Issue: 1183
· RBI likely to keep repo rate
unchanged in upcoming April MPC meeting; EMIs may remain stable.
· RBI approved Emirates NBD’s
acquisition of stake in RBL Bank.
· RBI tightened forex
derivative rules to curb rupee speculation; banks restricted from offering
certain offshore derivative products.
· IRDAI approved India AS
accounting framework for insurance companies effective from April 1, 2026.
· Asset Reconstruction Companies
expect increase in stressed asset acquisitions, especially from MSME and retail
segments.
· Global economic outlook
remains uncertain due to geopolitical tensions affecting credit markets and
funding conditions.
MSMEs' working capital
drawdowns on the rise amid West Asia conflict: Bankers are seeing an uptick
in working capital loan drawdowns by MSMEs as the West Asia conflict stretches
beyond a month, with fixed cost obligations and delayed receivables putting
pressure on cash flows that prompted higher demand for funds. The sector is
likely to see the maximum impact from the ongoing war in West Asia, bankers
said. While there has been a limited effect in the March quarter (Q4FY26), the
stress is expected to reflect in portfolios in FY27. “There is some degree of
stretching, and there is definitely demand reflected in drawdowns. Possibly, it
is to tide over the current situation. However, it is also coinciding with the
year-end, which often sees similar trends, so it is difficult to clearly
separate the impact,” said a senior banker at a private-sector bank. “At the
same time, we have been holding back a bit, so we will have to wait and see how
it evolves,” the banker added.
(Business Standard)
Rising yields, inflation to
keep FY27 corporate bond issuances subdued: Corporate bond issuances in
2026-27 (FY27) are expected to remain measured and selective, as elevated and
volatile yields are likely to cap any meaningful recovery amid persistent
inflation risks and evolving liquidity conditions, market participants said. Issuances
declined to Rs.10.48 trillion in FY26 from Rs.11.02 trillion in the previous
financial year, according to Prime Database data, as companies increasingly
shifted to bank funding and short-term instruments in a rising interest rate
environment, market participants said. “Issuances will likely remain slow as
yields on the benchmark 10-year government bond are seen touching 7.25 per
cent. Issuers will wait for yields to stabilise before rushing to raise funds,”
said a dealer at a state-owned bank.
(Business Standard)
India's forex reserves
plunge $30.5 bn in March amid RBI intervention: India’s foreign exchange
(forex) reserves fell by $30.5 billion since the West Asia conflict started
late February, as the Reserve Bank of India (RBI) intervened to curb volatility
in the forex market with the rupee dropping over 4 per cent against the dollar
in March. Total reserves fell $10.28 billion to $688.05 billion during the week
ended March 27 on the back of a decline in foreign currency assets and gold
reserves, latest data released by the RBI showed. Total reserves hit an
all-time high of $728.5 billion for the week ended February 27.
(Business Standard)
Punjab National Bank
officers’ union flags mass transfers, seeks review: PNB Officers union has written
to the bank's managing director to reconsider the mass-scale transfer of Scale
IV officers and above, saying that such massive relocation would impact
performance of the country’s second-largest public sector lender. In a letter
to the bank's MD and CEO Ashok Chandra, All India Punjab National Bank
Officers' Association said that 1,142 Scale IV officers, nearly one-fourth of
its strength, have been given transfer orders creating huge disruption. The
management has arbitrarily ordered the transfer of a huge number of chief manager-rank
officers in clear disregard to set policy, it said, adding that the move is not
a policy for growth but an act of 'vengeance'.
(Business Line)
PNB Q4 Update: Advances
surge 12.9%, Global business hits Rs 29.7 lakh crore: Punjab National Bank (PNB)
reported over 10% year-on-year (YoY) increase in its global as well as domestic
business. The PSU bank in its business
update ahead of Q4FY26 said in the release that its deposits also grew over 9%
YoY and advances increased over 12% in both global and domestic business. PNB’s
global business grew around 10.79% YoY to about Rs 29.72 lakh crore as of
March. Domestic business also increased by nearly 10.39% to Rs 28.45 lakh
crore, reflecting stable growth across segments. On a sequential basis, global
business grew 2.81% and domestic business grew 2.93%.
(Financial Express)
Bank CASA ratio falls to
two-year low of 37.9% in December quarter: RBI Data: The share of low-cost CASA
deposits in the total deposits of the banking system hit a two-year low of
37.9% in the December 2025 quarter compared with 40.1% in the December 2023
quarter, according to the data from RBI. The decline was led by savings
accounts where the share dropped 210 bps to 28.9%, as depositors increasingly
shifted funds to higher-yielding alternatives such as equities, mutual funds
and gold.
(Economic Times)
Bank deposits
may grow in currency amid market volatility: Bank liquidity risk is expected to go
down as the gap between credit and deposit growth narrows this financial year.
Savers are likely to favor bank deposits over market investments due to
geopolitical concerns and market volatility. Economists anticipate improved
deposit growth, potentially boosted by interest rate hikes. This shift could
lead to slower credit delivery.
(Economic Times)
India plans Rs.2-2.5
lakh crore credit guarantee scheme amid West Asia conflict: India is drawing up a new credit
guarantee scheme for industry to cushion the fallout from the West Asia
conflict, people familiar with the matter said. The proposed scheme aims to ease funding
access for companies facing higher input and logistics costs, they said, as the
government steps up measures to contain the economic impact of the conflict. The
scheme — which could provide guarantees up to Rs.2-2.5 lakh crore — is likely
to be unveiled in two weeks, they said.
