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The retail loan growth declined to 16.6 per cent year-on-year (YoY) in June 2024 from 21.3 per cent a year ago, largely due to sharp moderation in credit in the personal loan segment.Reserve Bank of India (RBI) data showed that growth in the other personal loan category, which consists mainly of unsecured credit, fell sharply to 13.2 per cent YoY in June 2024 from 28.4 per cent in June 2023.However, credit growth to ‘housing,’ the largest constituent of the segment, accelerated to 18.2 per cent YoY from 14.8 per cent YoY. The credit growth numbers exclude the impact of the merger of HDFC with HDFC Bank.The RBI in its statement said non-food credit grew by 13.9 per cent in June 2024, down from 16.3 per cent in June 2023. Credit to industry inched up to 7.7 per cent YoY in June 2024 compared with 7.4 per cent a year ago. There was a slight improvement in credit to large industries at 6.9 per cent in June 2024 from 5.4 per cent a year ago.   Among major industries, while YoY growth in...

  Axis Bank may have cleaned up its bad loans and reoriented the business, but it has a long way to go in terms of market share and dominance in various segments, says chief executive Amitabh Chaudhry. The Reserve Bank of India would only tighten and not loosen regulations given the threats from technology and weak lending practices, Chaudhry tells ET. Edited excerpts:   Interest rates are debated widely and even two members of the Monetary Policy Committee are voting for a cut. How do you see this? I think the pause will continue for some time. The RBI has actually floated a balloon looking at an 8% GDP growth rate. They believe that if 8% GDP growth can be delivered, they would like to attack inflation and get it down to 4%. And if that is the case, then why will they cut rates? So, I don't see any reason why cutting rates would happen in a hurry. And once you're down the path of cutting rates, you don't want to kind of go back up. So, you have to be sure that when you st...

  “Why should we say that once you are listed you can never leave. This isn’t Hotel California. This is a rich, vibrant market. We welcome people, but if for some reason they need to exit, they must be able to” Sebi chairperson Madhabi Puri Buch said this week. And why shouldn't we all agree with this very welcome statement. Over the years, our capital markets have undergone a substantial evolution and transformation. This evolution encompasses technological advancements, regulatory changes, as well as the expansion of market depth and engagement. The maturity of a market is exemplified by the smooth entry and exit experience it provides to investors and issuers alike. This week not only did we overcome a 17 year wait to get into the World Cup final, but we also overcame a waiting period of 19 years to gain freedom from RBB mechanism for delisting of a company. In our views of January 2020 titled ‘Our expectations from Budget 2020’, we had advocated for the removal of RBB process f...

Individuals, companies and other taxpayers have to file income tax returns (ITRs) every financial year to inform the government of the income earned by them and the tax they have paid on this income.While taxpayers have to file their tax returns within a deadline to avoid paying a penalty and to avoid losing certain income tax benefits, the last date or the due date for filing ITR varies depending on the category of the taxpayer. For instance, salaried individuals and other taxpayers whose accounts are not required to be audited must file ITRs by July 31. Similarly, taxpayers whose books of accounts are required to be audited (but transfer pricing not applicable) must file their ITR by October 31. Source: RSM India. *Report under section 92E is required to be submitted when a taxpayer has undertaken international transactions during the relevant financial year. The biggest consequence of missing the deadline to file an income tax return is the levy of penalty. Apart from paying a late ...

  The Reserve Bank of India on Tuesday updated its "guidance note" on operational risk management for the financial sector, and also extended it to the NBFCs, including housing finance companies. The 2005 'Guidance Note on Management of Operational Risk' covered only commercial banks.The Reserve Bank of India (RBI) said an operational disruption can threaten the viability of a regulated entity (RE), impact its customers and other market participants, and ultimately have an impact on financial stability. It can result from man-made causes, Information Technology (IT) threats, geopolitical conflicts, business disruptions, internal/external frauds, execution/delivery errors, third-party dependencies, or natural causes. The latest 'Guidance Note on Operational Risk Management and Operational Resilience' aligns with the RBI's regulatory guidance with the Basel Committee on Banking Supervision (BCBS) Principles, the central bank said. The guidance note intends t...

