India’s retail inflation rate fell to 3.54% in July, dropping below the Reserve Bank of India’s 4% target for the first time in nearly five years. This decline was attributed to a decrease in food prices.
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The Indian rupee plummeted to a record low on Wednesday, driven by the unwinding of carry trades and increased dollar demand from importers. Despite intervention from the Reserve Bank of India, the rupee continues to face pressure from investors exiting carry trades that used the Chinese yuan and Japanese yen. Experts anticipate continued downward pressure on the rupee in the near term.
Raghuram Rajan, former Reserve Bank of India Governor, has refuted rumors of joining politics amidst the upcoming Lok Sabha Elections 2024. In an exclusive interview, Rajan emphasized his commitment to academic pursuits and assisting from the sidelines rather than pursuing an active political role.
The Reserve Bank of India (RBI) is expected to transfer a dividend to the Central government in FY25 that is in the same range or slightly more than the last fiscal (FY24). The Centre is also expected to receive a higher dividend from public sector banks (PSBs) in FY2025, as their profits have increased in FY24 compared to the previous year. PSBs reported profits of over 98,000 crore in the first three quarters of FY2024, which are likely to exceed 1.3 trillion by the end of the fiscal year. The dividend from the RBI is usually released to the Centre in May. During FY24, the government had pegged a 17% higher dividend at 48,000 crore from the RBI, PSBs, and financial institutions. However, this target was surpassed with the transfer of 87,416 crore as surplus to the Central government for FY2023 by the RBI, which was paid in May 2023 and accounted for in FY2024 by the government. The dividend payout from PSBs for FY24 has been around 15,000 crore.
Banks in India will remain closed for up to 14 days in May 2024 due to various holidays, including Sundays, second and fourth Saturdays, and state-specific observances.
The Reserve Bank of India (RBI) has imposed restrictions on Kotak Mahindra Bank, barring it from onboarding new customers and issuing fresh credit cards through its online and mobile banking channels. This action comes in response to significant concerns raised during RBI’s IT examination of the bank for 2022 and 2023. The bank has been found deficient in areas such as IT inventory management, data security, and business continuity planning, despite repeated corrective action plans issued by the RBI. Existing customers will continue to receive services, including credit card services.
Despite recent easing, inflationary pressures in India remain a concern due to potential disruptions caused by adverse weather conditions and ongoing geopolitical conflicts. Extreme weather events and volatility in crude oil prices could impact the country’s inflation trajectory, as highlighted by the Reserve Bank of India (RBI) in its monthly bulletin.