Rupee continues slide; hits new low of 73.80 against US dollar

Continuing with its slide, the rupee on Thursday slipped past the crucial 73.50 levels to open at 73.70 against the US dollar. Minutes later, the currency bled further and slipped to 73.80.

The domestic currency on Wednesday plunged by 43 paise to breach the historic low of 73 level as soaring crude oil prices fuelled worries over capital outflows and widening current account deficit. The domestic currency closed at a record low of 73.34, down by 43 paise or 0.59 per cent at the interbank foreign exchange.

Sharp volatility in the domestic equities and steep FIIs outflows from equity and debt segments keeping sentiments bearish for the rupee, said Rushabh Maru - Research Analyst , Anand Rathi Shares and Stock Brokers. "The dollar index is hovering around multi-months high as the Federal Reserve continues to raise interest rates aggressively. Focus would now shift to the RBI monetary policy meeting. There is a buzz of repo rate hike by 25 bps and possible change in the monetary policy stance by the RBI. More importantly, its guidance will be crucial. Market will also keenly watch whether the RBI announces any crucial measures to stabilize the rupee. In the near term, the rupee might trade in 72.50 and 73.80 range," Maru added.

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YES Bank extends recovery; stock rises 21% in two sessions

Shares of YES Bank have risen for the second consecutive day, gaining over 10 per cent to Rs 223 levels on the National Stock Exchange (NSE) in intraday trade today, after the private bank said that it is fully prepared for the succession plan for its managing director and chief executive officer and will finalise two external experts for the search committee by October 7.

The stock has risen over 21 per cent in the past two sessions after it hit a 28-month low last week.

"Search & Selection Committee, assisted by a Global Leadership Advisory Firm, will evaluate both internal and external candidates and make suitable recommendations to the Board of Directors for onward submission to RBI.," the bank said in a regulatory filing on Monday.

YES Bank on Monday also released its unaudited financial results for the quarter to September. The bank registered a 41 per cent year-on-year rise in deposits at Rs 2.23 lakh crore in the second quarter (Q2FY19) while the CASA ratio grew 28.2 per cent YoY.

Gross non-performing assets stood at 1.35 per cent of gross advances compared with 1.82 per cent in the same quarter last year.

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Bandhan Bank tanks 20% as RBI bars it from opening new branches

Shares of Bandhan Bank are locked in lower circuit of 20% at Rs 451 per share on the BSE following Reserve Bank of India’s (RBI's) decision to stop the private sector lender from opening new branches and freezing the remuneration of its managing director & chief executive officer (MD & CEO) Chandra Shekhar Ghosh.
The stock was trading at its lowest level since its listing on March 27, 2018. It has fallen 39% from its all-time high level of Rs 741 touched on August 9, 2018, on the BSE in intra-day trade.

The trading volumes on the counter more than doubled with a combined 3.79 million shares changed hands on the NSE and BSE till 09:30 am. There were pending sell orders for 3.57 million shares on both the exchanges so far.

“The RBI has communicated to us that since the Bank was not able to bring down the shareholding of Non Operative Financial Holding Company (NOFHC) to 40% as required under the licensing condition, general permission to open new branches stands withdrawn and the Bank can open branches with prior approval of RBI,” Bandhan Bank on Friday said in a regulatory filing.

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Sensex, Nifty fall as RBI and govt measures fail to cheer investors

The benchmark indices fell on Thursday as concerns over the effects of a weaker local currency and crude oil prices on the economy outweighed steps by the government and the central bank to restore investor confidence.

Most global markets, too, were down as investors digested the likelihood of more Federal Reserve interest-rate increases stretching into next year.

The Sensex declined 0.6 per cent to 36,324.17, after falling as much as 0.8 per cent. The benchmark is now headed for its worst month in two and a half years, and volatility is back to levels seen in February. The index is down 5.9 per cent in September.

The Nifty declined 0.7 per cent to close at 10,977. The index has ended with losses in seven of eight past trading sessions. From its peak touched a month ago, the 50-share blue chip index is down 6.5 per cent.

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YES Bank gets a ratings cut after RBI order on Rana Kapoor

Brokerages including Citigroup and IDFC Securities have slashed their ratings on YES Bank, citing weak business outlook. This follows the Reserve Bank of India’s direction to CEO Rana Kapoor to step down after January 31, rejecting the lender’s request to extend his tenure by three years.

