1.

Published on: 2024-10-09

Keywords: ['RBI MPC', 'monetary policy', 'repo rate', 'financial transparency',
'consumer protection', 'Urban Cooperative Banks', 'pre-payment penalties', 'micro
and small enterprises', 'Reserve Bank of India', 'RBI MPC news']
Headline : RBI MPC announces more than a stance shift: Here are the new plans
Content : In a significant move, the Reserve Bank of India (RBI) has gone beyond
changing its monetary policy stance and unveiled a series of measures aimed at
enhancing financial transparency and consumer protection. The Monetary Policy
Committee led by Governor Shaktikanta Das on Wednesday decided to keep the repo
rate unchanged at 6.5 per cent while changing the stance to neutral from withdrawal
of accommodation.Meanwhile, as part of latest meeting, the RBI MPC has made several
key decisions. One of the key directives is to focus on responsible lending
conduct, where banks and Non-Banking Financial Companies (NBFCs) will no longer be
permitted to impose pre-payment penalties on any floating rate term loans
sanctioned to individual borrowers for non-business purposes. The RBI further
proposed to broaden the scope of these guidelines to include loans to micro and
small enterprises (MSEs), a draft circle in this regard shall be issued for public
consultation.To further strengthen the UCB sector, the RBI announced the issuance
of a discussion paper on capital raising avenues for UCBs, which will be open for
feedback and suggestions from stakeholders. This initiative aims to provide more
flexibility and enhance the capital-raising capabilities of Urban Cooperative Banks
through revised guidelines for the issuance and regulation of capital and
securities, Das said.The RBI has has also proposed the creation of the Reserve Bank
Climate Risk Information System (RBris), to help depository will help regulated
entities conduct robust climate risk assessments by providing high-quality,
reliable climate-related data. As per Das, By bridging the current data gaps, RBris
will enable financial institutions to better manage climate risks and align their
operations with sustainable practices.The UPI123Pay transaction limit has been
increased from Rs 5,000 to Rs 10,000. Meanwhile, the UPI Light wallet limit has
been raised from Rs 2,000 to Rs 5,000, and the per-transaction limit has been
increased from Rs 500 to Rs 1,000.The RBI has proposed extending the beneficiary
name lookup facility—currently available in UPI and Immediate Payment Service
(IMPS)—to RTGS and NEFT systems. This will allow the sender to verify the
recipient’s account name before completing a funds transfer, reducing the
likelihood of wrong credits and fraud in financial transactions.

2. Published on: 2024-10-09

Keywords: ['repo rate', 'rbi repo rate', 'rbi mpc policy decision october 2024',
'rbi interest rates', 'rbi policy impact', 'rbi repo rate news', 'rbi monetary
policy update', 'repo rate change', 'repo rate news', 'rbi', 'state bank of india']
Headline : RBI MPC shifts gear to 'neutral' while retaining repo rate at 6.5%; GDP
targets revised, inflation retaine
Content : The Reserve Bank of India-led Monetary Policy Committee (MPC) on
Wednesday retained repo rate, the key lending rate, at 6.5%, announced governor
Shaktikanta Das.The MPC also decided unanimously to change the 'withdrawal of
accommodation' stance to 'neutral' with focus on growth.The Governor, however,
stressed on keeping the inflation within its target of 4%. Catch all RBI MPC live
updates hereWhile announcing the key decisions, Das said, The monetary policy
action today reflects MPCs assessment that at the current juncture it would be
appropriate to have greater flexibility and optionality to act in sync with the
evolving conditions and the outlook. RBI's GDP, Inflation target The MPC retained
its real Gross Domestic Product (GDP) forecast at 7.2 per cent for FY25. With this,
the RBI has now pegged growth rate for Q2 at 7% (reduced from 7.2%), Q3 at 7.4% (up
from 7.3%%) and Q4 at 7.4%. For Q1 FY26, the growth rate was kept at 7.3%.
Meanwhile, the central bank left its inflation forecast for this fiscal year
unchanged at 4.5%, even amid caution on food prices and intensifying geopolitical
tensions that may disrupt energy supplies and take crude prices further
higher.India’s economic landscape has been characterised by strong growth in recent
quarters. According to the State Bank of India (SBI), domestic conditions remain
paramount in shaping the RBI’s monetary policy decisions. With India’s growth
potentially higher than its long-term potential output, the report argues that
maintaining the current interest rate levels is justified. “Domestic conditions are
paramount, and with robust growth, higher than potential output, the case for a
pause exists,” the report said.The growth rate for the first quarter of FY2025 was
6.7%, slightly below the RBI’s projection of 7%. While still indicative of strong
growth, this dip has raised concerns. Moreover, key indicators such as vehicle
sales, cement volumes and GST collections have seen a drop, signalling a cooling of
economic activity.Read More: RBI Meeting at a GlanceOne of the key reasons the RBI
was expected to refrain from cutting rates was inflation. Though inflation has
softened from its peak, the RBI remains cautious about its durability. The central
bank is also wary of global risks, such as rising geopolitical tensions in West
Asia, which could drive up oil prices and exert pressure on domestic inflation.As
per an ET (Economic Times) poll of economists, 80% of respondents were anticipating
the RBI to keep the repo rate unchanged, marking the tenth consecutive meeting with
no rate cuts.The October meeting was the first one for the newly appointed external
members of the MPC — Ram Singh, Saugata Bhattacharya, and Nagesh Kumar.While the
domestic economy remains the central focus, global developments cannot be ignored.
Notably, the US Federal Reserve recently started cutting rates, a move that was
expected to influence the RBI’s approach. Historically, the RBI’s monetary policy
has been shaped by global trends, especially those originating in major economies
like the US and the Eurozone. These trends, coupled with a tight fiscal policy,
suggest that domestic demand is weakening, casting doubt on whether India can
maintain its growth momentum.

