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FS Daily Bytes: 7th June

India

  1. RBI in its latest monetary policy review kept key rates unchanged, as expected and continued to maintain ‘neutral’ stance as against the GOI insistence for ‘accommodative’. RBI DG also mentioned that they will be keeping a close watch on CPI and other inflation parameters for the next couple of months
  2. RBI also declared that 83% currency have been remonetized post demonetization
  3. RBI also relaxed the risk weight requirements by the bank for its home loans greater than 30 lakhs. Between 30-75 lakh, the risk weight has been brought down to 35% while for > 75 lakh, it has been brought to 50% from earlier 75%. RBI also reduced SLR requirement by 50 basis points (0.5%) to 20%. Both these are expected to pump in more liquidity in the system by releasing capital from both CRAR and SLR
  4. Pvt sector bank KMB plans to raise 5000 Crore by tapping domestic & overseas market
  5. Farm waiver related controversies refuses to die down. Now RBI has opined that such waivers will impact fiscal situation if it goes uncontrolled. While such waivers do not affect the banks as they are paid off by the state (since state is waiving off) but that means state fiscal prudence goes for a toss! It can impact inflation as well
  6. CEA Arvind Subramanian stated that economic situation warrants easing of rates
  7. IIMA Prof Rajiv Dholakia was the only dissenter in MPC review of RBI
  8. Card payments seems to be on the rise but average value per transaction is on the rise implying a gradual shift of customers to cash for small value transactions
  9. NPCI is planning to ask banks not to charge for UPI payments to promote digital payments

International:

  1. Spanish bank Santander is to take over the smaller Spanish bank Banco Popular over liquidity concerns. The rescue seems to have the blessings of ECB as well
  2. System & software issue saw Philippines 4th largest bank (BPI) ending up doing wrong transfer of funds in & out of accounts. Fortunately, this is reported as a data processing glitch and not a hacking related issue. The bank is trying to resolve the same
  3. HSBC faces fresh suit on allegations of forex manipulations

 

Sources:

Various news feeds

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