Tag: RBI

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Beyond

Rupee rises to 92.86 against US dollar

The Indian rupee strengthened in early trade on Friday, gaining around 25–28 paise to touch 92.86 against the US dollar, as supportive measures from the Reserve Bank of India (RBI) helped ease demand pressure in the foreign exchange market.

The gain came after the RBI reportedly introduced a special dollar access window for state-run oil marketing companies. Instead of directly buying dollars from the spot market, firms like Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum can now source foreign currency through a structured credit arrangement. This is aimed at reducing sudden spikes in dollar demand.

Traders said this step helped calm sentiment in the currency market by lowering immediate pressure from one of the biggest sources of dollar buying in India. As a result, the rupee opened stronger and held onto gains in early deals.

Sentiment was also mildly supported by stable domestic equity markets and slightly improved global risk appetite. However, gains were limited as the US dollar remained firm globally, keeping emerging market currencies under some pressure.

Market participants noted that the RBI’s move is not about fixing a level for the rupee, but about reducing volatility and ensuring smoother forex market functioning. By spreading out dollar demand, the central bank aims to prevent sharp swings in the currency.

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Beyond

RBI proposes kill switch, delays for UPI payments

The Reserve Bank of India (RBI) has proposed new measures to reduce digital payment fraud, including a “kill switch” and a short delay for higher-value transactions.

Under the plan, payments above ₹10,000 made via UPI, IMPS, NEFT, RTGS, wallets, and net banking could be delayed by up to one hour. This cooling period would allow banks or users to detect suspicious activity and stop fraudulent transfers before they are completed.

The RBI has also suggested a “kill switch” feature that would let customers instantly disable all digital payment services linked to their bank account. This would block transactions across cards, UPI, and internet banking until reactivated through strict verification.

The measures aim to address rising cases of online fraud, especially scams where users are tricked into authorising payments themselves. The central bank says the speed of digital transactions, while convenient, has made it harder to prevent fraud in real time.

The proposals are part of wider efforts to strengthen safeguards across India’s fast-growing digital payments ecosystem while balancing speed with security.

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Beyond

RBI plans simpler rules for large NBFCs

The Reserve Bank of India (RBI) has proposed a simpler way to identify and regulate large non-banking financial companies (NBFCs), in a move aimed at improving clarity and strengthening oversight.

In a draft framework released for public feedback, the RBI has suggested that NBFCs with assets of ₹1 lakh crore or more should automatically be placed in the “upper layer.” These are the biggest and most systemically important firms, and they are subject to tighter regulations.

Right now, NBFCs are classified using a mix of factors such as size, risk level and their connections with other financial institutions. This system can be complex and difficult to follow. By introducing a clear asset-based threshold, the RBI hopes to make the process more straightforward and transparent.

Another important change proposed is treating government-owned NBFCs the same as private ones. Until now, many state-run NBFCs were placed in lower regulatory categories. The RBI’s new approach removes this distinction, ensuring that any company—public or private—that meets the size requirement will face the same level of scrutiny.

This shift could bring more large NBFCs under stricter supervision. Companies classified in the upper layer are expected to follow tighter governance norms, improve risk management practices, and may also face requirements such as listing on stock exchanges.

The proposal could impact several large financial entities and corporate groups, potentially increasing compliance responsibilities for them. However, regulators believe this is necessary to maintain stability in the financial system, especially as NBFCs play a growing role in lending and financial services.

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Beyond

RBI keeps Repo rate at 5.25%

The Reserve Bank of India has decided to keep its key policy rate, the repo rate, unchanged at 5.25%, signalling a cautious approach as it navigates a complex global and domestic environment.

The decision was announced after the latest meeting of the Monetary Policy Committee (MPC), which voted to maintain the current rate while continuing with a “neutral” stance. This means the central bank is keeping its options open, depending on how inflation and growth trends evolve in the coming months.

Alongside the rate decision, the RBI projected India’s economic growth at 6.9% for the financial year 2026–27. While the outlook remains positive, it reflects a slightly moderated pace amid global uncertainties. Inflation is expected to average 4.6%, staying within the RBI’s comfort range but still requiring close monitoring.

