Issue: 1235
· Mastercard to look beyond
card biz; target tier 3 & 4 markets for growth.
· India insurance market to
grow 10.7% annually over next decade, fastest among major markets, says Allianz.
· IT stocks plunge on renewed
AI fears after biggest rally in a year.
· US House approves resolution
to halt military action against Iran.
· Visa appoints Shah Rukh Khan
as brand ambassador for India campaign.
RBI denies selling gold,
says holdings unchanged at 880.52 tonnes: The Reserve Bank of India
(RBI) on Wednesday denied a media report claiming it may have sold a portion of
its gold holdings and clarified that its physical stock of gold remains
unchanged at 880.52 tonnes. The Reserve Bank of India
(RBI) has come across reports in certain sections of the media about RBI's sale
of gold. The RBI emphasises that these reports are not correct," the
central bank said in a statement posted on X.
(Moneycontrol)
USTR proposes 12.5% penalty
tariffs on Indian goods in Section 301 forced labour findings: In what could add pressure on
New Delhi to conclude a bilateral trade deal with the US early and “lock-in”
tariff rates at about 18 per cent, the US Trade Representative (USTR) office,
in its Section 301 findings on forced labour shared on Tuesday, observed that
India has failed to effectively enforce forced labor import prohibition and
proposed new tariffs of 12.5 per cent on most Indian goods. “For
economies that impose a forced labour import prohibition; have taken on
commitments related to forced labour import prohibitions through an agreement
on reciprocal trade; or have imposed a partial regime with the effect of
preventing the importation of certain forced labour goods, the trade
representative proposes 10 per cent as the rate of additional duties. For all
other economies, the trade representative proposes 12.5 per cent as the rate of
additional duties,” the USTR Section 301 findings report noted, explaining the
proposed duties.
(Business Line)
PMI services rose to 59.8
in May, highest since November: With strong demand, private
sector businesses did well in May, as Purchasing Managers’ Index (PMI) for
services rose to 59.8 as against 58.8 of April, S&P Global reported on
Wednesday India’s services PMI signalled an expansion in business activity in
May, supported by a continued rise in new business.
(Business Line)
Launch of Payment Systems’
Connectivity Between India and Cambodia for QR-Code Based Cross-Border Merchant
Payments: The
connectivity of payment systems between India and Cambodia for acceptance of
UPI at QR-Code enabled merchants in Cambodia has been launched on June 02, 2026
at Phnom Penh, Cambodia. This marks the go-live of the first phase of
collaboration between NPCI International Payments Limited (NIPL) and Acleda
Bank Plc., under the aegis of RBI and National Bank of Cambodia, to enable
interoperability of QR-code based Person to Merchant (P2M) transactions between
the two countries.
(RBI Press Release)
SBI will take the lead in
diversifying liability options, says chairman CS Setty: State Bank of India chairman
CS Setty is closely watching the situation playing out in West Asia but is not
losing sleep — or missing occasional weekend movies — over the geopolitical
uncertainty. In an interview to
Moneycontrol, Setty said there is adequate demand coming from India Inc and
retail consumers, though the latter could change if fears of inflationary
pressures increase. It is this confidence that has led to the country’s largest
bank retaining its FY27 loan growth guidance of 13–15 percent.
(Moneycontrol)
Banking reform panel likely
to get 3-4 months to chart roadmap for next phase of sector overhaul: The government is set to soon
constitute the proposed High-Level Committee on Banking for Viksit Bharat, with
the aim of receiving its report within three to four months and initiating a
new phase of comprehensive banking sector reforms. Sources said the terms of
reference for the committee are almost ready and the panel will be constituted
once the members are finalised. Among the key issues likely to be examined are
the creation of larger Indian banks through consolidation, enhancement of FDI
limits in public sector banks (PSBs), rationalisation of voting rights for
investors, and a review of regulatory requirements such as the CRR, SLR and
banking licence norms.
(Financial Express)
RBI’s Swaminathan warns
banks on rising risks beyond balance sheets: Indian banks face a new era of
resilience. RBI Deputy Governor Swaminathan J highlighted the need to manage
complex uncertainties from geopolitics, climate change, and AI. This shift
moves beyond balance sheet stress. Banks must adapt to unpredictable risks. The
Indian financial system is entering this phase with strong fundamentals.
(Economic Times)
Anthropic brings Project
Glasswing to India and 14 more countries with access to controversial Mythos AI
model:
Anthropic
has expanded Project Glasswing, its cybersecurity initiative that provides
selected organisations access to its AI model Claude Mythos Preview, to more
than 15 countries, including India. The move marks a wider rollout of the
programme months after the company decided not to release the model to the
general public due to concerns over potential misuse. Project Glasswing is
Anthropic’s programme designed to provide vetted organisations access to Claude
Mythos Preview, an AI model focused on cybersecurity. The model is designed to
identify software vulnerabilities, detect weaknesses in code and help
organisations strengthen cyber defences.
