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RBI MPC meet: Status quo on rates likely as West Asia crisis deepens

The Reserve Bank is expected to leave the key policy rate unchanged at 5.25 per cent this week and adopt a cautious stance that factors in the possible headwinds to inflation and growth trajectory amid the West Asia turmoil, experts opined.With surging energy prices, continuing supply chain woes and a depreciating rupee, primarily driven by external challenges, some experts are of the view that the Reserve Bank of India (RBI) may raise its inflation forecast and lower its GDP growth estimate at its bi-monthly monetary policy meet from June 3 to 5.After three days of deliberations, the six-member Monetary Policy Committee (MPC), headed by RBI Governor Sanjay Malhotra, will announce its decision on June 5.In April, the Reserve Bank had kept its key policy rate unchanged, adopting a cautious wait-and-watch stance as policymakers assessed the fallout from the West Asia conflict on energy supplies, inflation and growth.A research report from the SBI's economic research department expe...

RBI exempts smaller NBFCs, creates structured exit route for first time

The Reserve Bank of India (RBI) on Wednesday issued final guidelines exempting non-banking financial companies (NBFCs) that do not avail of public funds, do not have a customer interface, and have assets of less than ?1,000 crore from the requirement to register with it. These NBFCs will be classified as “Unregistered Type I NBFCs”.Entities falling in this category will be exempt from registration requirements, provided they meet specified conditions, including operating a long-term business model without public funds or customer exposure. Boards must pass resolutions affirming compliance, while statutory auditors must certify the absence of public funds and customer interface.Existing NBFCs meeting these criteria have been given a one-time window to apply for deregistration by December 31, 2026 — introducing, for the first time, a structured exit route from the regulatory framework. Applications for deregistration must be made through the RBI’s PRAVAAH (Platform for Regulatory A...

RBI's rupee defence faces fresh pressure as capital inflows weaken

India’s efforts to steady the beleaguered rupee are likely to get harder in the coming months, as insufficient capital inflows replace speculative bets as the main pressure point.The Reserve Bank of India took aggressive steps recently to curb speculation, yet the currency fell to a record closing low on Wednesday. With the US-Iran war — now entering a third month — keeping oil prices elevated, and capital inflows muted, economists are widening their estimates of the nation’s balance of payment deficit.Kotak Mahindra Bank pegs the gap at $50 billion this fiscal year, versus deficits of $39 billion and $5 billion in the previous two years. IDFC First Bank sees it widening to $40 billion—$50 billion from an estimated $35 billion in the prior period. “The fundamental balance of payments picture continues to look weak, so the pressure on the rupee may persist,” said Rahul Bajoria, head of India economics research at BofA Securities India. “The RBI’s steps do provide relief, but we do...

RBI's short forward book hits $77 billion, highest since March 2025

The Reserve Bank of India’s outstanding net short dollar position in the rupee forward market rose to $77.25 billion by the end of February, the highest since March 2025, the latest data by the central bank showed. The net short position by the end of January stood at $68.42 billion.Short positions in less than one year remained unchanged at $28 billion, while those in longer-than-one-year tenures rose by around $9 billion to $49 billion.Of the $77 billion net short dollar position, $10.9 billion was in one-month contracts, $5.9 billion in one- to three-month tenures, $11.7 billion is set to mature between three months and a year, and the remaining $49 billion was in contracts of more than a year. -Business Standard 01 st April,2026

RBI defers acquisition financing, capital market norms to July 1

The Reserve Bank of India (RBI) late on Monday deferred the capital market exposure norms to July 1. These norms, which include acquisition financing guidelines, were scheduled to come into effect from April 1.RBI said it had received representations from banks, capital market intermediaries, and various industry associations seeking an extension of the effective date, and also flagging certain operational and interpretational issues for clarification."On a review, based on further discussions with the stakeholders, it has been decided to extend the effective date of the said Amendment Directions by three months to July 1, 2026," RBI said in a statement.Moreover, the regulator proposed a few changes while clarifying certain provisions relating to acquisition finance and exposures to capital market intermediaries. RBI said the definition of acquisition finance has been modified to include mergers and amalgamations. It also said acquisition finance may be extended only for ac...

GST mop-up rises 8.1% to ?1.83 trn in Feb on stronger import revenues

Gross GST collection increased by 8.1 per cent to over Rs 1.83 trillion in February, led by higher growth in revenues from imports and improved domestic sales.Gross domestic revenue rose 5.3 per cent to about Rs 1.36 trillion, while gross import revenue climbed 17.2 per cent to Rs 47,837 crore.Total refunds were up 10.2 per cent at Rs 22,595 crore.Total net Goods and Services Tax (GST) collection stood at over Rs 1.61 trillion, up 7.9 per cent year-on-year.Net cess revenue was Rs 5,063 crore, down from Rs 13,481 crore in February last year. GST rates on about 375 items were slashed, making goods cheaper, effective September 2025. Also, four tax slabs of 5, 12, 18 and 28 per cent were merged into two of 5 per cent and 18 per cent, with a highest 40 per cent slab for a select few ultra luxury goods and tobacco products.The GST collections had initially dipped in the first month of tax cut implementation, with revenues declining to Rs 1.70 trillion in November. The collection rose t...