3. Published on: 2024-10-09

Keywords: ['rbi mpc highlights october 2024', 'shaktikanta das speech', 'rbi repo
rate decision', 'inflation outlook india', 'rbi monetary policy', 'economic growth
india', 'rbi governor speech 09 october 2024', 'mpc meeting key takeaways', 'rbi
interest rates', 'shaktikanta das policy pointers']
Headline : RBI MPC Meet Highlights: Das & Co keep repo rate unchanged, stance
changed to 'neutral'
Content : Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday
announced the outcomes of the bi-monthly Monetary Policy Committee (MPC) meeting.
As anticipated the repo rate, the key lending rate, will remain unchanged at 6.5%,
with the central bank continuing its focus on a neutral stance.RBI Monetary
Policy Meeting Live Updates The MPC’s scheduled meeting took place from October 7
to 9, amidst significant developments in global central banking. The US Federal
Reserve recently implemented a sharp 50 basis point rate cut, and several other
advanced economies are expected to follow a similar path.Earlier this month, the
Indian government reconstituted the MPC by appointing three new members: economists
Ram Singh, Saugata Bhattacharya, and Nagesh Kumar. These members will serve on the
six-member rate-setting panel for the next four years, playing a crucial role in
shaping India's monetary policy.RBI MPC meeting highlightsThe MPC decided by a
majority of five out of six members to keep the policy reported unchanged at
6.5%.Consequently, the standing deposit facility that is the SDF rate remains at
6.25% and the marginal standing facility that is the MSF rate and the bank rate
they stand at 6.75%.The Das-led MPC unanimously decided to change the stance to
neutral and to remain unambiguously focused on a durable alignment of inflation
with the while grows. Real GDP grew by 6.7% in Q1, RBI MPC noted.GDP projection for
FY25 remains unchanged at 7.2%The GDP growth forecast shows steady figures across
quarters, with 7% in Q2, followed by 7.4% in both Q3 and Q4, and a slight dip to
7.3% in Q1 of FY26.Inflation for FY25 is projected at 4.5%, with quarterly figures
at 4.1% in Q2, rising to 4.8% in Q3, and easing slightly to 4.3% in Q1 FY26.The
recent uptick in food, metal prices in FAO, if sustained, can add to upside
risks.Indian rupee continues to be the least volatile among other currencies.FPI
flows have seen a turnaround from net outflows to net inflows to $19.2 billion
during June-OctoberBanks and NBFCs not permitted to levy pre-payment penalties on
any floating rate term loan sanctioned to individual borrowers for non-biz
purposes.India’s current account deficit (CAD) widened to 1.1% of GDP inQ1FY25. Das
said, Buoyancy in services exports andstrong remittance receipts are expected to
keep CAD within the sustainable level. The RBI MPC noted that foreign
directinvestment (FDI) flows remain strong in 2024-25 as both gross and net FDI
inflows improved in April-July 2024India’s foreignexchange reserves have already
crossed a new milestone of US$ 700 billion.What happened in August meeting?In the
August MPC meeting, the repo rate was maintained with a 4:2 majority, ensuring that
inflation gradually aligns with targets while supporting growth. The standing
deposit facility (SDF) rate was held at 6.25%, while the marginal standing facility
(MSF) and bank rates remained at 6.75%. Inflation forecasts for FY25 and FY26 were
set at 4.5% and 4.4%, respectively, with quarterly projections for FY25 at 4.4%,
4.7%, and 4.3% for the second, third, and fourth quarters.Food inflation was
highlighted as a critical concern, with the central bank stressing the need to
monitor it closely to prevent spillover effects. The GDP forecast for FY25 remains
strong at 7.2%, with quarterly projections hovering between 7.2% and 7.3%. On the
digital front, the RBI is working to expand UPI usage through the introduction of
Delegated Payments, allowing primary users to set transaction limits for secondary
users.Additionally, the central bank has proposed reducing the cheque clearance
time to a few hours, improving the efficiency of the financial system. Forex
reserves reached a new high of $675 billion as of August 2, 2024, while the current
account deficit fell to 0.7% of GDP in FY24, down from 2% in FY23, due to a lower
trade deficit and strong remittances. Non-resident deposits increased during April-
May, while external commercial borrowings moderated during the same period.Between
May 2022 and February 2023, the MPC raised the benchmark interest rate by 250 basis
points to control inflation, after which it maintained a pause, which continues to
date, with the aim of stabilizing price levels.

4. Published on: 2024-10-09

Keywords: ['rbi mpc key takeaways', 'rbi repo rate decision 2024', 'rbi inflation
outlook', 'economic growth india', 'rbi monetary policy', 'rbi mpc meeting october
2024', 'rbi interest rates', 'inflation control rbi', 'growth outlook india', 'repo
rate india']
Headline : RBI Monetary Policy Meet Key Takeaways: All about Das & Co's decisions
Content : Reserve Bank of India's (RBI) Governor Shaktikanta Das announced the
outcomes of its bi-monthly Monetary Policy Committee (MPC) meeting on Wednesday.The
repo rate, key lending rate, was unchanged at 6.5 per cent with focus on neutral
stance.RBI Monetary Policy Meeting Live UpdatesThe MPC meet comes at a time when
the US Federal Reserve has resorted to an aggressive 50 basis point cut in its
policy rates and central banks of some other advanced economies are expected to
follow suit. Further, earlier this month, the government reconstituted the MPC by
appointing economists Ram Singh, Saugata Bhattacharya and Nagesh Kumar to the
crucial six-member rate-setting panel for four years.Key takeaways from MPC
meetingRepo Rate: Maintained with a 5:1 majority at 6.5% to ensure inflation aligns
with targets while supporting growth.SDF & MSF Rates: SDF rate at 6.25%, MSF and
bank rates at 6.75%.GDP: The GDP growth forecast shows steady figures across
quarters, with 7% in Q2, followed by 7.4% in both Q3 and Q4, and a slight dip to
7.3% in Q1 of FY26. Meanwhile, for FY25, the projection remains unchanged at
7.2%.Inflation: Inflation for FY25 is projected at 4.5%, with quarterly figures at
4.1% in Q2, rising to 4.8% in Q3, and easing slightly to 4.3% in Q1 FY26.State of
INR: Indian rupee continues to be the least volatile among other currencies. Das'
message to NBFCs: Banks and NBFCs on their part ned to carefully assess their
exposures.FPIs: FPI flows seen a turnaround from net outflows to net inflows to
$19.2 bn during June-OctCAD: India’s current account deficit widened to 1.1% of GDP
inQ1FY25.Responsible lending conduct: Banks and NBFCs not permitted to levy pre-
payment penalties on any floating rate term loan sanctioned to individual borrowers
for non-business purposes.Discussion paper on capital raising avenues for Urban
Cooperative Banks (UCBs) to be issued for stakeholder feedback.RBI to launch the
Reserve Bank Climate Risk Information System (RBris) for better climate risk
assessment by financial institutions.UPI One Three Pay transaction limit increased
from Rs 5,000 to Rs 10,000; UPI Light wallet limit raised from Rs 2,000 to Rs
5,000, with per-transaction limit increased to Rs 1,000.Beneficiary account name
lookup facility to be introduced for RTGS and NEFT systems, reducing wrong credits
and fraud.

