The business wrap: Nirmala Sitharaman calls for 2% RBI interest rate cut, and six other top stories

A look at headlines in the sector right now:

  1. Nirmala Sitharaman calls for 2% RBI rate cut to boost MSME growth: The minister said the Micro, Small and Medium Enterprise sector is ‘hard pressed for money’ because of the current interest rate set by the central bank.
  2. Walmart, other US retailers to investigate Welspun India products after Target cancels contract: The textile company’s market value dropped by nearly 50% after Target accused it of passing off standard cotton sheets as premium Egyptian ones.
  3. Centre, Monsanto dispute escalates as company pulls GM cotton seeds to protest technology sharing: The biotech giant and the government are also at odds over how much can be charged for its genetically modified seeds.
  4. Railways to start talks with Facebook to offer free Wi-Fi at rural stations, nearby villages: The social media company recently concluded a pilot programme for its Express Wi-Fi service across 125 locations in rural India.
  5. Government may soon allow calls and Wi-Fi facilities in Indian airspace, says aviation secretary: Earlier, security agencies did not have technology to monitor data transmission over Indian airspace, which the Centre is now hoping to resolve.
  6. Tata Power crosses 2 million consumer base in India: The country’s largest integrated power firm said it remains committed to provding reliable and uninterrupted power supply at competitive prices.
  7. Centre approves rail infrastructure projects worth Rs 24,000 crore: The Cabinet Committee on Economic Affairs cleared the massive line expansion programme, which involves track construction of a total length of 1937.38 km at an estimated cost of Rs 24,374.86 crore.

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RBI To Study Why Indians Spend Large Money To Buy Gold

RBI has set up a committee to study Indian household pattern and why they spend on gold.
RBI has set up a committee to study Indian household pattern and why they spend on gold.
Mumbai: Reserve Bank of India has set up a committee to study Indian household financing pattern and why they spend large sum of money on gold.

The panel will look at various facets of household finance in India and to benchmark India’s position vis-a-vis both the peer and advanced countries, it said in a statement today.

The panel headed by Tarun Ramadorai, Professor of Financial Economics, University of Oxford will have representation from financial sector regulators, Sebi, Irdai, PFRDA apart from RBI.


It will consider “whether, how, and why the financial allocations of Indian households deviate from desirable financial allocation and behaviour (eg, the large household allocation to gold)”.

The committee has also been asked to benchmark the current depth of household financial markets in India vis-a-vis those in other major world markets and to identify areas of priority for growth and change.

To characterize and evaluate households’ demands in formal financial markets (for assets such as pensions as well as liabilities such as home loans) over the coming decade, is another key term of reference given to it.

RBI further said that the panel will evaluate the “design of new systems and the redesign of existing systems” of incentives and regulations to encourage and enable better participation by households in formal financial markets.

The terms of reference also include assessing the role of new financial technologies and products (robo-advising, automatically refinancing mortgages) in the cost-effective provision of high-quality and suitable financial products to Indian households while containing risks.

The committee is expected to submit its report by end July 2017.

The demand for formal financial market investment product like pension as well as liability product like home loan from the Indian household was discussed during the meeting of the Sub Committee of Financial Stability and Development Council (FSDC-SC) held in April.

It was decided that a committee should be set up to look at various facets of household finance in India and submit a report, RBI said.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)


RBI Releases Framework on Payments Systems

RBI Releases Framework on Payments Systems

Reserve Bank Thursday released its framework for ‘Payment and Settlement Systems in India’, with a view to moving towards “less-cash” society and ensuring access of mobile banking services to even basic phone users.

The Vision-2018 reiterates commitment of RBI to encourage greater use of electronic payments by all sections of society so as to achieve a “less-cash” society,RBI said.

“The policy efforts will also focus on ensuring that access to mobile banking services is seamlessly provided to the large number of users of non-smartphone handsets in multiple languages,” it said.

Leveraging on 5Cs – Coverage, Convenience, Confidence, Convergence, Cost – Vision-2018 focuses on responsive regulation, robust infrastructure, effective supervision and customer centricity, it said.

“Building a robust payments infrastructure in the country to increase the accessibility, availability, interoperability and security of the payment systems will continue to remain a key objective”, RBI said in a release.

RBI said the proposed new policies to be framed under the Vision with focus on electronic payments will influence trends in payment systems in the country.

“The high mobile density in the country is being increasingly leveraged to offer payment services by a wide range of payment service providers so as to enable an on the-go, faster payment experience to the customers, it said.

Service providers will be encouraged to use technology to provide innovative easy to use mobile based payment solutions in an interoperable environment without compromising on security, RBI said.

RBI expects the Vision to result in a continued decrease in the share of paper-based clearing instruments; growth in individual segments of retail electronic payment systems – NEFT, IMPS, card transactions, mobile banking.

As well as increase in registered customer base for mobile banking; significant growth in acceptance infrastructure; and accelerated use of Aadhaar in payment systems.

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Tags: Apps, India, Internet, Online Payments, Online Wallets, Payments Banks, RBI, Reserve Bank of India

Indian Banks’ Terrible Loans Might also Upward thrust to 8.5% By means of March 2017: RBI

Indian Banks' Bad Loans May Rise to 8.5% By March 2017: RBI

Mumbai: Gross Horrific loans at Indian banks Might also Upward push to 8.five per cent of generalproperty By way of March 2017 from 7.6 percent in March 2016 if the significant financial institutionorders them to conduct a 2nd round of asset excellent evaluations, a Reserve financial institution of India (RBI) record said on Tuesday.

In the meantime, underneath a “severe pressurescenario, overall Bad loans may want to Upward thrust to nine.3 percent in March 2017, the RBI said in its semi-annual Financial Balance file.

The RBI brought that the assessments, though “stringent and conservative”, had been additionallyhypothetical, pronouncing “the intense negative monetary situations mentioned here must not be interpreted as forecast or anticipated effects.”

The RBI ultimate 12 months instructed banks to conduct an asset quality evaluation (AQR) in a bid to get a better photo of the extent of potentially soured property held inside the quarter.

Outgoing RBI Governor Raghuram Rajan had made cleansing up banks a priority in the course of hisalmost threeyear tenure given the arena is saddled with $120 billion of sour loans, that’s constraining new lending and company investments.

Nonetheless, the RBI has no longer ordered a second spherical of formal tests, even though it hasstated it might continue reviewing asset exceptional at banks.

“The stress within the banking sector, which mirrors the pressure within the corporate region, needs to be dealt with so as to revive credit score increase,” Mr Rajan wrote in the record.

The first AQR led banks to understand around $35 billion of latest Awful loans on account thatSeptember, pushing gross Awful loans to 7.6 in step with cent in March from five.1 in keeping with cent in September 2015.

In the meantime, usual burdened belongingswhich include Terrible loans in addition to restructuredassets – rose to 11.five percentage in March from 11.three percent six months in advance.

even though analysts agree with the evaluate has presented a more correct picture of Terrible debt in the area, it has dented profit and restrained credit growth over the past months.

That is the final Economic Stability file beneath Mr Rajan, after the previous Global Financial Fundchief economist greatly surprised the us of a this month By pronouncing he would depart whilst his tenure ends on September 4.

But analysts broadly assume the next RBI Governor to hold the push to smooth up the banking quarter.

© Thomson Reuters 2016

(This tale has no longer been edited With the aid of NDTV team of workers and is automobile-generated from a syndicated feed.)
tale first posted on: June 28, 2016 17:18 (IST)

Tags: RBI, NPA, Horrific loans, Banking region, Raghuram Rajan, Monetary Stability record, RBI governor