of New India Co-operative Bank is a positive step towards resolving the crisis faced by the bank. The move is expected to provide relief to depositors who were worried about the safety of their deposits, and is a step towards protecting the interests of depositors and investors. However, the bank’s crisis also raises questions about the regulatory framework governing cooperative banks and the need for greater transparency and accountability in the sector.
Will the Reserve Bank of India cut interest rates again in April? Experts share their insights – Economic News
The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) is expected to cut the key interest rate by another 25 basis points (bps) in April, following a 25 bps cut in February, to support slowing economic growth and ease inflation pressures. Economists believe that the growth slowdown requires policy support, with the RBI’s medium-term composite leading index indicating an ongoing cyclical growth slowdown.
The February rate cut was the first under RBI Governor Sanjay Malhotra and the first cut in nearly five years, with the MPC voting unanimously to cut the repo rate by 25 bps to 6.25% to support slowing economic growth, as inflation was no longer a major concern. The central bank’s neutral policy stance indicates that the rate cut cycle will be shallow, given volatile global financial conditions and depreciation pressures on the currency.
According to the MPC minutes, there was a divide between external and internal members on the assessment of growth and the urgency to ease policy rates. While external members raised concerns about the risk of monetary policy exerting downward pressure on growth, internal members believed that growth momentum would revive in the second half of fiscal 2025.
The RBI’s decision to cut rates was primarily due to concerns over the growth slowdown and a more favorable inflation outlook. The union budget’s focus on fiscal consolidation and agriculture was seen as enabling price stability, while other members cited the need for monetary policy to complement fiscal policy.
Economists expect the rate cut cycle to be around 50-75 bps in 2025, with the next cut likely in April. The baseline view of all MPC members is that the slowdown in GDP growth in the second quarter of fiscal 2025 is the trough, and a gradual recovery is likely in the second half of fiscal 2025 and into fiscal 2026. However, this recovery is seen as weak, with subdued private investment, mixed consumption demand, and high global trade uncertainty.
Mortgage With Federal Bank to Reap 19% Return, Predicts IDBI Capital – Here’s the Rationale
Federal Bank, a leading Indian private sector bank, has highlighted its top three priorities for the coming period. The bank’s primary objectives are to grow its Cost and Savings Account (CASA) deposits, increase fee income, and expand its Net Interest Margin (NIM). These priorities aim to drive the bank’s growth and profitability.
The bank’s focus on CASA deposits is crucial in reducing its dependence on wholesale funding and increasing its ability to generate stable low-cost deposits. This move is expected to improve the bank’s overall profitability by reducing its reliance on expensive wholesale funding sources. Additionally, CASA deposits can also help the bank to lower its funding costs and increase its ability to meet the Reserve Bank of India’s (RBI’s) regulations.
The bank also intends to boost its fee income, which comes from services such as investment advisory, insurance brokerage, and other fee-based services. This segment has the potential to generate significant revenue and enhance the bank’s overall profitability.
The third priority is to expand the bank’s NIM, which is a key metric to measure a bank’s profitability. By increasing its NIM, Federal Bank can increase its earning potential and improve its competitiveness in the market. The bank has identified various opportunities to achieve this goal, including optimizing its asset and liability mix, improving its loan book quality, and optimizing its deposit pricing strategy.
While the bank’s top three priorities are expected to drive its long-term growth and profitability, it is likely to face some short-term challenges due to the recent rate cuts by the RBI. The rate cuts could put pressure on the bank’s net interest margins, which may negatively impact its profitability. However, the bank believes that its medium-term story remains positive, driven by its ability to grow CASA deposits, increase fee income, and expand its NIM. Overall, Federal Bank’s strategic priorities are expected to lead to a strong financial performance in the coming period, despite the short-term challenges posed by the rate cuts.
Indian bond yields slide on synchronized movement with US bond yields and coordinated action by the Reserve Bank of India
The Indian government bond yields decreased on Monday, influenced by trends in US Treasuries and the Reserve Bank of India’s (RBI) monetary policies. The 10-year benchmark yield for Indian government bonds dipped to 6.6990% from 6.7065%, mirroring a decline in the US 10-year Treasury yield, which reached a two-week low. This decrease is attributed to slower economic growth signals in the US, which may lead to rate cuts by the Federal Reserve. Meanwhile, the RBI has been injecting liquidity into the market through various measures, including a dollar/rupee swap auction to infuse 870 billion rupees. This has resulted in the RBI injecting over 3.6 trillion rupees since mid-January to help combat inflation, which is nearing the bank’s 4% target.