5. Published on: 2024-10-08

Keywords: ['nirmala sitharaman', 'sebi chief', 'madhabi buch', 'finance minister',
'indian market regulator', 'union finance minister']
Headline : Indian regulators have done world-class job; made system more
transparent: Finance Minister Nirmala Sithar
Content : Finance Minister Nirmala Sitharaman on Tuesday commended Indian financial
sector regulators for doing a world-class job and bringing greater transparency
into the system. Underlining that she is not against questioning or critiquing
regulators, Sitharaman said there is a need to be extremely conscious about
contributions made by them as well. Speaking at the Financial Express Best Banks
Awards here, the finance minister asked everybody to look at the emerging facts
that are coming out in the SEBI matter, where the regulator's chairperson Madhabi
Puri Buch has been accused of impropriety.

6. Published on: 2024-10-08

Keywords: ['RBI MPC', 'RBI', 'Monetary Policy Committee', 'home loan EMIs',
'interest rate decision', 'repo rate', 'Monetary Policy', 'housing market', 'Anuj
Puri', 'Deloitte India']
Headline : Home loan EMIs pinching hard? Let’s see what RBI is about say
Content : The Reserve Bank of India-led Monetary Policy Committee (MPC), headed by
Governor Shaktikanta Das, is set to announce its interest rate decision on October
9 at 10 am.While most analysts predict no change in rates, a surprise rate cut
could bring cheer for home buyers, potentially reducing EMIs on housing loans.RBI’s
decision will impact various sectors, especially housing, where home loans dominate
purchases, ANAROCK Group Chairman, Anuj Puri, told ET Online. “A cut in the repo
rate would result in lower interest rates on home loans, making EMIs more
manageable for borrowers,” Puri said.Puri noted that any reduction in interest
rates could boost market sentiment and attract investors back into real estate, a
sector that saw renewed interest post-pandemic due to rising demand and prices.
However, with home prices peaking, many investors are currently cautious. More
favorable lending rates could revive this market.Data from ANAROCK Research
highlights a 46% rise in residential property prices across the top seven cities
since 2021. A potential rate cut would improve affordability and could lead to
increased sales during the upcoming festive season. Puri added that this would
benefit developers by improving cash flow and reducing borrowing costs.Subha Sri
Narayanan, Director at CRISIL Ratings, echoed similar views, stating that most
housing finance companies offer floating interest rates. Any reduction in the repo
rate, which currently stands at 6.5% would eventually lower the benchmark lending
rates for these institutions, though the effects may take time to manifest.Interest
rates on home loans have surged since the RBI hiked the repo rate by 2.5% between
May 2022 and February 2023. Borrowers are now eagerly awaiting a reversal in the
rate cycle to ease their EMIs. Despite expectations for no rate change, the
addition of new members to the MPC with those of different views have increased the
possibility of unexpected moves in the upcoming meeting.Economic indicators suggest
a cooling of India’s growth momentum. The 6.7% growth rate for the first quarter of
FY2025 was slightly below the RBI’s 7% projection. A slowdown in vehicle sales,
cement demand, and GST collections points to weakening domestic demand. Despite
these concerns, the central bank remains cautious due to inflation risks.Although
inflation has eased from its peak, the RBI is still wary of its durability,
especially with external factors like rising geopolitical tensions and potential
oil price hikes. An ET poll showed that 80% of economists expect the repo rate to
remain at 6.5%, marking the tenth consecutive meeting with no rate cut.Global
factors also play a role in the RBI’s decision-making process. While the U.S.
Federal Reserve has started cutting rates, RBI is likely to focus on domestic
conditions. However, a report from Nuvama suggests that the Fed's policy could
still influence RBI's actions in the coming months.Rumki Majumdar, an economist at
Deloitte India, noted that the RBI is unlikely to cut rates until inflation is
consistently under control. “RBI would prefer to wait and watch the inflationary
pressures that emanate from a myriad of risks and how the markets react to the US
policy rate cuts,” Majumdar said.As the October meeting approaches, the RBI is
expected to keep its repo rate unchanged maintaining a cautious stance. However, a
shift to a neutral monetary stance could signal potential rate cuts later in the
year, depending on the evolving global and domestic economic landscape.