(Moneycontrol)
Cabinet clears Rs
10,000-crore package to stabilise ATF prices to shield airlines from crude
shock:
The cabinet
on June 3 approved a one-time budgetary support of up to Rs 10,000 crore for
oil marketing companies (OMCs) to offer aviation turbine fuel (ATF)
price-stabilisation support to Indian airlines hit hard by the ongoing Iran
war. The government said the support will be in the form
of interest-free advances to OMCs through the demands for grants of the
petroleum and natural gas ministry to cover under-recoveries, the ?gap between
market-linked jet fuel ?prices and the moderated rates charged to airlines.
(Moneycontrol)
Sebi cracks whip on Rajesh
Exports promoter over alleged fund diversion: The Securities and Exchange Board of India
(Sebi) on Wednesday barred Rajesh Mehta, promoter and executive chairman of
jewellery firm Rajesh Exports (REL), from dealing in the company's securities
for three years over alleged financial misstatements and regulatory violations.
In a 109-page interim order, Sebi alleged that company funds were routed and
layered through personal accounts and related entities without adequate
disclosures or supporting documentation. According to the regulator, REL
transferred company funds to Mehta's personal account for derivative trading
through his account with stockbroker Affluence Shares and Stocks.
(Business Standard)
NPCI International and
ACLEDA Bank Launch Cross-Border UPI Payments: NPCI International Payments
Limited (NIPL) and ACLEDA Bank Launch Cross-Border UPI Payments in Cambodia via
KHQR, Cambodia’s National QR Code. The breakthrough collaboration
went live following a formal ceremony in Phnom Penh, attended by H.E. Dr. Chea
Serey, Governor of the National Bank of Cambodia (NBC), alongside high-level
representatives from the Reserve Bank of India (RBI). The event marked the
completion of Phase 1 in establishing a cross-border QR payment linkage between
the two nations through Bakong’s KHQR, Cambodia’s national QR code.
(PiB)
Loan recovery
norms: Tough to get agents in small towns, say NBFCs: The Finance Industry Development Council
(FIDC), the self-regulatory organisation (SRO) for non-banking financial
companies (NBFCs), has urged the regulator to drop the requirement of certified
recovery agents for small-ticket loans citing paucity of such professionals,
particularly in smaller towns. In the draft norms on loan-recovery agents last
month, the Reserve Bank of India (RBI) had proposed that such professionals
should obtain a certificate from the Indian Institute of Banking and Finance
(IIBF) after completing the training programme for debt recovery agents, or
from any other institute having a tie-up arrangement with the IIBF.
(Business Standard)
RBI rejects
Treasury bills bids at weekly auction amid tepid demand: RBI) on Wednesday rejected bids for the
182-day and 364-day Treasury bills (T-bills) at its weekly auction, as bids for
the papers were seen coming in at elevated yields, dealers said. The
cancellation came amid a broad-based selloff across domestic financial markets.
Escalating tensions in West Asia pushed crude oil prices higher, while concerns
over US President Donald Trump's latest tariff proposals weighed on investor
sentiment. Yield on the benchmark 10-year government bond settled at 7.03 per
cent, against the previous close of 7.01 per cent.
(Business Standard)
J-CURVE
§
A J-curve is a trendline that shows an initial loss
immediately followed by a dramatic gain. In a chart, this pattern of activity
would follow the shape of a capital "J".
§
The J-curve effect is often cited in economics to
illustrate the way that a country’s balance of trade initially worsens
following a devaluation of its currency, then quickly recovers and finally
surpasses its previous performance.
§ J-curves are observed in other fields including
medicine and political science. In each case, an initial loss is followed by a
significant gain to a level that exceeds the starting point.
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 : 95.7795
INR
/ 1 GBP : 128.7819
INR
/ 1 EUR : 111.2645
INR
/100 JPY: 59.8800
EQUITY INDEX
Sensex:
74346.17 (-303.67)
NIFTY:
23405.60 (-77.95)
Bnk NIFTY: 54185.95 (+471.30)
Historical events: June 4 marks the
International Day of Innocent Children Victims of Aggression. In history, it witnessed
major turning points, including the violent 1989 Tiananmen Square military
crackdown in Beijing and, in India, the launch of the Swatantra Party by C.
Rajagopalachari in 1959, and the heroic martyrdom of freedom fighter Moti Bai
at the Jhansi Fort in 1858.
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