Sebi board on Tuesday decided to amend norms governing mutual funds, whereby asset management companies (AMCs) need to put in place an "institutional mechanism" for identification and deterrence of potential market abuse, including front-running and fraudulent transactions in securities. The mechanism should consist of enhanced surveillance systems, internal control procedures, and escalation processes to identify, monitor and address specific types of misconduct, including front running, insider trading, and misuse of sensitive information, Sebi said in a statement issued after the conclusion of the board meeting. With a view to address the issues faced by venture capital funds (VCFs) registered under the erstwhile VCF norms with respect to their inability to fully liquidate the investments of their schemes within the tenure of the scheme, the Sebi's board has approved a proposal to provide an option to such VCFs to migrate into AIF (Alternative Investment Fund) rules an...

The Reserve Bank of India (RBI) has cautioned banks about gold loan disbursals being made through fintech startups, according to people familiar with the matter. The central bank has flagged “concerns with the evaluation process” by these banks and fintechs, especially in cases where the gold is sourced through field agents of companies, one of the persons said. “The regulator has verbally expressed its concerns to a set of banks regarding this and asked them to take corrective actions immediately,” said another person. Rupeek, IndiaGold and Oro Money are a few of the major players that source gold loans for banks. Cautioned banks are in conversations with fintech firms for fixing these issues and could explore pausing business temporarily to ensure complete compliance, the people said. ‘Possible Overvaluation’ Sumit Maniyar, cofounder of Rupeek, which is backed by Peak XV Partners and Accel, said he has not received any communication from his company’s banking partners on this. “RBI h...

Traditionally, all mutual funds, including passive funds, were restricted from investing more than 25 per cent  of their assets in companies belonging to the same group as the fund manager (called the sponsor group). This rule aimed to prevent conflicts of interest and ensure diversification within mutual funds. Passive funds, unlike actively managed funds, track a specific index. Their goal is to mirror the performance of that index as closely as possible. Some sectoral or thematic indexes (focusing on specific sectors or themes) might have a high weighting (importance) for companies within the sponsor group. This weighting could exceed the 25 per cent limit imposed on traditional mutual funds.As a result, passive funds were often unable to perfectly replicate the target index, potentially leading to tracking errors and a slight underperformance compared to the benchmark. For example, ABC Nifty 50 Index Fund cannot invest more than 25% of its NAV in ABC Bank and ABC Life Insurance...

The Securities and Exchange Board of India (Sebi) on Tuesday allowed non-resident Indians (NRIs) to own up to 100 per cent in global funds at the GIFT City and gave passive funds more exposure to group companies.Currently, NRIs and Overseas Citizens of India (OCIs) cannot own more than 50 per cent in a foreign portfolio investor (FPI). The move could pave the way for greater flows from the Indian diaspora into the domestic stocks. “A 100 per cent contribution limit shall be available subject to the FPI submitting copies of Permanent Account Number (PAN) cards of all their NRI/OCI individual constituents, along with their economic interest in the FPI,” the markets regulator said.Market experts believe a more liberalised regime for NRI/OCIs could lead to twin benefits — boost the fund ecosystem at the GIFT City as well as attract genuine flows from overseas Indians. At present, the combined holdings of NRIs and OCIs in a global fund must be less than 50 per cent, while that of a single N...

  India’s central bank today left its inflation forecast for this fiscal year unchanged at 4.5% assuming normal monsoon, even as the country braces for a scorching summer amid a spike in crude oil prices and persisting worries about supply chain due to the Red Sea crisis. However, RBI Governor and MPC Chair Shaktikanta Das two years ago elephant in the room was inflation, which has now has gone out for a walk to the forest. The Reserve Bank of India's (RBI) Monetary Policy Committee with a five-to-one majority decided to keep the repo rate- key lending rate- unchanged at 6.5% for the seventh time in a row. The rate-setting panel also left the policy stance unchanged with focus on withdrawal of accommodation. "Inflation (for global economies) is moving closer to targets but the last mile is turning out to be challenging," said while announcing the policy decisions. Robust growth prospects provide policy space to remain focused on bringing inflation to 4% target, he said. T...

  Indian government bond yields are expected to open flattish on Friday as market participants await the Reserve Bank of India's first monetary policy decision of this financial year for guidance on the trajectory of interest rates. The yield on the benchmark 10-year is likely to trade in a 7.08 per cent-7.11 per cent range till the policy decision at 10:00 a.m. IST, a trader with a private bank said. The yield closed at 7.0934 per cent on Thursday. "For now, the market will ignore all other factors and will solely focus on the tone that the Reserve Bank of India Governor Shaktikanta Das adopts at the monetary policy and in the first hour, we should see sideway moves," the trader said. The market is not expecting any change in rates for now as strong economic growth and moderating inflation means the central bank will have room to keep rates on hold likely until July, economists have said. At the previous meeting, Das had stressed that they may consider rate cuts only onc...