7. Published on: 2024-10-08

Keywords: ['financial inclusion', 'insurance coverage', 'social security schemes',
'Jan Dhan Yojana', 'Atal Pension Yojana', 'Pradhan Mantri Jeevan Jyoti Bima
Yojana', 'Pradhan Mantri Suraksha Bima Yojana']
Headline : Government revamps financial inclusion program for enhanced social
security coverage
Content : The government plans to revamp its financial inclusion programme,
targeting more comprehensive coverage of eligible persons under its social security
schemes. The upgraded Jan Suraksha model may offer higher insurance and pension
coverage, with a focus on linking all the Jan Dhan account holders, two officials
aware of the discussions told ET.“We are reviewing a proposal to double the limit
in the life and accident cover under the two flagship schemes,” a government
official said. Other suggestions, including hiking the minimum guaranteed pension
under the Atal Pension Yojana (APY), are also being looked at, he said.
114023000At present, under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and
Pradhan Mantri Suraksha Bima Yojana (PMSBY), the insurance cover is ₹2 lakh each.
The minimum pension guaranteed under APY ranges from ₹1,000 to ₹5,000, depending on
one’s contribution.“The focus is also on prompt claim payment in case of the
insurance schemes and that banks will proactively inform nominees of insured
deceased account holders by detecting the same from its core banking solution (CBS)
and autogenerating communication,” the official said.At present, banks and insurers
have been advised to settle claims within 14 days of receipt of the claim, with a
week each for the bank and the insurer to process it. “The financial institutions
will also publicise expeditiously settled claims to give more confidence to
subscribers and increase the numbers,” he said. Another official said that through
various state-level bankers’ committees, or SLBCs, it has been conveyed to banks
that all Jan Dhan accounts that have a quarterly average balance of ₹1,000 or more
may be taken as an indication that they will be able to pay those premiums and
should be actively pursued.The Prime Minister’s Jan Dhan Yojana (PMJDY) is a zero-
balance savings account scheme to ensure access to banking services to all
citizens. Banks will also actively push NPS Vatsalya, launched earlier this year.
The scheme allows parents to open a pension account for minors with a ₹1,000 annual
contribution. Premium revision An executive with a state-run general insurer said
if the government is looking to increase the insurance coverage under PMSBY and
PMJJBY, then there may be a case for increasing their premium as well. “This also
needs to be factored in as the last premium revision was only done after the claim
ratio had drastically increased,” he said.At present, life insurance scheme
PMJJBY's annual premium is Rs 436, and accidental death and disability insurance
scheme PMSBY has an annual premium of just Rs 20. The government had revised these
rates in 2022 in view of the adverse claims experience of the schemes, PMJJBY and
PMSBY, and in order to make them viable for the implementing insurers.

8. Published on: 2024-10-07

Keywords: ['Income Tax Act', 'tax department', 'CBDT', 'Nirmala Sitharaman', 'tax
certainty', 'litigation reduction', 'Budget session', 'Income Tax department',
'central board of direct taxes', 'Direct Tax']
Headline : Tax dept invites public suggestions for I-T Act review
Content : The Income Tax department on Monday invited public inputs for review of
the six-decade old I-T Act with regard to simplification of language, litigation
reduction, compliance reduction, and obsolete provisions. Pursuant to the Budget
announcement by Finance Minister Nirmala Sitharaman for a comprehensive review of
the Income-tax Act, 1961, the Central Board of Direct Taxes (CBDT) had set up an
internal committee to oversee the review and make the Act concise, clear, and easy
to understand, which will reduce disputes, litigation, and provide greater tax
certainty to taxpayers. The committee invites public inputs and suggestions in
four categories: simplification of language, litigation reduction, compliance
reduction, and redundant/obsolete provisions, the CBDT said. A webpage on the e-
filing portal -- https://eportal.incometax.gov.in/iec/foservices/#/pre-login/ita-
comprehensive-review -- has been launched and the public can access the page by
entering their mobile number and validating it via OTP. Suggestions should specify
the relevant provision of the Income-tax Act, 1961 or Income-tax Rules, 1962
(mentioning the specific section, sub-section, clause, rule, sub-rule, or form
number), as the case may be, to which the suggestion relates under the
aforementioned four categories. The Finance Minister in the 2024-25 Budget
presented in July had proposed that the I-T law review will be completed in six
months. Considering that the six-month timeline ends in January 2025, it is widely
expected that the amended I-T Act could be brought in the Budget session of
Parliament.

9. Published on: 2024-10-07

Keywords: ['India central bank', 'DBS Bank', 'monetary policy', 'economic growth',
'interest rates', 'rate cut', 'hawkish stance', 'RBI', 'Reserve Bank of India',
'india']
Headline : RBI to be less hawkish at October policy, DBS Bank economist says
Content : India's central bank is likely to be less hawkish than its previous
monetary policy following softer domestic data, although a change in stance or
rates is unlikely at its policy meeting this week, an economist with DBS Bank said
on Monday. I do not think they will change their stance as yet, as a change in
monetary policy stance does not need to precede a rate cut, said Radhika Rao,
senior economist and executive director at DBS Bank in Singapore. Both could
happen concurrently when they finally bite the bullet, she told the Reuters
Trading India forum. The Reserve Bank of India is likely to keep rates steady on
Wednesday, with some investors betting on a change in stance to neutral from
withdrawal of accommodation as economic growth slows. India's economic growth
slowed to 6.7% in the April-June quarter from a year earlier as a decline in
government spending during national elections weighed, but it remained the world's
fastest-growing major economy. Several economists expect at least one dissenter,
among India's newly-appointed monetary policy committee members, to call for a rate
cut. Official leaning of the new members is likely to be gleaned from the
commentary during the rate decision as well as subsequent minutes of the policy
meeting, Rao said. Last week, India's government appointed Ram Singh, Saugata
Bhattacharya and Nagesh Kumar as new external members of the RBI's rate-setting
panel. Meanwhile, the recent escalation in tensions in the Middle East is being
watched, Rao said, but they are unlikely to impact foreign investments into Indian
government bonds. I would still expect country-specific drivers to continue
triggering portfolio adjustments. She also expects the RBI to revise down its
growth forecast by 20 basis points to 7% at either the October or December policy
meeting, to account for a slowdown in the Indian government's capital expenditure.