Kapoor’s departure might make raising fresh capital, as well as growing deposits and fee income, harder for the Mumbai-based lender, the brokerages said.

Citigroup, in a note, said the premium attached to YES Bank’s shares for Kapoor “can go away”. The bank’s senior management is competent, but Kapoor played a significant role in building the bank, it added. The note added that YES Bank might have to defer its capital raising plans, which could slow down growth. The brokerage downgraded the stock to ‘sell’ from ‘buy’. It cut its price target by 39 per cent to Rs 270.
Domestic brokerage IDFC said in a note that Kapoor’s departure will lead to a slowdown in loan and fee growth, which could “lead to a sharp fall in valuations”.

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World not ready to Make in India? Samsung plant masks Modi govt's struggle

Despite a sleek marketing campaign, the world isn’t quite ready to ‘Make in India.’

Last week, Indian Prime Minister Narendra Modi and South Korean President Moon Jae-in celebrated the inauguration of what Samsung Plant called the world’s largest mobile phone factory. At the splashy event just outside New Delhi, Modi said the facility was “extremely important” for his 'Make in India' initiative to boost manufacturing to 25 per cent of India’s economy by 2020 and create millions of jobs. Samsung said the plant was a “shining example” of the success of the program.

But the investment is more the exception than the norm. Data from the World Bank and the Reserve Bank of India (RBI) show manufacturing hasn’t received a significant boost since Modi took office in 2014.

While India’s economy has overtaken France to become the world’s sixth largest, manufacturing has shrunk to about 15 per cent of gross domestic product (GDP) from a peak of 18.6 per cent in 1995, according to the World Bank. Other data show new investments in India have dropped and stalled projects are on the rise.

RBI recruitment 2018: Registration for Grade B officer posts open!

RBI recruitment 2018 - The Reserve Bank of India(RBI) has announced the opening of Grade B officers post- DR, DEPR and DSIM n common seniority group (CSG) streams

Interested candidates can start applying for this post in its official website www.rbi.org.in or click here

The last date for submission of application is July 23, 2018.
Selection for RBI Grade B officers will be done through a competitive examination in three phases: Preliminary, main examination followed by an interview.

RBI Grade B vacany Following are the steps to register for the post:

Step 1: Click on the 'Direct Recruitment for the posts of officers in Grade ‘B’ (General) - DR, DEPR and DSIM in Common Seniority Group (CSG) Streams – 2018' button from www.rbi.org.in or click here

Step 2: Follow the necessary steps given in the 'How to apply' page or click here to know more More information on the RBI Grade B officers posts:

Qualification: Any graduate, postgraduate, PGDBA
Vacancies: 166 Posts
Salary: Rs. 35,150 - Rs. 75,831/- per month
Experience: 3 - 5 years
Job Location: Mumbai
Age restriction: 21 years and must not have attained the age of 30 years on the 1st of July, 2018
Last Date to Apply: 23-07-2018

No of Posts available:
1. Officers in Grade ‘B’(DR)- General: 127
2. Officers in Grade ‘B’(DR)- DEPR: 22
3. Officers in Grade ‘B’(DR)- DSIM: 17
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RBI purchases bonds worth Rs 100 billion from the secondary market

The Reserve Bank of India (RBI) has bought Rs100 billion worth of bonds from the secondary market under its open market operations (OMO) programme. This was the second OMO purchase this year, and something that the market was widely expecting, considering the banking liquidity reducing to neutral levels.

OMOs infuse durable liquidity in the banking system. The RBI did not buy anything from the bonds maturing in 2026 and 2029, but bought some amount from a loner period bond maturing in 2032, at 8 per cent, five basis points lower than the market rate. Read Full Story

MARKETS LIVE: RBI hikes repo rate by 25 bps; indices remain higher

Markets continued trading higher after the RBI maintained neutral stance in the second policy decision of FY19. The central bank hiked repo rate by 25 bps to 6.25%. This is the first rate hike in over four years, reverse repo rate adjusts to 6%.

An increasing number of economists expected the Reserve Bank of India (RBI) to raise interest rates on Wednesday, a Reuters poll found, but most still thought the central bank would stay on hold and use this week’s meeting to prepare for an August hike.

