New Delhi:

The RBI on Friday asked banks to use only the ‘1600xx’ phone numbering series to call customers for transactional purposes with a view to preventing financial fraud.

It further said that for promotional purposes, banks and other regulated entities (REs) should use only the ‘140xx’ numbering series for the prevention of financial frauds perpetrated using voice calls and SMS.

Banks and other regulated entities (REs) have also been asked to monitor and clean their customer database.

The proliferation of digital transactions, while offering convenience and efficiency, has also led to a surge in frauds, a pressing concern underscoring the need for concerted action, said a Reserve Bank circular to REs.

The mobile number of a customer has emerged as a ubiquitous identifier, instrumental in the account authentication and verification process, receiving sensitive payment communication, such as OTPs, transaction alerts, and account updates.

“The mobile number, however, can also be misused by scamsters in multiple ways for committing various types of online and other frauds,” the circular said on ‘Prevention of financial frauds perpetrated using voice calls and SMS – Regulatory prescriptions and Institutional Safeguards’.

“Undertake transactional / service calls only using ‘1600xx’ numbering series, when operationalised; undertake promotional voice calls only through phone numbers using ‘140xx’ numbering series; follow the ‘Important Guidelines for sending commercial communication using telecom resources through Voice Calls or SMS’ issued by Telecom Regulatory Authority of India (TRAI),” it said.

The RBI asked the REs to utilise the Mobile Number Revocation List (MNRL) available on the Digital Intelligence Platform (DIP) developed by the Department of Telecommunications (DoT) and the Ministry of Communications to monitor and clean their customer database.

To enhance fraud risk monitoring and prevention, the REs have been asked to develop Standard Operating Procedures (SOP) incorporating the required action to be taken.

The required action to be taken includes updating the registered mobile number(RMN) after due verification, and enhanced monitoring of accounts linked to these revoked mobile numbers to prevent the linked accounts from being operated as Money Mules and/or being involved in cyber frauds, the circular said.

The Reserve Bank has asked all the REs to ensure compliance with the instructions expeditiously, in any case, not later than March 31, 2025.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Mumbai:

The Indian economy is recovering from the slowdown in momentum witnessed in the September quarter, driven by strong festival activity and a sustained upswing in rural demand, according to a Reserve Bank of India (RBI) bulletin released on Tuesday.

An article on the ‘State of the Economy’ in the December bulletin noted that the global economy continues to exhibit resilience with steady growth and moderating inflation.

“High frequency indicators (HFIs) for the third quarter of 2024-25 indicate that the Indian economy is recovering from the slowdown in momentum witnessed in Q2, driven by strong festival activity and a sustained upswing in rural demand,” it said.

The article further said the growth trajectory is poised to lift in the second half of 2024-25, driven mainly by resilient domestic private consumption demand.

“Supported by record level foodgrains production, rural demand, in particular, is gaining momentum. Sustained government spending on infrastructure is expected to further stimulate economic activity and investment,” the authors said.

Global headwinds, however, pose risks to the evolving outlook for growth and inflation, said the article authored by a team led by RBI Deputy Governor Michael Debabrata Patra.

India’s GDP growth slowed to a seven-quarter low of 5.4 per cent during the July-September period of the current fiscal year.

The article said that from the expenditure side, the major factor contributing to the decline in the growth rate of the economy is fixed capital formation and from the production side, the main concern is manufacturing.

“Undermining both is inflation. The erosion of purchasing power due to repeated inflation shocks and persisting price pressures is starkly reflected in weakening sales growth of listed non-financial nongovernment corporations,” it said.

Their outlook on demand conditions also remains subdued as no let-up in the incidence of price shocks seems to be in sight; they will increasingly be inclined to pass on input costs to selling prices.

Consequently, there is no robust capacity creation by investing in fixed assets. Instead, corporations are churning and utilising existing capacity to meet the inflation-dented consumer demand, the article said.

“The result is lacklustre private investment. The slowdown in consumer demand seems to be associated with slower corporate wage growth,” it said.

The authors further said another headwind emerging is the slowing rate of nominal GDP growth, which could hinder fiscal spending, including on capex, to achieve budgetary deficit and debt targets.

The article also noted that as per the projections based on the in-house Dynamic Stochastic General Equilibrium (DSGE), real GDP growth is likely to recover to 6.8 per cent and 6.5 per cent in Q3 and Q4 of 2024-25, respectively.