10. Published on: 2024-10-07

Keywords: ['repo rate', 'RBI MPC', 'interest rates', 'monetary policy', 'India
economic growth', 'inflation concerns', 'RBI', 'SBI report', 'rate cuts', 'Reserve
Bank of India', 'state bank of india']
Headline : RBI MPC October meet: Status quo likely with future easing on the
horizon
Content : Amid India's robust economic performance, all eyes are on the Reserve
Bank of India (RBI) ahead of its upcoming monetary policy meeting scheduled for
October 7-9, 2024. According to several reports, the central bank is expected to
maintain the status quo on interest rates, but the growing divide within its
Monetary Policy Committee (MPC) suggests that the meeting may not be devoid of
drama.With new members entering the MPC and the US Federal Reserve easing rates,
the RBI faces a delicate balancing act between sustaining domestic growth and
curbing inflationary pressures.Also Read: RBI MPC announcement on October 9:
Attractive FD interest rates to not last long; book fixed deposit now before rate
dropsEconomic growth and inflation: The domestic pictureIndia’s economic landscape
has been characterised by strong growth in recent quarters. According to the State
Bank of India (SBI), domestic conditions remain paramount in shaping the RBI’s
monetary policy decisions. With India’s growth potentially higher than its long-
term potential output, the report argues that maintaining the current interest rate
levels is justified. “Domestic conditions are paramount, and with robust growth,
higher than potential output, the case for a pause exists,” the report said.The
growth rate for the first quarter of FY2025 was 6.7%, slightly below the RBI’s
projection of 7%. While still indicative of strong growth, this dip has raised
concerns. Moreover, key indicators such as vehicle sales, cement volumes and GST
collections have seen a drop, signalling a cooling of economic activity.These
trends, coupled with a tight fiscal policy, suggest that domestic demand is
weakening, casting doubt on whether India can maintain its growth momentum.A pause
on rate cuts amid inflationary concerns?One of the key reasons the RBI is expected
to refrain from cutting rates is inflation. Though inflation has softened from its
peak, the RBI remains cautious about its durability. The central bank is also wary
of global risks, such as rising geopolitical tensions in West Asia, which could
drive up oil prices and exert pressure on domestic inflation.As per an ET (Economic
Times) poll of economists, 80% of respondents expect the RBI to keep the repo rate
unchanged at 6.50%, marking the tenth consecutive meeting with no rate cuts. This
reflects the RBI’s cautious stance, with inflation still posing a significant risk
to price stability.“In our base case, we expect two rate cuts this fiscal, with the
first one in October unless risks arising from the geopolitical situation push the
rate cut decision. Lower inflation this fiscal compared to the last should make way
for easing monetary policy. For the fiscal, good monsoon and healthy kharif sowing
should bring down food inflation, and hence the headline, compared with the past
fiscal,” said CRISIL’s Principal Economist Dipti Deshpande.However, core inflation
— a measure that excludes food and energy prices — has subdued, sitting near a
series-low. Some economists argue that this gives the RBI room to adopt a more
accommodative stance in the coming months. According to a report from Nuvama, the
central bank is expected to shift its stance from ‘withdrawal of accommodation’ to
‘neutral’ in this policy meeting, signalling potential rate cuts later this year,
possibly in December.New members to bring a change?The upcoming meeting will be the
first time the newly appointed external members of the MPC — Ram Singh, Saugata
Bhattacharya, and Nagesh Kumar — participate in setting India’s monetary policy.
Their views could tilt the balance of the committee, which has previously been
divided on the appropriate monetary stance.Economists are watching Bhattacharya
closely. In an opinion piece he wrote in August, Bhattacharya made a strong case
for cutting rates, arguing that the high real rates, adjusted for inflation, could
harm growth. Barclays economists Shreya Sodhani and Amruta Ghare have noted, “We
expect the MPC to keep policy rates and stance unchanged next week, with at least
one dissenting vote, likely from the new external members.”“Broadly, the new three
members have a background similar to the previous members and no drastic change is
expected in the policy decision-making because of the same. Although the
perspective and approach of each external member may differ, the ultimate policy
decision is dependent on the prevalent growth and inflation situation at a point of
time and the prospects on account of both internal and external factors,” said
Jyoti Prakash Gadia- Managing Director at Resurgent India.Though it remains to be
seen how Bhattacharya’s views have evolved since August, his appointment could
inject a dovish tilt into the committee. In August’s meeting, two external members
had voted for a rate cut, and Bhattacharya could now carry forward that
baton.External headwinds: Will global trends impact RBI’s decision?While the
domestic economy remains the central focus, global developments cannot be ignored.
Notably, the US Federal Reserve recently started cutting rates, a move that could
influence the RBI’s approach. Historically, the RBI’s monetary policy has been
shaped by global trends, especially those originating in major economies like the
US and the Eurozone. However, SBI’s report suggests that the central bank may adopt
an independent approach, focusing more on domestic economic conditions than
following in the Fed’s footsteps.The Nuvama report, however, highlights that the
Fed’s easing cycle could still play a role in the RBI’s decision-making process,
even as India navigates its own growth-inflation dynamics. A shift in the Fed’s
stance could offer more flexibility for the RBI to soften its own monetary stance
in the coming months.Deloitte India’s economist Dr. Rumki Majumdar suggested that
the RBI may not go for a policy rate cut till it sees the last-mile inflation
coming down sustainably.“There are still risks of US inflation going up (given that
inflation, at 2.5% YoY, is still above the Fed's target rate of 2%) as the Fed
starts easing monetary policy. Higher inflation in the West will cause imports to
get costlier,” Majumdar added.“The RBI would prefer to wait and watch the
inflationary pressures that emanate from a myriad of risks and how the markets
react to the US policy rate cuts,” she further said.Future easing on horizon?In its
October meeting, the RBI is widely expected to maintain its repo rate at 6.50%,
citing strong domestic growth and lingering inflation concerns. The newly
constituted Monetary Policy Committee, including new external members, may produce
at least one dissenting voice, advocating for rate cuts.However, the RBI is likely
to signal a shift in its monetary stance to neutral, paving the way for potential
rate cuts later in the year as global and domestic economic conditions evolve.
While the domestic economy shows signs of a slowdown, and inflation pressures have
eased somewhat, the central bank’s cautious approach is expected to prevail for
now, ensuring stability in the face of global uncertainties.The upcoming Monetary
Policy Meeting will be closely watched, not only for the decision itself but for
the signals it sends about the future course of monetary policy in India.

