RBI

Inflation rises to over nine-month high at 5.11 per cent

Reserve Bank of IndiaNew Delhi, Mar 14: Inflation rose to over nine-month high at 5.11 per cent for the week ended March 1, due to rise in prices of some manufactured items and aviation turbine fuel, dashing all hopes of interest rate cuts by the RBI to boost the sagging industrial production.

The wholesale price index-based inflation rate stood at 5.02 per cent in the previous week and 6.51 per cent in the correspondingly week a year earlier.

This is the second week in a row that the inflation rate crossed the five per cent mark, the target set by the reserve bank for this fiscal.

ATM Use Will Become Free From April 2009, Says RBI

By April 2009, the customers will be capable of withdrawing money from ATM without paying any ATM Use Will Become Free From April 2009charge.

The Reserve Bank of India has directed the commercial banks to let customers’ free use of Automated Teller Machines (ATMs) for all transactions from 1 April 2009.

According to an RBI announcement, the customers can also use ATMs of other banks for balance enquiries free of cost.

The RBI has also asked banks to put a limit on the fees charged for using ATMs of other banks to Rs 20 for each transaction from March 31, 2008, and eradicate the same from April 2009.

RBI plans to permit FIIs to short sell, lend and borrow equity shares from 1st Feb, 08

RBIThe Reserve Bank of India (RBI) plans to permit Foreign Institutional Investors (FIIs) registered with market regulator SEBI and sub-accounts of FIIs to short sell, lend and borrow equity shares of India companies from February 1, 2008.

However, the entire FII short selling, lending and borrowing mechanism will be subject to the current FDI policy, which allows FDI ranging from 26% to 100% across different sectors.

RBI said in a notification on its web site that the short selling of equity shares by FIIs shall not be permitted for equity shares that are in the ban list and /or caution list of Central Bank.

RBI Finally Tighten Banks’ Capital Market Exposure

RBIReserve Bank of India (RBI) has finally tightened banks’ capital market exposure by implementing new rules and regulations.

In a circular, RBI has told that entities such as FIIs are not permitted to avail of fund or non-fund based facilities such as irrevocable payment commitments (IPCs) from banks, under the provisions of the Foreign Exchange Management Act (FEMA). The banks have been asked to unwind all such guarantees given on behalf of FIIs within six months.

RBI’s Restriction On Foreign Venture Capital Funds

RBIMumbai: The central bank (RBI) has specified that the foreign venture capital (VC) funds those kick in a part of the investment upfront, will get entry to Indian markets.

The condition laid down by RBI is related to some credible capital obligation before obtaining a formal registration.

Typically, a new foreign venture capital fund first forms an investment holding company in Mauritius with rudimentary capital, often not more than a few dollars. The investment company then files for registration with Indian regulators, and once it gets the approval overseas investors are gradually roped in.

Now RBI’s CRR @ 7.5%

Mumbai: The Indian central bank (RBI) has annihilated the anticipations of interest rates alleviation by raising CRR, the sum of money banks must hold in cash, by 0.5 percent (now 7.5%) to drain liquidity regardless of inflation at a five-year low.
But the RBI do not make any changes in the key lending and borrowing rates (repo and reverse repo) and bank rate in the mid-term appraisal of the monetary plan.
Cash Reserve Ratio (CRR) is the amount of cash that is demanded by the banks to park with RBI that does not pay up any interest on such depositions.




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