Growth for 2025-26 is projected at 6.7 per cent while headline CPI inflation (retail) is projected to average 3.8 per cent in 2025-26.

In the December monetary policy, the RBI had projected the GDP growth for 2024-25 at 6.6 per cent with Q3 at 6.8 per cent; and Q4 at 7.2 per cent. GDP growth for the April quarter of 2025-26 was projected at 6.9 per cent; and Q2 at 7.3 per cent.

The RBI said the views expressed in the bulletin are of the authors and do not represent the views of the central bank.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

The Reserve Bank has approved the open offer of Burman family — the promoters of FMCG major Dabur — to acquire an additional 26% stake in NBFC firm Religare Enterprises Ltd (REL).

The central bank also directed maintaining of the current board/management structure of REL.

The Reserve Bank of India (RBI) said it has granted its “approval for the proposed increase in shareholding of existing shareholders” — four Burman family entities Puran Associates, VIC Enterprises, M B Finmart, and Milky Investment & Trading Company — in Religare Enterprises Ltd (REL).

“The acquirers are advised to consolidate the NBFCs in the resulting structure/ group (both Burman and Religare group) at the earliest and not later than March 31, 2026,” the RBI said in a letter to Chairman of Religare Enterprises, a copy which was shared to the exchanges.

“The request for change of management/appointment of four proposed directors — Abhay Agarwal, Arjun Lamba, Ramanathan Gurumurthy, and Suresh Mahalingam does not have our approval at this stage,” it said.

It has “advised” REL to submit the names of the proposed directors, along with the board resolution, after ensuring that they are “fit and proper”.

The Burman family — a promoter of Dabur India and other entities such as Eveready Industries — through its entities, had in September last year announced a ₹2,116-crore open offer to REL shareholders to acquire up to 26% stake in the company.

However, it has been contested by REL independent directors, who raised red flags alleging fraud and other breaches by Burman family entities and approached regulators, including markets regulator Sebi, the RBI and the Insurance Regulatory and Development Authority.

Burmans’ are yet to receive a go-ahead from Sebi over its proposed open offer.

The RBI has advised Burmans “to submit a concrete and specific consolidation plan, with specific timelines, duly supported by board resolutions from each of the NBFCs within the groups, within 90 days from the date of this communication”.

It has also directed that it has to be informed about the date on which the Burmans acquired 26% or more of the paid-up share capital of the NBFC.

The Reserve Bank further said if after the open offer, Burmans’ shareholding in the REL “falls below 26%, prior approval of RBI will be required to increase the shareholding of the acquirers in the NBFC to 26% or more”.

As of September 30, 2024, Burmans, through its four entities, collectively own a 25.12% stake in REL.

Shares of Religare Enterprises Ltd were trading at ₹287.75 on the BSE, up 3.66% from the previous close.

At the interbank foreign exchange, the rupee opened at 84.70 against the greenback, then touched 84.73 in the initial trade, registering a fall of 7 paise over its previous close. Representational image.

The rupee fell 7 paise to trade at 84.73 against the U.S. dollar in early trade on Monday (December 9, 2024) dragged down by foreign fund outflows and a muted trend in domestic equities.

Forex traders said the rupee remains in a weakening mode due to dollar demand from importers and foreign banks.

At the interbank foreign exchange, the rupee opened at 84.70 against the greenback, then touched 84.73 in the initial trade, registering a fall of 7 paise over its previous close.

On Friday (December 5, 2024), the rupee appreciated by 5 paise to settle at 84.66 against the U.S. dollar.

“On the domestic front, all eyes will be on Industrial Production (IIP) and CPI data following last week’s RBI monetary policy announcement. The 50-basis point CRR cut provided much-needed liquidity and lent support to the Rupee,” CR Forex Advisors MD Amit Pabari said.

The Reserve Bank of India on Friday kept its key interest rate unchanged citing inflation risks, but cut the Cash Reserve Ratio that banks are required to park with the central bank, boosting money with lenders to support a slowing economy.

Mr. Pabari further said that a wave of IPO activity is expected to drive substantial inflows, offering additional support to the rupee.

“We anticipate the rupee’s downside to remain limited, with the USDINR pair likely to trade in a range of 84.50 to 85 in the near term,” Mr. Pabari added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.08 per cent at 106.14.

Brent crude, the global oil benchmark, rose 0.08 per cent to USD 106.15 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex was trading 76.29 points or 0.09 per cent down at 81,632.83 points in morning trade, while Nifty was down 24.20 points or 0.1 per cent to 24,653.60 points.