11. Published on: 2024-10-07

Keywords: ['RBI MPC meet', 'RBI MPC meet date', 'RBI MPC meet time', 'RBI MPC',
'shaktikanta das', 'rbi mpc meeting', 'rbi meeting time', 'rbi monetary policy
time', 'rbi mpc meeting today', 'rbi moneary policy meeting']
Headline : RBI MPC meeting today, check time, where and how to watch live telecast
online
Content : The Reserve Bank of India (RBI) led by Governor Shaktikanta Das started
its three-day monetary policy meeting on Monday which will be shaping the
trajectory of India’s monetary policy amid a volatile global economic backdrop. MPC
Chairman RBI Governor Shaktikanta Das will reveal the outcome of the three-day
discussion on Wednesday at 10 am.All eyes would be on the central bank that kept
the repo rate unchanged for nine consecutive sessions at 6.50%, in an effort to
balance inflation control with economic growth. The central bank is unlikely to cut
the benchmark interest rate as retail inflation is still a cause of concern, and
there is a possibility of the Middle East crisis deteriorating further, impacting
crude oil and commodity prices.Read More: RBI MPC Meeting Live UpdatesPreviously,
the government reconstituted the rate-setting panel -- Monetary Policy Committee
(MPC) with three newly appointed external members. The decision to keep repo rate
unchanged was voiced by a recent poll conducted by the Economic Times, which
surveyed 10 respondents. The next meeting of the rate-setting panel will be from
December 4 to 6 where the six members will be gathering once again to decide on
rate cuts. When will the rate-setting panel meet?The six member panel will be
meeting from October 7 to 9. When will the outcomes of the panel be out?MPC
Chairman and RBI Governor Shaktikanta Das will announce the results of the three-
day deliberations today at 10 am.Where to watch the MPC meet?You can catch live
updates on the outcomes and meetings on economictimes.com.

12. Published on: 2024-10-07

Keywords: ['RBI monetary policy', 'repo rate', 'RBI meeting', 'haktikanta das',
'RBI MPC meeting', 'RBI rate cut chances', 'RBI rate decision', 'RBI policy meting
date', 'rbi policy meeting result', 'fed rbi rate cut']
Headline : RBI monetary policy meeting starts: The script isn't changing?
Content : The Reserve Bank of India (RBI) will kick off its three-day monetary
policy meeting on Monday, which will run from October 7 to October 9. The outcome
of the MPC meeting will be announced on October 9, shaping the trajectory of
India’s monetary policy amid a volatile global economic backdrop.The central bank
has kept the repo rate unchanged for nine consecutive sessions at 6.50%, in an
effort to balance inflation control with economic growth. Analysts expect the
central bank to keep interest rates steady once again, especially as it evaluates
the sustainability of recent declines in inflation. At the same time, escalating
tensions in West Asia have raised concerns about their potential impact on local
price levels.A recent poll conducted by the Economic Times, which surveyed 10
respondents, indicated that the RBI is likely to keep the repo rate unchanged. This
would mark the 10th consecutive bi-monthly meeting without a rate change. The
Monetary Policy Committee (MPC), which last met in early August, will gather again
from October 7-9. The repo rate, which is the rate at which the RBI lends to
commercial banks, is a key tool in controlling liquidity and inflation.Led by RBI
Governor Shaktikanta Das, the MPC is expected to take into account several crucial
factors, including ongoing inflationary pressures, global economic uncertainties,
and domestic growth trends. Inflation remains a point of concern, particularly with
food and fuel prices, which surged earlier this year. While India’s retail
inflation in August fell to 3.65%, well within the RBI's target band, food
inflation remains high at 5.65%, surpassing the central bank’s medium-term goal of
4%.Despite these challenges, the RBI is expected to maintain its current stance on
the repo rate to support the ongoing economic recovery. However, external risks,
particularly the surge in global crude oil prices due to tensions in West Asia,
could eventually force the central bank to reconsider its policy.The MPC has seen
some changes in its composition, with three new external members recently appointed
by the central government. These include Professor Ram Singh from the Delhi School
of Economics, economist Saugata Bhattacharya, and Dr. Nagesh Kumar from the
Institute for Studies in Industrial Development. They join three internal members
from the RBI, including Governor Das, the Deputy Governor in charge of monetary
policy, and a nominated officer from the RBI’s Central Board.The US Federal Reserve
recently slashed interest rates by 50 basis points following eight meetings of
steady rates. This move has added to the complexity of the global monetary
environment, which the RBI will have to navigate carefully.

13. Published on: 2024-10-07

Keywords: ['manufacturing sector', 'ease of doing business', 'stable policies',
'renewable energy', 'solar segment', 'job creation', 'domestic manufacturing',
'government initiatives']
Headline : Stable policies, ease of doing business to boost manufacturing: Experts
Content : Stable policies and further improvement in the ease of doing business in
states will help significantly boost the country's manufacturing sector's growth,
according to experts.They also said that sectors like renewable energy,
particularly in the solar segment and electronics, hold huge potential to promote
domestic manufacturing and create thousands of jobs.113785163The government has
already taken a series of steps like rolling out the production-linked incentive
scheme (PLI) for 14 sectors, tweaking tariffs and issuance of mandatory quality
control orders for different products to support domestic players and increase
manufacturing activities, they added.113810834 Stable policies and further
promotion of ease of doing business at the state level will help significantly
boost the country's manufacturing sector growth, Sujoy Ghosh, vice president and
country managing director, First Solar, said.