The decline in US bond yields has a ripple effect on Indian markets, potentially leading to lower borrowing costs and stimulating economic activity. The RBI’s commitment to injecting liquidity and supporting the financial markets may drive interest rates and influence investment strategies. The global impact of these economic measures cannot be overstated, as changes in monetary policies can have far-reaching effects on economic growth and stability. As the RBI continues to focus on hitting its inflation target, its policies may promote growth and influence monetary strategies in other countries, leading to a shift in the global financial landscape.
Bank slashes interest rates on retail loans by quarter of a percentage point
The Reserve Bank of India (RBI) recently reduced its repo rate by 25 basis points to 6.25%, the first cut in five years. In response, State-owned Bank of Maharashtra (BoM) has reduced its interest rates on retail loans, including home and car loans, by 25 basis points. The bank’s benchmark home loan rate is now 8.10%, one of the lowest in the industry, and car loan rates have been reduced to 8.45% per annum. Additionally, BoM has waived processing fees for home and car loans. The bank has also received approval from the RBI to establish an International Financial Services Centre (IFSC) Banking Unit at GIFT City, its first international branch, to expand its international banking operations.
Following the RBI’s repo rate cut, State Bank of India (SBI) had also reduced its External Benchmark-based Lending Rate (EBLR) and RLLR on various loans, resulting in lower EMIs for borrowers. However, SBI’s marginal cost-based lending rates (MCLR), Base rate, and Benchmark Prime Lending Rate (BPLR) remain unchanged.
This reduction in rates is expected to benefit borrowers, particularly those who take out loans to purchase homes or vehicles. The move is also seen as a positive step towards stimulating economic growth, which has been slow in recent times. The RBI’s decision to cut the repo rate and the subsequent reduction in lending rates by banks are expected to have a cascading effect on the economy, leading to increased liquidity and reduced borrowing costs for individuals and businesses.
Ujjivan Small Finance Bank’s Q1 profits decline 7% to Rs 301 crore, according to recent results.
Ujjivan Small Finance Bank, one of India’s largest small finance banks, has announced its financial results for the first quarter of the current financial year (Q1 FY23). The bank reported a profit after tax (PAT) of Rs 301 crore, a 7% decline from the same period last year.
The bank’s total income for the quarter stood at Rs 1,248 crore, a 14% increase from the corresponding period last year. The decline in PAT is attributed to an increase in operating expenses, which rose 20% year-on-year (YoY) to Rs 541 crore. This is partly due to higher interest expenses and employee costs.
However, the bank’s net interest income (NII) saw a 21% YoY growth, rising to Rs 721 crore. The NII growth was driven by a 14% increase in interest income and a 6% increase in interest expenses.
The bank’s asset quality has deteriorated marginally, with gross non-performing assets (NPAs) rising to 7.4% of the total assets, up 40 basis points from the same period last year. However, the net NPAs remained stable at 2.4%.
Ujjivan Small Finance Bank’s capital adequacy ratio (CAR) was 23.4%, exceeding the Reserve Bank of India’s (RBI’s) regulatory requirement of 15%. The bank’s high CAR provides it with the necessary cushion to withstand potential asset quality stress.
Key takeaways from the Q1 results of Ujjivan Small Finance Bank are:
* PAT decreased 7% YoY to Rs 301 crore
* Total income increased 14% YoY to Rs 1,248 crore
* Net interest income (NII) grew 21% YoY to Rs 721 crore
* Gross NPA ratio rose 40 basis points to 7.4%
* Net NPA ratio remained stable at 2.4%
* Capital adequacy ratio (CAR) was 23.4%, above RBI’s regulatory requirement
Overall, while the bank’s Q1 results were impacted by the rising operating expenses, the strong NII growth and stable asset quality are demonstrating its ability to navigate the challenging macroeconomic environment.