Foreign Institutional Investors (FIIs) offloaded Rs 1,830.31 crore in the capital markets on net basis on Friday, according to exchange data.

Meanwhile, India’s forex reserves increased by USD 1.51 billion to USD 658.091 billion for the week ended November 29, the RBI said on Friday. The overall reserves had dropped by USD 1.31 billion to USD 656.582 billion in the previous reporting week.

Mumbai:

The Reserve Bank of India (RBI) has directed banks to take immediate steps to reduce the number of inoperative or frozen accounts and to make the activation process smoother and more hassle-free.

To achieve this, the RBI has advised banks to organize special campaigns focused on activating inoperative or frozen accounts.

Additionally, banks have been encouraged to facilitate Aadhaar updates for customers at branches that provide Aadhaar-related services. This initiative aims to assist account holders, particularly those from underprivileged sections of society, in reactivating their accounts with ease.

RBI said “The banks may also organise special campaigns for facilitating activation of inoperative/ frozen accounts. Besides, the banks may also facilitate Aadhaar updation for customers through the branches providing Aadhaar related services”.

It has also given separate instructions to State Level Bankers’ Committees (SLBCs) to proactively monitor the situation in their respective regions to minimize customer inconvenience.

Highlighting the importance of this measure, the RBI noted that many frozen or inoperative accounts belong to people from economically weaker sections.

The central bank urged banks to adopt an empathetic approach in handling such cases, ensuring that the process is simplified for these customers.

It added “the process of activation of such accounts smoother and hassle free, including by enabling seamless updation of KYC through mobile/internet banking, non-home branches, Video Customer Identification Process, etc”.

Furthermore, the RBI pointed out instances where accounts of beneficiaries under government schemes like Direct Benefit Transfer (DBT) or Electronic Benefit Transfer (EBT) were frozen due to pending or periodic KYC updates.

The central bank has instructed banks to segregate these accounts and ensure uninterrupted credit of DBT/EBT funds while addressing KYC-related issues efficiently.

These steps are part of RBI’s broader efforts to improve financial inclusion and reduce barriers for marginalized sections of society in accessing banking services. Banks have been urged to act urgently and ensure customer convenience in resolving account-related issues.

Unclaimed deposits in banks saw a significant increase of 26 per cent year-on-year, reaching Rs 78,213 crore by the end of March 2024.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

The RBI indicated that the interest rates offered by the Union government on two of India’s most popular small savings schemes continue to languish below the rates they should have earned as per a formula-based system adopted since April 2016. File
| Photo Credit: Reuters

The interest rates offered by the Union government on two of India’s most popular small savings schemes — the Public Provident Fund and five-year recurring deposits — continue to languish below the rates they should have earned as per a formula-based system adopted since April 2016, the Reserve Bank of India (RBI) has indicated.

The PPF rate has been static at 7.1% since April 2020. The return on the five-year recurring deposit (RD), which had been frozen at 5.8% from April 2020 to March 2023, had been hiked gradually over the first three quarters of 2023-24, taking it to 6.7% by last October.

At the time, the RBI had reckoned that the returns on the PPF were 41 basis points (bps) lower than their formula-based rates, while the five-year RD rate was 21 bps lower, for the October to December 2023 quarter. One basis point equals 0.01%.

RBI formula

The formula for quarterly resets of small savings rates, mooted by a panel led by former RBI Deputy Governor Shyamala Gopinath, links them to secondary market yields on government securities of comparable maturities over a three-month period prior to each quarter.

The PPF rate was last hiked in October 2018, when it was pegged at 8% ahead of the 2019 Lok Sabha election. After that poll, the government had reduced the rate to 7.9% from July 2019, and slashed it further to 7.1% at the onset of 2020-21, when it cut rates on all small savings instruments in the range of 0.5 and 1.4 percentage points (or 50 to 140 bps).

Prior to the 2024 Lok Sabha election, the Union government announced a hike in rates on most small savings schemes for six successive quarters, culminating in the January to March 2024 quarter, when the returns on the Sukanya Samriddhi Account Scheme (SSAS) were raised from 8% to 8.2%, and the three-year time deposit from 7% to 7.1%. While there have been no changes effected in rates since, the PPF rate has been excluded from the ambit of all these hikes.