14. Published on: 2024-10-06

Keywords: ['RBI', 'interest rates', 'Monetary Policy Committee', 'repo rate', 'food
inflation', 'bank of baroda', 'kotak mahindra bank']
Headline : ET Poll: RBI may hit pause button on interest rates again
Content : Mumbai: The Reserve Bank of India (RBI) is seen keeping interest rates
unchanged this week as the central bank's Monetary Policy Committee (MPC) is likely
to assess the durability of recent declines in inflation while keeping a wary eye
on escalating tensions in West Asia, which pose risks to local price
pressures.According to an ET poll of 10 respondents, the RBI is likely to keep the
repo rate unchanged at 6.50%, marking the 10th consecutive bi-monthly statement in
which it has maintained a status quo on rates. The repo rate is the rate at which
the RBI lends to banks. The newly reconstituted MPC meets October 7-9. The MPC's
last three day meeting was from August 6-8. 113992378Even as headline retail
inflation has eased over the past few months, with the August consumer price index
(CPI) reading at 3.65%, economists said that a likely rise in the price gauge in
September would prevent the RBI from joining the ranks of central banks in some
advanced economies and reducing interest rates.The MPC's target for headline retail
inflation is 4%, with a tolerance band of 2 percentage points on either side of
that. For over a year now, the central bank has been battling high food inflation
caused by weather disruptions and supply side issues.‘Food Price Pressures may Ease
by Year-end’However, with a normal June-September monsoon, analysts expect food
price pressures to ease by the end of the calendar year.“I think we can all agree
that high inflation has persisted and will remain there for the next few months,”
said Bank of Baroda chief economist Madan Sabnavis. “So there will be a pause in
change in rate and stance, as it will be too premature with the ongoing war and
inflation. What will be interesting is their forecasts on inflation and if they
keep up with the 4.5% inflation prediction for the next year.” Food inflation,
which accounts for around half the overall CPI basket, rose to 5.66% in August,
from a 13-month low of 5.42% in July, the latest data showed. Retail inflation rose
to 3.65% on an annual basis in August against 3.54% a month earlier.Geopolitical
conflictAside from the need to ensure the inflation decline will be sustained, the
recent escalation in the violence in West Asia is another factor that would likely
prevent the MPC from bringing down rates, as supply chain disruptions posed by the
conflict have caused upside risks to global commodity prices.Crude oil prices have
surged in the last week by over 5% due to the West Asia troubles. Brent crude
prices were 5.03%, at $77.62 a barrel over concerns that escalation could prompt
Iran to block the Strait of Hormuz, according to Reuters.The strait is a key
logistical choke point through which a fifth of daily oil supply passes. An upside
in crude oil prices is detrimental for domestic trade and inflation as India is a
major importer of the commodity.Stance change?While none of the respondents
expected a change in the repo rate, five institutions predicted a change in the
monetary policy stance to neutral from the current one of withdrawal of
accommodation.Analysts pointed to the RBI's tolerance of surplus liquidity in the
banking system as a sign of the central bank willing to accept slightly looser
financial conditions while keeping the benchmark policy rate unchanged for now.With
credit expansion outpacing deposit growth and heavy foreign inflows into Indian
debt, the central bank has permitted surplus liquidity conditions since July,
barring a few days in September when quarterly advance tax payments drained the
system of funds.“There has been ample liquidity since July, and the RBI is not
doing much to sterilise this liquidity, and overnight rates have also been lower
than repo rates,” said Kotak Mahindra Bank chief economist Upasna Bhardwaj. “Even
though they have said ‘withdrawal of accommodation,’ this surplus liquidity means
that they (RBI) have started accommodating. All of this does indicate that the RBI
should now suggest something.”In August, daily average surplus liquidity in the
system stood at Rs 1.5 lakh crore, while September saw an average of Rs 1.29 lakh
crore, stripping out seven days when the system was in deficit. In July, the
average was at Rs 1.34 lakh crore, an analysis of central bank data showed.The
global interest rate scenario is also now more favourable for the RBI, with the US
Federal Reserve delivering a 50 basis point rate cut last month, along with an
easing of rates by the Bank of England and the European Central bank in the past
months.While the Indian central bank has made clear it’s driven by domestic
inflation considerations, rate cuts in advanced economies mean a wider rate
differential with advanced economies. A wider interest rate differential plays an
important role in the rupee exchange rate, with a shrinking gap typically leading
to weakness in the local currency.