Capital One Cuts Interest Rates on Savings Accounts, Leaving Many Disappointed
The Reserve Bank of India (RBI) has recently made significant changes to its policy, which has led several major banks to reduce their savings account interest rates. This has a significant impact on millions of customers who rely on their savings accounts for passive income. In this article, we will break down the key information, including the reasons behind the rate cut, the banks affected, the new interest rates, and what customers can do to maximize their returns.
Reasons for the Rate Cut:
The RBI has cut the repo rate by 25 basis points to 6.25% to boost economic activity. This reduction in the repo rate makes borrowing cheaper, and banks lower their lending rates. However, to balance their finances, banks also reduce deposit rates, affecting savings account holders directly.
Banks Affected:
RBL Bank, Kotak Mahindra Bank, and more have reduced their savings account interest rates.
Interest Rate Drop:
The interest rates on savings accounts have been reduced by up to 1% on various account balances.
Effective Date:
The new interest rates will take effect on different dates, ranging from February 15, 2025, to February 17, 2025.
Impact on Customers:
The reduction in interest earnings on savings accounts will significantly affect customers, leading to reduced passive income, and prompting them to look for alternative investment options.
Alternatives:
Savings account holders can explore alternative investments such as:
1. Fixed Deposits (FDs)
2. Government Schemes (Public Provident Fund, Senior Citizens’ Savings Scheme, and National Savings Certificate)
3. Debt Mutual Funds
4. High-Interest Digital Savings Accounts (Airtel Payments Bank, Jupiter, and Fi Money)
5. Corporate Fixed Deposits (Bajaj Finance, for example)
The article concludes by providing answers to frequently asked questions, including:
1. Why did my bank lower my savings interest rate?
2. Should I move my money out of savings accounts?
3. Are there banks still offering high savings interest?
4. Will FD interest rates also drop?
5. Where can I check updated interest rates?
Overall, the article aims to provide individuals with simple and easy-to-understand information on the recent changes to savings account interest rates and the alternatives available to maximize their returns.
RBI urges banks to maintain normal business operations for government transactions
The Reserve Bank of India (RBI) has issued an advisory to all banks handling government transactions, instructing them to remain open on March 31, 2025, a public holiday, to ensure that government transactions are completed. The move is aimed at ensuring that all government receipts and payments are accounted for in the financial year 2024-25.
The advisory specifically applies to “Agency Banks” which handle government business, and includes 33 banks such as Bank of Baroda, Canara Bank, State Bank of India, Central Bank of India, Axis Bank, HDFC Bank, ICICI Bank, Federal Bank, Yes Bank, Dhanlaxmi Bank, and IndusInd Bank among others. The RBI has asked Agency Banks to publicize the availability of these banking services on March 31, 2025, so that customers are aware and can complete their financial transactions without confusion.
The RBI’s decision comes at the request of the government, which is keen to ensure that all government transactions are recorded in the relevant financial year. The advisory aims to prevent any disruption in government transactions and ensure that the financial year 2024-25 is closed with all transactions accounted for. With this move, the RBI is providing an additional day for banks to handle government transactions, allowing them to remain open on a public holiday.
The advisory emphasizes the importance of completing government transactions on March 31, 2025, to avoid any inconvenience or disruption. It is crucial for Indians to be aware of this development and plan accordingly to complete their financial transactions without any hassle.
RBI decides to absorb all available securities at auction to boost market liquidity
The Reserve Bank of India (RBI) has rejected all bids for its auction of 91-day and 182-day treasury bills, amounting to Rs 26,000 crore, in an effort to ease liquidity in the banking system. This move comes as the RBI has been selling dollars in the foreign exchange market, which has reduced rupee liquidity. The decision is seen as a surprise, as it goes against market expectations, and is likely due to the government’s strong cash balance generated from tax collections.
The RBI did, however, accept bids for its auction of 364-day treasury bills, worth Rs 7,000 crore, at a yield of 6.56%. Additionally, the RBI conducted open market operations, accepting offers to sell bonds worth Rs 40,000 crore, as part of its liquidity infusion measures. Despite these efforts, the banking system remains in a deep deficit, with banks having borrowed around Rs 2 lakh crore from the central bank as of Wednesday.
The RBI’s month-long liquidity infusion package has involved buying bonds worth Rs 1 lakh crore via auctions and another Rs 38,800 crore via secondary market transactions. Market participants are now waiting for the RBI’s next steps to address the liquidity deficit, which has been exacerbated by the central bank’s intervention in the foreign exchange market. The move is seen as a significant development, highlighting the challenges faced by the RBI in maintaining a stable banking system and the importance of effective communication with the market.