The central bank highlighted that risks from global developments remain a concern. Ongoing geopolitical tensions, particularly in West Asia, and fluctuations in crude oil prices could impact both inflation and economic activity. Any sharp rise in oil prices may increase input costs and put pressure on household budgets.

Despite these risks, the RBI expressed confidence in the strength of the domestic economy. It pointed to steady consumption, improving investment activity, and stable financial conditions as key supporting factors.

For borrowers, the unchanged repo rate means lending rates on home, auto and other loans are likely to remain stable for now. This provides some relief to households and businesses that have been adjusting to higher interest rates over the past few years.

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Corporate

Emirates NBD gets RBI nod to acquire RBL Bank

Emirates NBD Bank has secured approval from the Reserve Bank of India (RBI) to acquire a controlling stake in Mumbai‑based RBL Bank, signaling a landmark foreign investment in India’s banking sector. Under RBI’s approval, Emirates NBD can hold up to 74 % of RBL Bank’s paid-up capital, though voting rights remain capped at 26 % in line with Indian banking regulations.

The acquisition, first announced in October 2025, involves a $3 billion strategic investment through a preferential share issuance. Emirates NBD has already received regulatory clearance in its home country, and India’s competition authority had approved the deal earlier this year. Once completed, the transaction would become one of the largest cross-border banking acquisitions in India.

With RBI’s nod, RBL Bank will now move forward with a mandatory open offer to public shareholders, which requires approval from the Securities and Exchange Board of India (Sebi). The open offer would allow Emirates NBD to acquire an additional 26 % of RBL Bank’s voting share capital, in line with takeover regulations, further consolidating its stake.

After completion, RBL Bank will be reclassified as a foreign bank subsidiary, with Emirates NBD as its parent. The RBI has granted temporary regulatory relaxations during the transition, including exemptions from certain governance norms and rules for board meetings and branch integration.

The approval is valid for one year and remains subject to additional statutory clearances, including compliance with the Foreign Exchange Management Act (FEMA), Sebi rules, and government approvals for foreign direct investment beyond 49 %.

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Beyond

Rupee jumps to 93.53 after RBI action

The Indian rupee saw a sharp rebound on April 2, rising 1.3% to 93.53 against the US dollar, after the Reserve Bank of India (RBI) introduced new measures to tighten control over the forex market.

The central bank’s latest steps focus on reducing speculative trading that had been putting pressure on the rupee. By restricting non-deliverable forward (NDF) trades and preventing companies from rebooking cancelled derivative contracts, the RBI effectively limited opportunities for traders to bet against the currency.

This triggered a rapid unwinding of existing dollar positions. As traders rushed to exit these bets, dollar supply increased while demand for the rupee improved, leading to the sharp appreciation.

The move comes after a period of weakness for the rupee, driven by rising oil prices, global uncertainty, and continued outflows by foreign investors. These factors had pushed the currency to record lows in recent sessions.

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RBI makes digital payments safer from April 1

The Reserve Bank of India (RBI) is set to introduce new rules for digital payments from April 1, 2026, making online transactions more secure for users across the country.

Under the updated guidelines, all digital payments, whether through UPI, debit cards, credit cards, or internet banking, will now require two-factor authentication (2FA). Simply entering a one-time password (OTP) will no longer be enough to complete a transaction. Users will need to verify payments using an additional step, such as a PIN, password, or biometric method like a fingerprint or face scan.

The idea behind this change is simple: add an extra layer of protection. With online fraud cases rising alongside the rapid growth of digital payments, the RBI wants to ensure that transactions are safer and harder for fraudsters to misuse.

The new system is designed to be both secure and user-friendly. For smaller or routine payments made from trusted devices, the process may remain quick and smooth. However, for larger or unusual transactions, users might be asked to complete extra verification steps. This risk-based approach aims to balance convenience with safety.

The changes will also affect recurring payments such as subscriptions and automatic bill payments. Users may be required to re-confirm these transactions from time to time to ensure they are still authorised.