15. Published on: 2024-10-06

Keywords: ['india', 'nicholas stern', 'deepshikha sikarwar', 'grantham research
institute', 'transition?india', 'london school of economics', 'china']
Headline : 'There's no choice, India needs to grow the clean way', says Lord
Nicholas Stern
Content : If India grows in the dirty way of the other countries, it will be bad
for India and bad for the world, cautioned Lord Nicholas Stern, IG Patel Professor
of Economics and Government and chair of Grantham Research Institute at the London
School of Economics. In an interview to ET's Deepshikha Sikarwar, Stern - author of
the influential Stern Review that warned against the economic impact of climate
change - said the country has an enormous opportunity to leapfrog and pass the
dirty models of the past for cleaner and sustainable growth. Edited excerpts:You've
closely watched India over the last many years. What needs to be done to reach the
developed nation goal?Developed country by 2047 is a realistic goal. It's tough,
but it is realistic. And it does mean keeping up the 6%-7% or 7%-plus growth rates
for that whole period. And 7% growth rate doubles in a decade. So, it means that at
that rate of growth, India's economy could go up by a factor of 5, 6, or 7 in that
time period to 2047. It is possible that it would more or less do it. But it does
mean growing strongly in that time. The second thing to say is that growth will
have to be growth that is sustainable from the point of view of society, inequality
and particularly the environment, because India is very vulnerable to collapse in
climate and biodiversity. And, of course, India, as a big country of emissions,
even though its history has been of...very low emissions relative to other
countries, building that growth story in a sustainable way will be very important
to its achievement. If the world doesn't act strongly on climate and biodiversity,
the conditions by the middle of the century could be so bad that those kinds of
growth rates are just unachievable. It's not that there's a choice between
environment and sustainability on the one hand and growth on the other. Unless you
do both, you get neither. And India now is starting to move - and more than
starting to move - quite strongly in that direction, with green energy looking to
improve its public transport, and so on.The developed world did not face these
compulsions when they were growing. Will it be possible for India to balance green
transition with growth required to become a developed country?I think the answer to
that is, absolutely yes. And the investment in the new way of doing things (and)
the leapfrogging to the better, cleaner way of doing things will be something that
India absolutely can do. And if India grows in the dirty way of the other
countries, it will be bad for India and bad for the world. It's not a choice... It
will undermine growth.It's completely wrong to suggest there's some kind of horse
race between environment and development. Unless we do both together by mid-
century, we will get neither. If India tries to grow in the dirty way, it will
undermine its own growth. Dirty growth doesn't last. It undermines itself.What is
your assessment of India's green transition?India is really starting to move in a
good direction. You know, India really is building its clean electricity capacity
and I think to have a really strong strategy now over the next 10-15 years for
building electricity and building transport and building infrastructure in a clean
way...that's where India is moving. It's where India has started to move and I
think that's the future of India - the leapfrog the dirty, destructive models of
the past. I think so many people in the Indian leadership, in the public and
private sector, see that.One key issue is technology transfer. How can it be
ensured that developing countries like India have access?The technologies are not
like pharmaceuticals. Pharmaceuticals are very well-defined drugs with a makeup
that is patentable. These technologies are largely around skills. If you think of
how India's car industry was built, it was built around collaboration, the
acquisition of skills. There's not much patent in that story. But there's still a
question of how you build those skills. I think it will need low-cost
investment...some subsidies at the beginning in order to build up those skills in
India. The cheapest (products) available at the moment are mostly from China,
whether it's PVs or batteries or electric vehicles. And India has political reasons
to want to build those strengths itself. I think part of that support could be from
rich countries. It's conceivable that some might be from China, but I suspect
that's unlikely for geopolitical reasons. That's a fact. So, let India build those
skills itself collaborating with others. If India grows in the dirty way of the
other countries, it will be bad for India and bad for the world, cautioned Lord
Nicholas Stern, IG Patel Professor of Economics and Government and chair of
Grantham Research Institute at the London School of Economics. In an interview to
ET's Deepshikha Sikarwar, Stern - author of the influential Stern Review that
warned against the economic impact of climate change - said the country has an
enormous opportunity to leapfrog and pass the dirty models of the past for cleaner
and sustainable growth. Edited excerpts:You've closely watched India over the last
many years. What needs to be done to reach the developed nation goal?Developed
country by 2047 is a realistic goal. It's tough, but it is realistic. And it does
mean keeping up the 6%-7% or 7%-plus growth rates for that whole period. And 7%
growth rate doubles in a decade. So, it means that at that rate of growth, India's
economy could go up by a factor of 5, 6, or 7 in that time period to 2047. It is
possible that it would more or less do it. But it does mean growing strongly in
that time. The second thing to say is that growth will have to be growth that is
sustainable from the point of view of society, inequality and particularly the
environment, because India is very vulnerable to collapse in climate and
biodiversity. And, of course, India, as a big country of emissions, even though its
history has been of...very low emissions relative to other countries, building that
growth story in a sustainable way will be very important to its achievement. If the
world doesn't act strongly on climate and biodiversity, the conditions by the
middle of the century could be so bad that those kinds of growth rates are just
unachievable. It's not that there's a choice between environment and sustainability
on the one hand and growth on the other. Unless you do both, you get neither. And
India now is starting to move - and more than starting to move - quite strongly in
that direction, with green energy looking to improve its public transport, and so
on.The developed world did not face these compulsions when they were growing. Will
it be possible for India to balance green transition with growth required to become
a developed country?I think the answer to that is, absolutely yes. And the
investment in the new way of doing things (and) the leapfrogging to the better,
cleaner way of doing things will be something that India absolutely can do. And if
India grows in the dirty way of the other countries, it will be bad for India and
bad for the world. It's not a choice... It will undermine growth.It's completely
wrong to suggest there's some kind of horse race between environment and
development. Unless we do both together by mid-century, we will get neither. If
India tries to grow in the dirty way, it will undermine its own growth. Dirty
growth doesn't last. It undermines itself.What is your assessment of India's green
transition?India is really starting to move in a good direction. You know, India
really is building its clean electricity capacity and I think to have a really
strong strategy now over the next 10-15 years for building electricity and building
transport and building infrastructure in a clean way...that's where India is
moving. It's where India has started to move and I think that's the future of India
- the leapfrog the dirty, destructive models of the past. I think so many people in
the Indian leadership, in the public and private sector, see that.One key issue is
technology transfer. How can it be ensured that developing countries like India
have access?The technologies are not like pharmaceuticals. Pharmaceuticals are very
well-defined drugs with a makeup that is patentable. These technologies are largely
around skills. If you think of how India's car industry was built, it was built
around collaboration, the acquisition of skills. There's not much patent in that
story. But there's still a question of how you build those skills. I think it will
need low-cost investment...some subsidies at the beginning in order to build up
those skills in India. The cheapest (products) available at the moment are mostly
from China, whether it's PVs or batteries or electric vehicles. And India has
political reasons to want to build those strengths itself. I think part of that
support could be from rich countries. It's conceivable that some might be from
China, but I suspect that's unlikely for geopolitical reasons. That's a fact. So,
let India build those skills itself collaborating with others.