Regulatory body RBI imposes fines on Shriram Finance, Ujjivan Small Finance Bank, and Nainital Bank for lapses in compliance.
The Reserve Bank of India (RBI) has imposed penalties on three financial institutions, Shriram Finance, Ujjivan Small Finance Bank, and The Nainital Bank Limited, for non-compliance with regulatory norms. The penalties were imposed following the RBI’s Inspection for Supervisory Evaluation (ISE 2023), which assessed the financial health of these institutions as of March 31, 2023. The violators were found to have not adhered to interest rate directives, loan documentation irregularities, and risk categorization lapses.
Shriram Finance was fined ₹5.80 lakh for not setting up a system to review risk categorization of accounts periodically, while Ujjivan Small Finance Bank was penalized ₹6.70 lakh for not issuing loan agreements to some borrowers at the time of loan disbursement. The Nainital Bank Limited faced a penalty of ₹61.40 lakh for failing to follow RBI’s norms on ‘Interest Rate on Advances’ and ‘Customer Service in Banks’.
The RBI’s actions are aimed at maintaining financial discipline and ensuring transparency, consumer rights, and financial stability. The penalties reflect the central bank’s strict regulatory oversight over the banking sector and send a clear message that regulatory violations will not be tolerated. The move is seen as crucial in maintaining trust in the banking system and promoting a stable financial environment.
The implications of these penalties are broader, as they come at a time when financial institutions are under increasing scrutiny. The RBI’s enforcement actions demonstrate its commitment to maintaining financial discipline and ensuring that financial institutions operate in compliance with regulatory norms. The move is expected to promote a healthier financial system, better risk management, and increased transparency in financial transactions.
Karnataka Bank Seeks RBI Intervention to Reverse Suspicious Cross-Border UPI Transaction of ₹18.87 Crore
Karnataka Bank has recently reported to the Reserve Bank of India (RBI) a suspicious cross-border Unified Payments Interface (UPI) transaction worth Rs 18.87 crore. The bank claims that it has suffered a loss of Rs 18.57 crore due to an UPI reconciliation issue, which resulted in the irregular transaction.
According to reports, the transaction in question was observed on June 12, 2022, where an amount of Rs 18.87 crore was debited from the bank’s account and credited to an unknown entity. The bank’s internal investigation revealed that the transaction was suspected to be a cross-border payment, which is prohibited under the RBI’s guidelines.
The bank has requested the RBI to reverse this transaction, as it was made without its consent. The RBI has been informed that the bank is yet to receive the required information and confirmation from the Reserve Bank of India (RBI) to proceed with the reversal of the transaction.
This incident highlights the potential risks associated with the UPI platform, which has been growing in popularity in India. With the rapid growth of digital payments in the country, the RBI has been working to strengthen the security measures to prevent such incidents from occurring. However, it is essential for banks and financial institutions to be vigilant and take necessary steps to protect themselves from such threats.
The Karnataka Bank’s experience serves as a wake-up call for other banks and financial institutions to be cautious and proactive in monitoring their transactions to prevent similar incidents. The RBI needs to take this incident as an opportunity to revisit and strengthen its guidelines and regulations to ensure the security and integrity of the UPI platform.
In conclusion, the Karnataka Bank’s report to the RBI regarding the suspicious cross-border UPI transaction of Rs 18.87 crore is a matter of concern and a reminder of the importance of robust security measures in the digital payment landscape. The RBI needs to take concrete steps to mitigate such risks and ensure the safety and security of transactions on the UPI platform.
Karnataka Bank alerts RBI to a suspicious cross-border UPI transaction totalling Rs 18.87 crore.
Karnataka Bank has reported a suspicious cross-border UPI (Unified Payments Interface) transaction of Rs 18.87 crore to the Reserve Bank of India (RBI). According to reports, the bank has requested the RBI to reverse the transaction, which is suspected to be an illegal act.
The transaction in question is believed to have taken place on an international payment gateway, which is not a valid or authorized platform for UPI transactions. Karnataka Bank has alleged that the transaction was initiated from a foreign IP address, which is not a legitimate user of the platform.