Tax-free scheme

“The Government of India kept rates on small savings schemes unchanged for Q2:2024-25 [July to September 2024]. Rates on various schemes are now aligned with the formula-based rates except for public provident funds and five-year recurring deposits,” the RBI noted, in its latest monetary policy report released as part of its monthly bulletin last week. Unlike last October, the RBI has not quantified the gap between the formula-based rate and the PPF and five-year RD rates.

The Finance Ministry has generally defended the stasis in PPF rates by emphasising that the returns on the scheme are tax-free so tax-adjusted returns are higher. But the same tax treatment is also offered on the SSAS, which was launched in 2015. The SSAS rate was frozen at 7.6% from April 2020 to March 2023, but was raised to 8% last April and 8.2% from this January.

The Reserve Bank of India approved a ₹2.11 lakh crore dividend payout to the central government for 2023-24.
| Photo Credit: Reuters

The Reserve Bank of India (RBI) on May 22 approved a ₹2.11 lakh crore dividend payout to the central government for 2023-24, more than double the amount it paid for the previous 2022-23 financial year.

The decision was taken at the 608th meeting of the Central Board of Directors of the Reserve Bank of India held under the chairmanship of Governor Shaktikanta Das.

“The Board…approved the transfer of ₹2,10,874 crore as surplus to the Central Government for the accounting year 2023-24,” RBI said in a statement.

The dividend payout was ₹87,416 crore for 2022-23.

“With the revival in economic growth in FY 2022-23, the Contingent Risk Buffer (CRB) was increased to 6%. As the economy remains robust and resilient, the Board has decided to increase the CRB to 6.5% for FY 2023-24,” the RBI said.

Analysts had expected a surplus transfer in the range of 750 billion rupees to 1.2 trillion rupees, aided by strong foreign exchange earnings.

Also Read | The state of the Indian economy today

The benchmark 10-year bond yield dropped four basis points to 7% after the announcement.

The board reviewed the global and domestic economic scenario, including risks to the outlook, the statement added.

Image for representation
| Photo Credit: Reuters

The Reserve Bank of India (RBI) has decided to facilitate wider non-resident participation in the Sovereign Green Bonds by permitting eligible foreign investors in the International Financial Services Centre (IFSC) to invest in such bonds.

“A scheme for investment and trading in SGrBs by eligible foreign investors in IFSC is being notified separately in consultation with the Government and the IFSC Authority,” Governor Shaktikanta Das announced as additional measures soon after the bi-monthly monetary policy committee meeting on April 5, 2024.

ALSO READ | RBI Monetary Policy LIVE updates

Based on an announcement in the Union Budget for FY 2022-23, the Government of India had issued Sovereign Green Bonds in January 2023. The SGrBs were also issued as part of the Government borrowing calendar in FY 2023-24.

At present, foreign portfolio investors (FPIs) registered with SEBI are permitted to invest in SGrBs under the different routes available for investment by FPIs in government securities.

Image for representation only
| Photo Credit: C. Venkatachalapathy

The Reserve Bank of India has proposed to facilitate cash deposit facility in banks through the use of UPI, an instant real-time payment system for inter-bank transactions through mobile phones.

ALSO READ | RBI Monetary Policy LIVE updates 

“Given the popularity and acceptance of UPI, as also the benefits seen from the availability of UPI for cardless cash withdrawal at ATMs, it is now proposed to facilitate cash deposit facility through use of UPI,” RBI Governor Shaktikanta Das said in the Monetary Policy Statement, released on April 5, 2024.

The Cash Deposit Machines (CDMs) deployed by banks enhance customer convenience while reducing cash-handling load on bank branches. The facility of cash deposit is presently available only through use of debit cards.

Operational instructions regarding cash deposits using UPI will be issued shortly, according to the central bank.

RBI to permit linking PPIs with UPI apps

The RBI has also proposed to permit linking of Prepaid Payment Instruments (PPIs) through third-party UPI applications to provide more flexibility to users.

At present, UPI payments from bank accounts can be made by linking a bank account through the UPI app of the bank or using any third-party UPI application. However, the same facility is not available for PPIs.

PPIs can currently be used to make UPI transactions only by using the application provided by the PPI issuer.

“To provide more flexibility to PPI holders, it is now proposed to permit linking of PPIs through third-party UPI applications. This will enable the PPI holders to make UPI payments like bank account holders,” the RBI said.

Instructions in this regard too will be issued shortly.

The Monetary Policy Committee (MPC) on April 5 decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50%. This is the 7th time that the rates have been kept on hold.

The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.