Globally,  Asian stocks edged up on Wednesday after tech sector strength lifted Wall Street shares, while concerns about Italy’s debt prompted investors to move into lower-risk government debt elsewhere, pushing US Treasury yields down from recent highs.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 per cent, while Japan's Nikkei edged down 0.1 per cent.

RBI monetary policy: Four charts show markets are preparing for a rate hike

The interest-rate cycle in India is turning. The central bank may be set to tighten policy next week to keep inflation in check and stem the declines in the rupee if the rate-market moves are any indication.

The Reserve Bank of India hasn’t tinkered with rates since August, and even cut inflation projections last month, raising expectations that borrowing costs would remain on hold. But a surprising hawkish tilt revealed in its April policy minutes and the recent spike in oil has boosted speculation the authority may lift rates at its June 6 meeting.

“Front-end bonds are fully pricing in a 25-basis point hike in June,” said Suyash Choudhary, head of fixed income at IDFC Asset Management Co. in Mumbai. “Even accounting for some higher supply absorption premium, one can say that a 75-basis point increase seems to be comfortably discounted over the next year.”

RBI to the rescue with likely $15 billion bond-purchase to cap yields

Embattled investors in India’s government bond market are hoping to see the light at the end of the tunnel as the central bank comes to their rescue.

Benchmark yields have likely peaked for 2018 after hitting a three-year high this week, and the Reserve Bank of India’s debt purchases will keep a lid on them even as higher inflation boosts the odds of monetary tightening, according to a survey of traders and fund managers.


The RBI is likely to buy 1 trillion rupees ($15 billion) of securities in the current fiscal year, the survey showed, as authorities seek to cool yields and ensure a smooth passage for the government’s borrowing program. The first tranche is due Thursday.

“At current levels, two rate hikes are already in the price and I don’t see yields surging much,” said Badrish Kulhalli, head of fixed income at HDFC Standard Life Insurance Co. in Mumbai. The purchases would help cap yields and provide an exit to state-owned banks -- the biggest holders of sovereign debt -- and others with stuck positions, he said.

ATM cash crunch: PMO takes stock; Madhya Pradesh hit for 3rd day; updates

A cash crunch at ATMs has hit a dozen states, including Uttar Pradesh, Madhya Pradesh, poll-bound Karnataka, Telangana, Andhra Pradesh, Bihar, Gujarat, Maharashtra, Rajasthan, and Punjab. While the Chhattisgarh Chief Minister said his state, too, was facing a cash crunch, with the crisis expected to pass shortly, bank authorities in Jammu & Kashmir and the government in Maharashtra said their respective states were not facing an ATM cash crunch. With automated teller machines (ATMs) drying up, the central government and the Reserve Bank of India (RBI) stepped in to address the currency shortage.

Finance Minister Arun Jaitley attributed the cash shortage to an unusual spurt in demand during the past three months and described it as "temporary", adding that the ATM cash crunch was being "tackled quickly" and that there was "more than adequate" currency in circulation. To fix the ATM cash crunch, the government said that the printing of Rs 500 denomination notes, about 5 billion of which are printed per day, would be increased by five times. Notes worth Rs 700-750 billion (Rs 70,000-75,000 crore) would be printed in a month.

However, what caused the cash crunch and ATMs running dry in the first place? The suspected hoarding of Rs 2,000 notes was cited as one reason by the government. The RBI, for its part, said that logistics and recalibration issues were limiting cash replenishment at ATMs. Further, Finance Minister Jaitley said that the "temporary shortage" was caused by a "sudden and unusual increase (in demand)" in some areas and that it was being "tackled quickly". With the RBI and banks blaming cash management companies for ATMs running dry, ATM industry representatives said that it was the banks that were unable to meet the demand for cash. They said banks had not been able to meet their indent, the daily calculation of cash required, for the past four-five days.

After Nirav Modi scam at PNB, fear of sweetheart deals at other banks too

These are early days in the Nirav Modi saga, but top financial sector officials are not ruling out more such sweetheart deals at other banks, given that the overseas bill discounting business that traders deal in is highly porous.