The bank has claimed a loss of Rs 18.57 crore due to this reconciliation issue, which has resulted in the bank’s balance becoming negative. The bank has requested the RBI to investigate the matter and take necessary action to recover the loss.
This incident highlights the vulnerability of the UPI system, which is widely used for online transactions in India. The RBI’s oversight and regulations are being questioned, as such a large-scale irregularity could have gone unnoticed.
The bank has also requested the RBI to take necessary steps to prevent such incidents in the future, particularly in the case of cross-border transactions. This is a concern, as UPI transactions are becoming increasingly popular, and such incidents can have serious consequences, including financial and reputational damage to the bank.
The RBI has not yet commented on the matter, but the Karnataka Bank’s action is a wake-up call for the regulator and the banking industry as a whole. The incident highlights the need for greater vigilance and stricter regulations to ensure the security and integrity of the UPI system.
Senior Citizens Can Earn a Competitive Return: 9.1% FD Rate for 5-year Tenure
For senior citizens looking to invest in a Fixed Deposit (FD), this may be a good opportunity to do so, as some banks are still offering attractive interest rates. Although the Reserve Bank of India (RBI) recently cut its repo rate by 25 basis points, some banks are still offering interest rates as high as 9.1% on 5-year FDs. Here are some banks that are currently offering high interest rates to senior citizens:
* Suryoday Small Finance Bank: 9.1% interest rate on 5-year FDs
* Unity Small Finance Bank: 8.65% interest rate on 5-year term FDs
* Northeast Small Finance Bank: 8.5% interest rate on 5-year FDs
* Utkarsh Small Finance Bank: 8.35% interest rate on 5-year fixed deposits
* Jana Small Finance Bank: 8.2% interest rate on 5-year FDs
In addition to earning interest on their FDs, senior citizens can also take advantage of tax benefits. Under the old tax regime, investing in 5-year FDs can provide a tax exemption of up to Rs 1.5 lakh under Section 80C. However, under the new tax regime, this exemption is not available. Senior citizens can also avail an exemption on interest income of up to Rs 50,000 every financial year under Section 80TTB.
It is important to note that deposits in small finance banks are insured up to Rs 5 lakh by the Deposit Insurance Credit Guarantee Corporation (DICGC). However, experts advise investors to carefully consider the risks and decide on the limit of their investment accordingly, as the business model of these banks may differ from traditional banks.
Overall, for senior citizens, investing in FDs can be a good way to earn a steady return, while also taking advantage of tax benefits. However, it is essential to carefully review the terms and conditions of the FD and assess the risks involved before making a decision.
Finidi bags a whopping ₹500 crore deal with Union Bank of India, paving the way for the rollout of 900 ATMs across India.
Findi, a cash and payment services provider, has partnered with Union Bank of India to install 900 ATMs across India. The deal is valued at approximately ₹500 crore in revenue and ₹200 crore in EBITDA over a 7+1 year period. This partnership is a significant milestone for Findi, as it expands its reach to underserved urban and rural areas, aligning with its mission to enhance banking infrastructure and improve financial accessibility. Findi, through its majority-owned subsidiary, Transaction Solutions International (TSI), currently operates over 9,000 Brown Label ATMs across India, serving 13 major banks, including SBI, HDFC Bank, and Central Bank of India.
This partnership follows recent developments, including Findi’s acquisition of BankIT, a digital payments provider with over 129,000+ merchant touchpoints, and approval from the Reserve Bank of India (RBI) for the full acquisition of Tata Communications Payment Solutions Ltd. This solidifies Findi’s leadership in India’s financial services sector.
Findi’s Managing Director and CEO, Deepak Verma, emphasized the importance of expanding access to financial services, stating that the company is “strengthening financial inclusion and supporting India’s vision of a more digitally connected economy.” With this partnership, Findi is poised to play a significant role in bridging the financial divide, connecting millions of individuals and businesses to essential banking services.
Earn attractive returns with our fixed deposit products: 9% interest rate for all depositors, with a special offer of 9.5% for senior citizens.
The Reserve Bank of India (RBI) has cut its repo rate by 25 basis points, which is likely to lead to a decrease in bank interest rates in the future. This is a concern for investors in fixed deposits (FDs), particularly senior citizens, as they may not be able to benefit from higher interest rates in the long run. Small finance banks, which focus on serving underserved sectors, often offer attractive FD rates to attract deposits. These banks may offer better rates for senior citizens, exceeding 9% in some cases.
