Budget 2018-19

  The Reserve Bank of India will aim to drain 2 trillion rupees ($27.3 billion) of banking funds via a 14-day reverse repo operation on Jan. 15 Finance News : India’s key money-market rates and yields on short-term debt are set to rise after the central bank took its first small step to unwind emergency pandemic measures. The Reserve Bank of India will aim to drain 2 trillion rupees ($27.3 billion) of banking funds via a 14-day reverse repo operation on Jan. 15, the central bank said in a statement late Friday. This is the first move in a phased normalization of the central bank’s liquidity operations, it said. There has been growing consensus among traders that the RBI will have to start draining excess cash, as surging liquidity caused money-market rates to drop below the central bank’s interest-rate corridor and distort asset pricing. Quantum Asset Management Ltd. and IDFC Asset Management Ltd. have been among those forecasting that short-end rates will rise faster than the long...

Canara, Union Bank, PNB among possible candidates; may lead to recall of Rs 157-bn AT-1 bonds Five public sector banks (PSBs), including Canara and Union Bank of India, are on the brink of being put under the Reserve Bank of India’s (RBI’s) prompt corrective action (PCA) plan. According to rating agency Icra, their net non-performing assets (NPAs) rose above 6 per cent in December 2017. If the banking regulator places them under PCA, the action may drive these banks to recall additional tier-1 (AT-1) bonds, which is included in Tier-1 capital, of Rs 157 billion from investors. Besides Canara and Union Bank, three other PSBs that may come under PCA are Andhra Bank, Punjab National Bank, and Punjab & Sind Bank. While taking the decision on putting a bank under PCA, the RBI assesses its standing on three counts, namely capital adequacy ratio (CAR), net NPAs, and return on assets (RoA). Banks become PCA candidates when they feel the minimum requirements of CAR ...