The present case has surfaced because an innocuous rule change by the Reserve Bank of India (RBI) in early January forced Punjab National Bank (PNB) to tap Nirav Modi and other importers for more margin money. Another trigger, it would seem, was an alleged query from RBI seeking the bank’s response over one of its officials allegedly demanding favours from Modi’s company in return for issuing the next Letter of Undertaking, or buyer’s credit.

The recent developments have also effectively nixed the bank’s plans to merge any other state-owned bank with itself until the scam fire is doused – and that will take quite some time.
Another associated issue is how two of the bank’s employees continued undisturbed in their perch for so many years.

After yellow Rs 200 notes, get ready for new chocolate brown Rs 10 notes

Still haven't gotten used to the new Rs 200 notes in bright yellow (or is it orange)? Soon, you will be paying your balance using chocolate coloured Rs 10 notes. According to reports, the Reserve Bank of India (RBI) is set to issue new Rs 10 notes that will be chocolate brown in colour.

The new Rs 10 note will be issued by the central bank under the Mahatma Gandhi series and it will sport the picture of the Konark Sun Temple, which is situated in Odisha, Moneycontrol reported on Thursday. Further, citing people familiar with the matter, the financial daily reported that around one billion pieces of the new note have already been printed by the RBI.

The last time the design of the old Rs 10 note was changed was in 2005, the report added. The new design, the financial daily said, was approved by the government just last week.

But why are we set for a newly-designed Rs 10 note? According to the financial daily, the move to re-design lower denomination notes is part of the government's plan to get rid of counterfeit currency in the country.

As reported in December last year, according to information provided by the Minister of State for Finance, P Radhakrishnan, as many as 169.6 million pieces of Rs 500 denomination note were printed till December 8. The minister also informed that the RBI printed 36.5 million pieces of Rs 2,000 notes. Similarly, 17.8 million pieces of Rs 200 notes had been printed by that time.
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RBI to stay on status quo for the rest of 2017: Here's what experts say

The Reserve bank of India (RBI) has determined to maintain the repo rate unchanged at 6 per cent. The six-member monetary policy Committee (MPC), headed by means of Reserve bank of India (RBI) Governor Urjit Patel, announced hobby rate selection on Wednesday at the same time as providing its fourth bi-annual monetary coverage.

Analysts in large part predicted the significant bank to hold the fame quo, but delivered there could be a price reduce later within the monetary year.
next coverage assembly has been scheduled for December 5.
right here's what professionals have to mention:

Tushar Arora, Senior Economist of HDFC financial institution to Sify.com

"No surprises as such. Going strictly with the aid of the optics of headline inflation is unlikely to result in rate cuts. Room to maneuver will simplest come if the MPC chooses to make use of the +/-2 percent bandwidth and indeed looks through a marginal upward push in inflation above the four percentage stage. I trust this may occur later all through the yr as increase numbers hold to marvel on the downside."
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RBI likely to hold rates on October 4 policy: Morgan Stanley

With the vulnerable GDP growth in the Jun-17 area, the talk on imparting stimulus to the economic system reemerged. however, the potentialities of a fee cut had been dampened by the August CPI inflation print of 3.4%, which surprised on the upside.

indeed, with inflation predicted to upward push closer toward the RBI's inflation target, we do now not suppose there is a lot room to ease monetary policy further. moreover, the ability monetary easing could should be evaluated within the context of its impact on inflation.

As non-public capex remains tremendously subdued, it has been recommended that further easing (inside the shape of decrease charges) will help boost growth. but, on this regard, the RBI has taken the view that movements to resolve the banking device's non-appearing loans will be key to fostering the healing in capex and credit demand areas in place of in addition fee cuts. This changed into most these days emphasized through the governor within the remaining MPC minutes, wherein he referred to that "decision of careworn balance sheets of banks, consequently, will stay important for reviving credit score call for and the funding cycle."

Taken together, we think this translates into an MPC vote of 5-1 to hold quotes on maintain even as preserving a impartial stance (Dr. Dholakia will possibly hold to press the case for in addition easing).

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Note ban effect: Currency printing cost more than doubles to Rs 7,965 crore

Note ban effect - The Reserve Bank of India (RBI) spent Rs 7,965 crore on printing currency notes between July 2016 and June 2017, compared to Rs 3,420 crore in 2015-16, an increase of 133%, according to RBI’s annual report 2016-17.

