At present, each lender has its own format, which leads to data variation, an issue flagged by the banking regulator, leading to a rise in cases of customers facing denial of loan or reduction in credit limit. "We are working on a common format," said a bank executive familiar with the development.
“Monetary policy transmission to bank lending and deposit rates has been stronger in this cycle compared to previous cycles” the Reserve Bank of India said In its latest Financial Stability Report.
The Reserve Bank of India (RBI) is expected to keep repo rates unchanged for an extended period due to easing core inflation and high real interest rates. However, the frequent fluctuations in food prices may require the RBI to remain vigilant. The RBI aims to maintain macroeconomic stability but acknowledges uncertainties such as adverse weather events, global food and energy prices, and volatility in global financial markets. The MPC meeting also discussed the need to sustain and stimulate investment, projecting a GDP growth of 6.5% for FY24.
Experts predict that the Reserve Bank of India (RBI) will maintain the current benchmark interest rate at its bi-monthly monetary policy review due to elevated inflation and global factors. The RBI has kept the rate unchanged in the last three policy reviews and is expected to continue with the existing rate structure. The RBI's mandate is to ensure that retail inflation remains at 4% with a margin of 2% on either side. The MPC, headed by RBI Governor Shaktikanta Das, will announce the policy review on Friday.
India's private sector is beginning to invest, according to Finance Minister Nirmala Sitharaman. She expressed confidence that the country's economy will perform well in the coming quarters and that India will be able to handle the effects of high US interest rates. Sitharaman also stated that Prime Minister Narendra Modi will win re-election in 2024, as the government has delivered on its promises.
Closely followed by the markets, the two rates are now at historic lows, after previous reductions in June. The decision is intended to encourage commercial banks to grant more loans and at more advantageous rates. Monday's measures -- which run counter to rising interest rates around the world as other major economies work to curb inflation -- will indirectly support economic activity as China's growth flags.
"Our own expectation is that they aren't going to change anything on the rates front for the rest of this fiscal year," said Radhika Rao, economist at DBS in Singapore. "Cuts will mostly take place in March 2024, which will be preceded by a change in stance, and a much more cautious commentary on growth."
The merger of HDFC with HDFC Bank, worth $40 billion, is expected to cause a deceleration in credit off-take to 13-13.5% this fiscal from over 15% last fiscal, according to a report. Personal loans and lending to non-banks drove an increase of 15.4% on-year to INR 140.2 lakh crore for the fortnight to June 16. Despite this growth, credit growth is expected to decelerate in FY24, the report said.
"So far as India is concerned, both regulators and regulated entities need to stay the course with an unwavering commitment to ensuring a stable financial system," RBI Governor Shaktikanta Das wrote in the semi-annual Financial Stability Report. "It has to be remembered that seeds of vulnerability often get sown during good times when risks tend to get overlooked."
Our aim is to become the undisputed leader in professional services, distinguished by our quality, brand, well-being, and scale, said Romal Shetty, CEO, Deloitte South Asia.
Debt servicing capacity of manufacturing companies measured by interest coverage ratio (ICR) moderated to 7.3 in 2022-23 from 8.4 in 2021-22 due to a rise in interest expenses. But the metric was significantly higher than the minimum viable value of 1.
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