Banks and digital payment platforms have already been instructed to upgrade their systems to meet the new requirements. Many are expected to introduce more advanced features like device-based authentication and biometric verification to make the process seamless.

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Beyond

Centre to borrow ₹8.2 lakh cr in 1st half of FY27

The Government of India will borrow ₹8.2 lakh crore from the market during the first half of the 2026‑27 fiscal year (April–September) to meet its fiscal needs. This accounts for roughly half of the total annual borrowing target of ₹16 lakh crore announced in the Budget.

The funds will be raised through government bonds of varying maturities, issued via 26 weekly auctions conducted with the Reserve Bank of India (RBI). Spreading borrowings across weekly auctions is intended to maintain stability in the debt market and reduce pressure on interest rates.

About 25 percent of the borrowing will come from long-term bonds, with maturities ranging up to 30–50 years. This approach is designed to secure long-term funding at stable rates and manage debt repayment schedules effectively.

In addition to traditional bonds, the government plans to raise ₹15,000 crore through Sovereign Green Bonds. These bonds will finance environmentally sustainable projects and support India’s climate action and green infrastructure initiatives.

The borrowing plan is part of the government’s broader fiscal framework for FY27, aimed at balancing the fiscal deficit while funding essential public services, infrastructure, and other budget priorities. Borrowings are necessary even after accounting for revenues, small savings contributions, and other financing sources.

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Corporate

RBI clears Bain entry into Manappuram

The Reserve Bank of India (RBI) has approved a major investment by Bain Capital in Manappuram Finance, allowing the global firm to acquire joint control of the company and its subsidiaries.

Manappuram Finance said the RBI has given the green signal for an indirect change in control of its key units, including Asirvad Micro Finance and Manappuram Home Finance. This approval is a crucial step for completing the deal.

The transaction is valued at around ₹4,385 crore, making it one of the significant investments in India’s non-banking financial sector in recent times. As part of the deal, Bain Capital will become a co-promoter of Manappuram Finance along with the existing promoters.

Initially, Bain Capital is expected to acquire an 18% stake in the company. It will also launch an open offer to public shareholders. If fully subscribed, this could increase its total stake to about 41.7%.

The RBI’s approval is mandatory for such ownership changes in financial institutions. It also allows Bain Capital to have representation on the company’s board and take part in management decisions.

Manappuram Finance believes the investment will strengthen its capital base and support future expansion. The company plans to use the funds to grow its lending business across segments such as gold loans, microfinance, and housing finance.

Market reaction to the announcement was cautious. Shares of Manappuram Finance saw a slight decline after the news, reflecting investor concerns about changes in ownership and control.

The deal is expected to be completed by the end of March 2026, subject to the completion of the open offer and other regulatory requirements.

Also Read: HDFC Bank chairman Atanu Chakraborty resigns

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Leaders

HDFC Bank chairman Atanu Chakraborty resigns

India’s largest private sector lender, HDFC Bank, faced a sudden leadership shock as part‑time chairman Atanu Chakraborty resigned with immediate effect, citing “differences over values and ethics” with certain internal practices. Chakraborty, a retired IAS officer who became chairman in 2021 and was re‑appointed in 2024, did not elaborate on the specifics of his concerns, only noting that “certain happenings and practices” over the past two years conflicted with his personal values.

Following the resignation, the Reserve Bank of India (RBI) approved the appointment of veteran banker Keki Mistry as interim chairman for a three‑month term. Mistry, a long‑time executive within the HDFC Group, reassured investors and employees about operational stability and continuity, emphasizing that the leadership transition is smooth and governance remains strong.

The news triggered a sharp market reaction. HDFC Bank shares plunged around 8% in early trading, reflecting investor concern over governance uncertainty and strategic direction. The decline marked one of the steepest intraday drops in recent months, though prices later moderated slightly. The resignation came at a sensitive time as the bank continues to navigate the integration and operational pressures following its merger with HDFC Ltd, creating one of India’s largest financial conglomerates.

In response to the turmoil, the RBI clarified that its supervisory review had found no material governance or financial irregularities at the bank, affirming that it remains well-capitalized, liquid, and operationally sound.

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