According to recent updates, the following small finance banks are offering the following FD rates:
* Unity Small Finance Bank: 4.50% to 9.50% for general public and 4.50% to 9.50% for senior citizens, with rates ranging from 7 days to 10 years
* Suryoday Small Finance Bank: 4.00% to 9.10% for general depositors and 4.50% to 9.10% for senior citizens, with rates ranging from 7 days to 10 years
* Utkarsh Small Finance Bank: 4.00% to 8.50% for general depositors and 4.60% to 9.10% for senior citizens, with rates ranging from 7 days to 10 years
Investors should compare the rates and terms offered by these small finance banks and consider the bank’s credibility and financial stability before investing. It’s essential to lock in higher interest rates before they decrease, as the RBI’s rate cut may lead to a decrease in bank interest rates in the future. Senior citizens, in particular, can benefit from the higher rates offered by these small finance banks.
Standard Chartered secures RBI approval to appoint PD Singh as CEO for India operations
The Reserve Bank of India (RBI) has approved the appointment of Prabdev (PD) Singh, a corporate banking veteran and former CEO of JP Morgan India, as the new CEO of Standard Chartered (StanC) in India and South Asia. Singh will take over from current CEO Zarin Daruwala, who has completed her third three-year term and will retire at the end of March. This development comes after a series of interviews held in October, during which Singh was identified as the top choice among three candidates to succeed Daruwala.
Singh has more than 30 years of experience in corporate banking and has worked with prominent institutions such as JP Morgan and HSBC. He has played a key role in several significant deals, including foreign currency funding, credit facilities, and structured deals for Indian corporates and domestic banks.
StanC is undergoing a transformation, shifting its focus towards wealth management in India, capitalizing on the country’s growing affluence and higher income potential. To this end, the bank sold its personal loan portfolio to Kotak Mahindra Bank last October.
With Singh at the helm, the bank is poised to leverage his expertise to drive its growth strategy. His appointment is expected to be announced formally this week. The soft-spoken banker takes over from Daruwala, who has led StanC since 2016 and previously spent 26 years at ICICI Bank. StanC reported a net profit of $204 million in the first half of 2024, and its full-year 2024 results are set to be announced this Friday.
Three banks slapped with hefty fines by RBI, accused of [briefly describe the reason for the fine].
The Reserve Bank of India (RBI) has imposed fines on three banks, including Nainital Bank, Ujjivan Small Finance Bank, and Shriram Finance, for non-compliance with regulatory guidelines. Nainital Bank was fined ₹61.40 lakh for not linking some floating rate loans given to micro, small, and medium enterprises (MSMEs) to external benchmark rates. The bank also failed to charge a proportionate penalty for non-maintenance of minimum balance in savings accounts. Additionally, the bank’s customer service standards were not up to the mark.
Ujjivan Small Finance Bank was fined ₹6.70 lakh for not providing loan agreements to some borrowers at the time of loan approval or disbursement. Shriram Finance was fined ₹5.80 lakh for not making regular reviews of risk categorization of its accounts, as well as for other irregularities.
The RBI stated that the imposition of these fines is based on deficiencies in compliance with regulatory rules and is not intended to comment on the validity of any transactions or agreements made by the banks with their customers. The regulator also clarified that the decision of monetary penalty is separate from any other actions that may be initiated against the banks.
The fines are aimed at ensuring that banks comply with regulatory guidelines and provide better services to their customers. The RBI’s action is a move to maintain financial stability and ensure that banks operate in a transparent and fair manner. The fines serve as a reminder to banks to be more vigilant in adhering to regulatory norms and to prioritize customer satisfaction and interest rates on advances. Overall, the RBI’s action demonstrates its commitment to maintaining high standards of governance and accountability in the banking sector.
In response to the recent RBI rate cut, the bank has cuts its fixed deposit (FD) interest rates by up to 65 basis points.
DCB Bank, a private sector lender, has reduced its interest rates on fixed deposits (FDs) below Rs 3 crore for select tenures. The revised rates will come into effect on February 14, 2025. This move follows the Reserve Bank of India’s (RBI) recent reduction of the repo rate from 6.50% to 6.25%, the first such reduction since 2020. The decreased repo rate will lead to lower FD interest rates, and vice versa.
