KEY MEASURES
* Repo Rate cut 25bps to 4.75%, effective immediately.
* Reverse Repo Rate cut 25bps to 3.25% immediate effect.
* CRR kept unchanged at 5.0%.
* Accounting method of savings bank interest rate to be changed from Apr 2010.
* Interest payment on savings bk accounts to be calculated daily product basis.
* Working group to suggest changes for BPLR system.
* Working group on BPLR system to submit report end-Aug.
* To launch exchange traded rate futures contract soon
* Extends special refinance facility to banks till March 2010.
* Extends special 14-day repo facility to banks till March 2010.
* To conduct special 14-day term repo weekly basis.
* RBI to announce first quarter review of monetary policy on Jul 28.
STANCE
* FY10 GDP growth projected at 6.0%.
* FY10 inflation projected at 4.0% by end March.
* FY10 credit growth projected at 20.0%.
* FY10 deposit growth projected at 18.0%.
* Banks with strong deposit base should aim loan growth over 20%.
* FY10 money supply growth projected at 17.0%.
* Deposit, loan rate higher vs 2004-07 but policy rates lower.
* Ensuring conducive rate condition key policy challenge.
* To ensure policy regime conducive to credit growth, quality.
* To maintain rate regime conducive to financial, price stability.
* Will continue to maintain vigil on global, local development.
* Steps taken since Sep aimed to mitigate global crisis impact.
* Stance conditioned to halt growth fall, keep financial stability.
* Will maintain conditions conducive for financial stability.
* Policy thrust to maintain adequate rupee, dollar liquidity.
* Policy thrust to also maintain market conducive to loan growth.
* External finance conditions to remain tight.
* Committed to provide ample liquidity on continuous basis.
* Global econ outlook remains uncertain and unsettled.
* Need to address several immediate challenges facing economy.
* Meeting industry credit needs second policy challenge.
* Loan growth fall reflects demand fall, inventory drawdown.
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INFLATION
* Inflation risks have "clearly abated".
* WPI inflation seen negative for short period.
* Will see all inflation indices to anchor expectations.
* Endeavour to anchor inflation, inflation expectation.
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GOVERNMENT BORROWING
* Have managed government market borrowing FY09 in orderly manner.
* To manage govt market borrow in non-disruptive way is a major challenge.
* Large govt borrow "militates" against low rate environment.
* Will use policy plus debt management tools to manage govt borrowing.
* H1 OMO buy, MSS unwind equals 3 percentage points CRR cut.
* Planned OMO buy, MSS unwind H1 FY10 to add 1.20 trln rupees liquidity.
* Challenge to unwind fiscal stimulus, return to consolidation
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LIQUIDITY
* Need to withdraw liquidity once economy regains momentum.
* Fall in rates across tenures and markets are not uniform.
* Steps since Sep boosted liquidity to 4.22 trln rupees.
* Liquidity situation improved "significantly".
* Overnight rates have softened "considerably".
* MFs' liquidity problems have eased considerably.
* Multiple policy, prudential tools aided liquidity mgmt
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GROWTH
* Upturn in growth momentum FY10 unlikely as global demand down.
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* Supporting drivers of demand major policy challenge.
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MARKET DEVELOPMENT
* Exchange traded rate futures contract to be based on 10-yr g-sec.
* Structure for pricing floating rate bonds revised.
* CONTEXT: Earlier FRB pricing linked to 364-day T-bill cut-off yields.
* FRB auction to be conducted on price-based method vs spread-based earlier.
* FRB base yield to be linked to 182-day T-bill cut-offs at auctions.
* Revised issuance structure built into NDS-OM auction format.
* New FRB issuance will be in terms of revised issuance structure.
* CCIL developing the revised issuance structure of FRBs.
* RBI panel for no bidding in physical form in G-sec auction
* One consolidated bid by PDs/banks in gilt auction in non-competitive bidding.
* Consolidated non-competitive bid to be implemented post notification change.
* Central govt WMA limit 200 bln rupees in first half 2009-10.
* Central govt WMA limit 100 bln rupees in second half 2009-10.
* State WMA limit at 99.25 bln rupees FY10.
* To launch STRIPS in FY10.
* To place draft norms on STRIPS process by end-May.
* To issue revised norms on repo accounting on basis of RBI draft norms.
* Revised repo accounting norms to be implemented from April 2010.
* Multi nodal settlement system facility extended to insurance, pension funds.
* CONTEXT: Multi nodal system was for MFs to participate in gilt tenders.
* 13 members participating in non-guaranteed OTC trades in rate derivatives.
* To OK clearing houses to have transitory pooling acct with RBI in corp bonds.
* Transitory pooling acct with RBI to help real time settlement of corp bonds.
* Extends ECB relaxation for all-in-cost limit to December.
* Relaxes FCCB buyback policy for cos
* Cos can buy back out of internal accruals $100 mln of redemption vs $50 mln
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BANKING
* BPLR lost relevance as most loans below BPLR.
* Sub-BPLR loan system makes loan pricing "non-transparent"
* To identify with SEBI macro-prudential concerns of MFs
* To review export credit refinance limit in Mar 2010
* Hikes limit on loans to NRI against deposits to 10 mln rupees vs 0.2 mln.
* Banks should not be "overly apprehensive" over small savings.
* Banks deposits, small savings are no prefect substitute.
* To ask MSE advisory panel to review Credit Guarantee Scheme.
* Allows banks to set up offsite ATMs without prior nod.
* To form group for better branch authorisation policy
* Uncertainties about fincl strength exits among global banks.
* Current norm of foreign banks presence in
* Foreign banks presence in
* To issue norms on banks' floating provisions later.
* Banks need to integrate FX assets, liabilities in branches.
* RBI to form draft norm on integrating liquidity risk mgmt of banks.
* Draft norm on integrating liquidity risk mgmt by Jun 15.
* Banks have been slow in rate cuts as deposit cost high.
* There is room for more deposit rate cuts.
* Changes risk exposure to counterparty contracts.
* Defers 12% CAR implementation of some NBFCs to Mar 31, 2010.
* Defers 15% CAR implementation of some NBFCs to Mar 31, 2011.
* Issue paper on bks floating, managing pvt capital pool by Sep.
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