Highlights of FSR- June 2016

The Reserve Bank of India released the Financial Stability Report (FSR) June 2016on 28th June 2016. The FSR reflects the overall assessment on the stability of India’s financial system and its resilience to risks emanating from global and domestic factors. This Report also discusses issues relating to development and regulation of the financial sector. This issue of FSR brings…

RBI’s MONETARY POLICY COMMITTEE : GOVERNOR’S ROLE REDUCED.

RBI’s MONETARY POLICY COMMITTEE : GOVERNOR’S ROLE REDUCED. 1. The Government has notified the formation of ” Monetary Policy Committee” (MPC) under the RBI. This committee will take decision on interest rate or Repo rate in a transparent manner in future. 2. MPC will bring significant changes in the power of the RBI Governor. 3.…

Rajan shielded Indian banks from a Lehman-like crisis. And how!

This article delibrates on the five measures taken by Mr. Rajan to prevent Indian Banks from facing Lehman like crisis:- Asset Quality review(AQR), Indradhanush, Bankruptcy Code, Sustainable structuring of stressed assets(S4A) & MCLR. S4A could limit fresh slippages to NPAs from large corporate exposures. The Indian Banks Balance sheets expected to be cleaned by March…

Inflation, Interest Rate and Raghuram Rajan’s Dosa Economics:-Nice article by Dr. Raghuram Rajan, RBI Governer

Nice article by Dr. Raghuram Rajan, RBI GovernerInflation, Interest Rate and Raghuram Rajan’s Dosa Economics:-Interest rates are always a source of conflict. Borrowers demand low rates. Fixed Depositors desire high rates.In such a scenario, what should RBI do?This was beautifully explained by the RBI Governor Dr.Raghuram Rajan with the example of Dosas.The basic premise of…

RBI’s second bi-monthly monetary policy 2016-17 highlights

Following are the highlights of RBI’s second bi-monthly monetary policy statement, 2016-17 Repo rate unchanged at 6.50 per cent, Reverse Repo at 6% * Cash reserve ratio or CRR unchanged at 4% Monetary policy to remain accommodative Pegs growth forecast at 7.6% for the current fiscal Inflation target kept unchanged at 5% for January 2017…

SIGNIFICANT PARAMATERS TO SHOW HOW STRONG A BANK IS

SIGNIFICANT PARAMATERS TO SHOW HOW STRONG A BANK IS SIGNIFICANT PARAMATERS TO SHOW HOW STRONG A BANK IS Net Interest Income There is no such thing as turnover or sales for banks. Instead, net interest margin is an indicator of bank’s performance; it is the difference between the income earned on lending and interest spent…

Negative Interest Rate

What is Negative Interest Rate?DEFINITION of ‘Negative Interest Rate Policy (NIRP)’ A negative interest rate policy (NIRP) is an unconventional monetary policy tool whereby nominal target interest rates are set with a negative value, below the theoretical lower bound of zero percent.A negative interest rate means the Central Bank and perhaps private banks will charge…