The revised FD interest rates range between 3.75% and 8.05% for general citizens and 4.25% and 8.55% for senior citizens, depending on the tenure. The highest interest rate, 8.05%, is offered for a tenure of 19 months to 20 months for both general citizens and senior citizens.
DCB Bank has reduced its FD interest rates by up to 65 basis points (bps) for select tenures. For general citizens, the bank has reduced the FD interest rate by 55 bps for tenures above 26 months but less than 37 months, and by 65 bps for tenures exceeding 38 months but less than 61 months. For senior citizens, the bank has cut the FD interest rate by 55 bps for tenures above 26 months but less than 37 months, and by 65 bps for tenures exceeding 38 months but less than 61 months.
The revised FD interest rates are as follows:
* For general citizens: 3.75% to 8.05% for tenures ranging from 7 days to 10 years.
* For senior citizens: 4.25% to 8.55% for tenures ranging from 7 days to 10 years.
Overall, the revised FD interest rates will affect individuals who are planning to invest in FDs below Rs 3 crore with DCB Bank. The reduced interest rates may lead to a decrease in the returns on investment, but they may also be more attractive to investors who are looking for a low-risk investment option with a fixed return.
The Reserve Bank of India (RBI) levies a penalty of Rs.68 lakh on Nainital Bank and Ujjivan Bank.
The Reserve Bank of India (RBI) has imposed penalties on several financial institutions for failing to comply with regulatory norms. Nainital Bank Ltd and Ujjivan Small Finance Bank were penalized for specific non-compliances. Nainital Bank was fined ₹61.40 lakh for not adhering to guidelines related to “Interest Rate on Advances” and “Customer Service in Banks”, while Ujjivan Small Finance Bank was fined ₹6.70 lakh for not following directives on “Loans and Advances – Statutory and Other Restrictions”.
Additionally, Shriram Finance, a non-banking financial entity, was fined ₹5.80 lakh for violating Know Your Customer (KYC) guidelines and failing to comply with requirements related to “Data Format for Furnishing of Credit Information to Credit Information Companies”. The RBI emphasized that these penalties are solely due to regulatory compliance deficiencies and do not affect the validity of transactions or agreements made by these institutions with their customers.
The RBI also indicated that further action could be taken if deemed necessary. These penalties serve as a reminder to financial institutions to adhere to regulatory guidelines and maintain high standards of compliance to ensure the stability and trust of the financial system in India. The RBI’s actions demonstrate its commitment to ensuring the integrity and accountability of the financial sector.
In a separate context, Indian Masterminds Stories seems to be a collection of real-life stories, which could be stories of entrepreneurs, business leaders, or innovators who have made significant contributions to the Indian economy. However, the connection between the RBI’s penalties and Indian Masterminds Stories is unclear, as they appear to be unrelated. Overall, the RBI’s actions aim to maintain a healthy and robust financial system, which is essential for the overall economic growth and development of the country.
RBI imposes Rs 68 lakh penalty on two errant banks, cracking the whip on regulatory non-compliance.
The Reserve Bank of India (RBI) has imposed penalties on three banks and a non-banking entity for non-compliance with regulatory norms. Nainital Bank, Ujjivan Small Finance Bank, and Shriram Finance have been slapped with fines totaling Rs. 68.1 lakh.
Nainital Bank was penalized Rs. 61.40 lakh for violating directions on interest rates and customer service. Ujjivan Small Finance Bank was fined Rs. 6.70 lakh for failing to comply with restrictions on loans and advances. Shriram Finance was penalized Rs. 5.80 lakh for non-compliance with Know Your Customer (KYC) and data format guidelines for furnishing credit information to credit information companies.
The penalties are intended to address deficiencies in regulatory compliance and do not imply that any transactions or agreements between the lenders and their customers are invalid. The RBI has also clarified that the imposition of these penalties is not a bar to initiating further action against the companies if necessary. The monetary penalties are a way for the RBI to ensure that financial institutions adhere to the required norms and maintain the integrity of the financial system.
The Reserve Bank of India has levied a total penalty of Rs 68 lakh against Nainital Bank and Ujjivan Small Finance Bank.
