CA Online

Asset quality is holding up in the micro, small, and medium enterprises (MSME) segment, but there are nascent signs of stress visible in micro enterprises, and the retail loan segment needs close monitoring, the Reserve Bank of India’s Financial Stability Report has noted.“In the MSME segment, while some nascent stress is visible in micro enterprises, the overall gross NPA ratio has shown improvement,” the report said, stressing that overall asset quality remains benign amid above-average loan growth in the MSME and retail segments.Household debt continued to rise, reaching 45.5 per cent of gross domestic product (GDP) at the end of September 2025.The increase was driven mainly by non-housing retail loans, which accounted for 58.4 per cent of total household borrowings as of March 2026. Borrowings for consumption purposes constituted nearly half of household debt, followed by loans for productive purposes, while loans for asset creation grew at a slower pace.Although gross NPA ratios i...

On July 1, the Goods and Services Tax (GST) will enter its tenth year. Over the past nine years, the GST Council has emerged as one of the country's most important tax policymaking bodies, deciding everything from rate cuts on essential goods to exemptions for key sectors.Here's a look at how proposals to change GST rates move through committees, negotiations and constitutional processes before they are officially notified. Who can propose a GST rate change? Unlike many other tax proposals, suggestions to revise GST rates can come from multiple sources. Industry associations, companies, state governments, central ministries, tax authorities and even judicial rulings can trigger a review of an existing GST rate or product classification.Businesses and trade bodies frequently submit representations seeking lower tax rates, exemptions or clarification on classification disputes. State governments can also recommend changes based on local industry concerns or revenue considerations...

  The Reserve Bank of India (RBI) will estimate the natural real rate of interest and potential gross domestic product (GDP) growth as part of its efforts to strengthen macroeconomic forecasting and policy analysis, according to the central bank’s annual report released on Friday.The RBI said the department’s goals for 2026-27 include improving GDP growth and inflation forecasting, assessing sectoral deployment of credit, including non-bank sources, estimating the natural real rate of interest and potential GDP growth, and reviewing the quarterly projection model.“During 2026-27, the Department will focus on strengthening macroeconomic forecasting and policy analysis. Accordingly, the Department has set the following goals: reviewing and improving GDP growth forecasting; reviewing and improving inflation forecasting; sectoral deployment of credit to include non-bank sources; estimating the natural real rate of interest; estimating potential GDP and its growth rate; and reviewing th...

  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...

  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...

  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...

  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