Also read: RBI Monetary Policy live updates – April 5

 “These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth,” RBI governor Shaktikanta Das announced after the MPC meeting. 

Stating that the domestic economy was experiencing strong momentum, he said as per the second advance estimates (SAE), real gross domestic product (GDP) expanded at 7.6% in 2023-24 on the back of buoyant domestic demand. 

“Real GDP increased by 8.4% in Q3, with strong investment activity and a lower drag from net external demand. On the supply side, gross value added recorded a growth of 6.9 per cent in 2023-24, driven by manufacturing and construction activity,” he said.

Looking ahead, Mr. Das said, an expected normal south-west monsoon should support agricultural activity. “Manufacturing is expected to maintain its momentum on the back of sustained profitability. Services activity is likely to grow above the pre-pandemic trend,” he said.

“Private consumption should gain steam with further pick-up in rural activity and steady urban demand. A rise in discretionary spending expected by urban households, as per the Reserve Bank’s consumer survey, and improving income levels augur well for the strengthening of private consumption,” he added. 

“The prospects of fixed investment remain bright with business optimism, healthy corporate and bank balance sheets, robust government capital expenditure and signs of upturn in the private capex cycle,” he further said. The Governor said headwinds from geopolitical tensions, volatility in international financial markets, geo-economic fragmentation, rising Red Sea disruptions, and extreme weather events, however, pose risks to the outlook. 

“Taking all these factors into consideration, real GDP growth for 2024-25 is projected at 7.0% with Q1 at 7.1%; Q2 at 6.9%; Q3 at 7.0%; and Q4 at 7.0%. The risks are evenly balanced.”

On inflation the Governor said “Two years ago, around this time, when CPI inflation had peaked at 7.8% in April 2022, the elephant in the room was inflation. The elephant has now gone out for a walk and appears to be returning to the forest. We would like the elephant to return to the forest and remain there on a durable basis.”

“In other words, it is essential, in the best interest of the economy, that CPI inflation continues to moderate and aligns to the target on a durable basis. Till this is achieved, our task remains unfinished,” he added

He said the headline softened to 5.1% during January-February 2024, from 5.7% in December. After correcting in January, food inflation edged up to 7.8% in February primarily driven by vegetables, eggs, meat and fish. 

Fuel prices remained in deflation for the sixth consecutive month in February. CPI core (CPI excluding food and fuel) disinflation took it down to 3.4% in February — this was one of the lowest in the current CPI series, with both goods and services components registering a fall in inflation, he said. He said going ahead, food price uncertainties would continue to weigh on the inflation outlook. An expected record rabi wheat production in 2023-24, however, will help contain cereal prices. Early indications of a normal monsoon also augur well for the kharif season. 

“On the other hand, the increasing incidence of climate shocks remains a key upside risk to food prices. Low reservoir levels, especially in the southern states and outlook of above normal temperatures during April-June, also pose concern. Tight demand supply conditions in certain pulses and the prices of key vegetables need close monitoring,” he said. 

“Fuel price deflation is likely to deepen in the near term following the recent cut in LPG prices. After witnessing sustained moderation, cost push pressures faced by firms are showing upward bias. The recent firming up of international crude oil prices warrants close monitoring. Geo-political tensions and volatility in financial markets also pose risks to the inflation outlook,” he added. 

“Taking into account these factors and assuming a normal monsoon, CPI inflation for 2024-25 is projected at 4.5% with Q1 at 4.9%; Q2 at 3.8%; Q3 at 4.6%; and Q4 at 4.5%. The risks are evenly balanced. 

The MPC also noted that domestic economic activity remains resilient, backed by strong investment demand and upbeat business and consumer sentiments. Headline inflation has come off the December peak; however, food price pressures have been interrupting the ongoing disinflation process, posing challenges for the final descent of inflation to the target. Unpredictable supply side shocks from adverse climate events and their impact on agricultural production as also geo-political tensions and spillovers to trade and commodity markets add uncertainties to the outlook, Mr Das said. 

“As the path of disinflation needs to be sustained till inflation reaches the 4% target on a durable basis, the MPC decided to keep the policy repo rate unchanged at 6.50% in this meeting,” he added. 

Stating that monetary policy must continue to be actively disinflationary to ensure anchoring of inflation expectations and fuller transmission, he said the MPC would remain resolute in its commitment to aligning inflation to the target. 

“The MPC believes that durable price stability would set strong foundations for a period of high growth. The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth,” he said.