The Reserve Bank of India (RBI) has imposed a penalty of Rs 5.80 lakh on Shriram Finance, a non-banking financial company (NBFC), for non-compliance with certain regulatory guidelines and directions. The violations include failure to follow Know Your Customer (KYC) guidelines and directions on furnishing credit information to credit information companies in the specified data format.
The RBI’s penalty is a result of the company’s non-compliance with these norms, which are in place to maintain financial stability and ensure orderly functioning of the financial system. The KYC guidelines are critical in preventing money laundering, terrorist financing, and other financial crimes, as well as to ensure that financial institutions have accurate and useful information about their customers.
The data format guidelines for furnishing credit information to credit information companies, on the other hand, are intended to ensure that credit information is disseminated in a standardized and comparable manner, allowing credit information companies to accurately assess creditworthiness of individuals and businesses.
Shriram Finance’s non-compliance with these guidelines and directions has not only put the company in violation of regulatory requirements but also undermined the integrity of the financial system. The RBI’s penalty serves as a warning to other financial institutions to take immediate corrective measures to ensure compliance with regulatory guidelines and maintain the trust and confidence of customers.
The penalty imposed on Shriram Finance is also a demonstration of the RBI’s resolve to maintain a level playing field and ensure that all financial institutions, including NBFCs, are held to the same standards of compliance and accountability. The penalty is a reminder that non-compliance with regulatory requirements can result in significant financial and reputational costs, and that it is essential for financial institutions to prioritize compliance and adhere to regulatory guidelines to maintain the stability and integrity of the financial system.
Chaos erupts as panicked customers swarm the branches of New India Co-operative Bank
The Reserve Bank of India (RBI) has imposed restrictions on the Mumbai-based New India Co-operative Bank, banning it from issuing new loans and allowing withdrawals of deposits for a period of six months. The decision was made due to supervisory concerns and the bank’s liquidity position. As a result, customers are eagerly waiting in queues outside the bank, seeking clarity on their savings and unsure of how they will manage to make ends meet.
One customer, Seema Waghmare, expressed her frustration, saying, “We deposited money just yesterday, but no one warned us about this. Now, they say we’ll get our money in three months, but we have EMIs and bills to pay. How are we supposed to manage?” Another customer, Varsha, is worried about her jewelry and savings, fearing she may have to mortgage her jewelry or rely on friends and family.
The RBI has allowed eligible depositors to receive deposit insurance claim amounts up to Rs 5,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC) if they submit a willingness to claim and undergo verification. The restrictions are aimed at protecting the interests of depositors and ensuring the bank’s stability. Veteran banker Keki Mistry believes that depositors in Indian banks rarely suffer losses, citing the RBI’s strong supervisory framework and regulations in place to protect depositors. However, the situation is causing uncertainty and frustration among customers, with many expressing concerns about their financial well-being.
Indian Overseas Bank slashes Repo Linked Lending Rate by 25 basis points
India’s Chennai-based Indian Overseas Bank (IOB) has made a decision to reduce its Repo Linked Lending Rate (RLLR) by 25 basis points (bps). The reduction brings the RLLR down from 9.35% to 9.10%. This move is a follow-up to the Reserve Bank of India’s (RBI) recent Monetary Policy Committee (MPC) meeting, where the Repo rate was also reduced by 25 bps from February 5th to 7th, 2025.
The revised RLLR will be effective from February 11th, 2025. This development is likely to have a positive impact on borrowers, particularly in the housing and personal loan segments, as they will benefit from lower interest rates and reduced EMIs. For savers, this may not be as significant, as the yields on fixed deposits and other deposit schemes may not change proportionally.
The RBI’s decision to cut the Repo rate and IOB’s subsequent reduction in RLLR are part of the country’s efforts to stimulate economic growth. The reduction in interest rates is expected to boost consumption and investment, stimulate economic activity, and create jobs.
However, it is essential to note that the reduction in interest rates is not uniform across the board. Borrowers with longer loan tenures or those with lower credit profiles may not benefit from the reduction in RLLR. Additionally, the reduction in interest rates may lead to a decline in the value of savings and fixed deposits. Banking experts believe that borrowers should carefully review their loan options and consider refinancing to take advantage of the lower interest rates.