This was highest over the last 17 years, Bloomberg reported on August 30, 2017.

The rise in expenditure was attributed to newly designed notes of higher denominations and the need to replace demonetised currency, the RBI report said. Banknotes were often airlifted from the presses to RBI offices across the country to ensure currency was available after demonetisation, adding to the cost of distribution.

Prime Minister Narendra Modi on November 8, 2016 announced the withdrawal of Rs 500 and Rs 1,000 notes–which constituted 85% of cash in circulation–in a move to fight corruption, black money, money laundering, terrorism and financing of terrorists as well as counterfeit notes, a narrative that kept changing, as IndiaSpend reported on December 5, 2017.

Of Rs 15.44 lakh crore demonetised currency in circulation, about 99% or Rs 15.28 lakh crore came back to the central bank as on June 30, 2017, the annual report said.
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Is Modi winning fake currency war? A data you shouldn't miss

A discussion on fake Indian currency notes (FICN) has been doing the rounds, especially since demonetisation. While the quantum of fake notes in circulation remains difficult to ascertain, data on the detection of fake notes by the Reserve Bank of India (RBI) throws some light on the possible range. The RBI put the figures of fake notes in FY17 at Rs 43.47 crore in its annual report released on August 30. This amount includes all denominations.

On the other hand, an analysis of the data released by the RBI on the detection rate of fake notes of Rs 500 and Rs 1,000 denomination scrapped notes in a nationwide sample survey, also published in the annual report, suggests it was Rs 18.97 crore between November 8, 2016 and March 31, 2017. The third data point comes from a query answered in the Lok Sabha by the Minister of State for Finance on February 3, 2017, which put the value of fake notes detected after demonetisation at Rs 19.53 crore. This data point is for banned Rs 500 and Rs 1,000 notes.

Apart from these, the National Crime Records Bureau detected Rs 11.23 crore worth of fake currency notes across all denominations after demonetisation till July 14, 2017, according to a Parliament query.

SEE DOCUMENT HERE

Counterfeit Currency: Detection and Estimates

FICN estimates from RBI sample survey

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Demonetisation hit RBI's seigniorage, increased printing cost: SBI Research

Demonetisation has caused a net loss to the Reserve Bank of India's (RBI's) seigniorage -- the profit accruing from currency issuances and liquidity operations -- besides increasing the cost of printing notes, says an SBI Research report.

On November 8 last year, the government had banned old Rs 500 and Rs 1,000 notes in an attempt to weed out black money in the country. The old notes were allowed to be deposited in banks, with unusual deposits coming under income tax scrutiny.

"The demonetisation exercise has resulted in net loss of seigniorage to the RBI," SBI's research report Ecowrap said.

"In the current case, there is a seigniorage loss, as the face value of Rs 15.28 lakh crore (15.28 trillion) of Rs 17.10 lakh crore (17.1 trillion) has been printed," it said.

The report further said that "the cost of printing notes and coins has increased during this year".

In its Annual Report for 2016-17, RBI has said that post demonetisation, it has spent Rs 7,965 crore on printing new Rs 500 and Rs 2,000 and other denomination notes, more than double the Rs 3,421 crore spent in the previous year.

RBI to introduce Rs 200 note tomorrow, check out its key features

The new Rs 200 currency note will be introduced in the market tomorrow, Reserve Bank of India said on Thursday.

The new denomination has Motif of Sanchi Stupa on the reverse, with bright yellow being the base colour of the note, RBI said in a statement.

Along with the new Rs 200 note, the government has also confirmed a new Rs 50 note. The earlier Rs 50 notes will continue to remain legal tender.

"The Reserve Bank of India will issue on August 25, 2017 Rs 200 denomination banknotes in the Mahatma Gandhi (New) Series, bearing the signature of Urjit R Patel, Governor, RBI from select RBI offices, and some banks," it said.

Here are its salient features
Obverse (Front)
1. See through register with denominational numeral 200
2. Latent image with denominational numeral 200
3. Denominational numeral २०० in Devnagari
4. Portrait of Mahatma Gandhi at the centre
5. Micro letters ‘RBI’, ‘भारत’, ‘India’ and ‘200’
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