(Economic Times)
Borrowers may
soon tap formal credit via ULI app across lending segments: In a move that could bring India’s formal
credit rails to borrowers’ smartphones, the Reserve Bank Innovation Hub (RBIH)
is building a customer-facing application for Unified Lending Interface (ULI),
according to two people aware of the development. The business-to-customer
(B2C) version of ULI will take the form of a sovereign application, initially
focused on priority credit flows such as small-ticket digital Kisan Credit and
agricultural loans. ULI pilots are also underway for other lending categories
across segments such as gold, dairy, housing, and personal and vehicle loans. “The
ultimate idea has always been that ULI should have a B2C app with multiple
lenders. The vision is to provide borrowers and lenders a single platform and
not compete with any aggregators,” a person with the knowledge of the matter
said.
(Economic Times)
Mohandas Pai lauds SEBI’s
proposal to revive open market share buybacks: Former Infosys CFO and Aarin Capital Chairman
TV Mohandas Pai has strongly welcomed the Securities and Exchange Board of
India’s (SEBI) proposal to reintroduce open market share buybacks through stock
exchanges, calling it a “fantastic move” at a time when equity markets are
facing sustained pressure. Speaking on the development, Pai highlighted that
Indian markets have been impacted by persistent selling, particularly amid
geopolitical uncertainties and foreign institutional investor (FPI) outflows.
“The market has been battered… retail investors who invested through SIPs are
seeing their valuations decline,” he told Moneycontrol, adding that cash-rich
corporates can play a stabilising role by deploying surplus capital via
buybacks.
(Business Today)
Government considers steps
to scale up production of induction heaters, cooktops: The government is learnt to be looking at
measures to encourage companies to ramp up production of induction heaters,
induction cooktops and compatible utensils. This comes at a time when these
categories are witnessing high demand due to concerns over LPG availability
amidst the West Asia conflict. In this regard, a meeting was reportedly held on
Friday by Commerce Ministry with participation of senior officials from various
key Ministries such as Power Ministry, DPIIT and DGFT to discuss steps that can
be taken to enable companies to increase production of induction heaters and
cooktops among others.
(Business Line)
SEBI readies digital
platform to expand adviser base: The Securities and Exchange Board of India is
likely to launch a digital platform, SEBI SETU, this month to simplify
registration and compliance for investment advisers (IAs), as it seeks to widen
the country’s limited advisory base. The initiative comes amid a surge in
retail participation, with over 22 crore demat accounts, even as the number of
registered investment advisers remains below 1,000, with fewer active
participants. SETU is expected to serve as a
single-window interface, guiding applicants through the registration process
and helping existing advisers navigate ongoing compliance requirements – areas
that have often deterred professionals from entering the regulated space,
according to sources aware of the discussions.
(Business Line)
Average time for
issuing IT refunds hits three-year high in FY26: Investigation into bogus donations and
fraudulent tax deductions caused unusual delays in tax refunds for the 2025-26
fiscal year, according to a report submitted by the Central Board of Direct
Taxes (CBDT) to a Parliamentary panel. In response, the panel has recommended
the aggressive implementation of advanced AI-driven risk-scoring algorithms to
streamline the process and prioritise honest taxpayers. As of January 31, 2026,
the average time for issuing tax refunds climbed to 35 days for the 2025-26
fiscal year (FY26), marking a three-year high.
(Business Line)
GARCH PROCESS
§
The
generalized autoregressive conditional heteroskedasticity (GARCH) process is an
econometric model for estimating volatility in financial markets. GARCH is widely used by financial institutions to
forecast returns, optimize portfolios, and manage the risk of stocks, bonds,
and other assets.
§ Unlike traditional models that rely on historical
volatility, GARCH adapts to changing market conditions, offering a more
practical and real-world context for predicting financial instruments' prices
and rates.
§ Financial institutions leverage GARCH models to
refine asset pricing, forecast investment returns, and optimize portfolios by
factoring in past market behaviors and current economic conditions.
RBI KEY RATES
Repo
Rate: 5.25%
SDF:
5.00%
MSF
/Bank Rate: 5.50%
CRR:
3.00%
SLR:
18.00%
FOREX RATES (RBI REF. RATE)
INR
/ 1 USD : 93.2088
INR
/ 1 GBP : 123.1854
INR
/ 1 EUR : 107.4828
INR
/100 JPY: 58.4900
EQUITY INDEX
Sensex:
73319.55 (+185.23)
NIFTY:
22713.10 (+33.70)
Bnk NIFTY: 51548.75 (+100.10)
International Day
for Mine Awareness and Assistance in Mine Action: April 4th is
primarily celebrated globally as the International Day for Mine Awareness and
Assistance in Mine Action, designated by the UN to raise awareness about
landmine dangers. It is also known as International Carrot Day, World Rat Day,
and National Hug a Newsperson Day.
Historical
events: April 4th marks
significant historical events, including the 1905 Kangra earthquake in India,
the 1968 assassination of Martin Luther King Jr., the 1949 founding of NATO,
and the 1975 founding of Microsoft. In India, it is also remembered for the
births of actress Parveen Babi and Field Marshal Sam Manekshaw.
****Have a nice Day****
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