Issue: 1340
· Govt reschedules GST Council
meet to 8 October citing ‘unavoidable circumstances’.
· Ola, Uber, Rapido bike taxis
get July 2027 deadline to go fully electric in Maharashtra.
· India's UPI is going global
again. Zimbabwe is now in talks to adopt it.
· 43% of Indian workers ride
two-wheelers to work: MoSPI.
· Central Bank of India posts
30% credit growth at Rs 3.81 lakh cr in Q2.
· Jio Platforms likely to
launch IPO on October 21, seeks to raise $3.8 bn.
India-US trade talks
'reached a plateau', compromise difficult: FM Sitharaman: India-US trade deal talks have "reached a
plateau" beyond which compromise could be difficult, Finance Minister Nirmala
Sitharaman said on Monday. "It's been a hard and very rigorously
negotiated agreement. The negotiations are still ongoing. Although we'd like to
believe that both sides have reached a plateau beyond which giving or taking
might be very very difficult," Sitharaman said while speaking at the
Munich Security Conference. "But maybe if there are rooms to operate from
both sides would do it." Sitharaman said the US wants to reduce the trade
imbalance with India, with the bilateral trade balance currently favouring New
Delhi. "The trade balance is very much in our favour. Naturally the
deficit is there on their side or the balance is going unfavourably for the
US," she said.
(Business Today)
RBI may continue liquidity
absorption as it begins rate-hiking cycle: RBI may have to continue
absorbing liquidity even as it begins its rate-hiking cycle. The immediate challenge
is keeping the weighted average call rate (WACR) aligned with the repo rate
amid elevated surplus liquidity, market participants said. Core liquidity
surplus is still around Rs.10 trillion, a large part of it in the form of
government cash surplus, and could continue to keep overnight rates below the
repo rate. The three-day review of the October monetary policy is currently
underway, with the outcome due on Wednesday. The rate-setting panel is widely
expected to raise the policy repo rate by 25 basis points. After cutting the
repo rate by 125 basis points in 2025, the RBI maintained the status quo in the
last four meetings.
(Business Standard)
Gross FDI hits 15-year
high, net FDI at five-year peak in Q1 FY27: India just had its strongest
quarter for foreign investment in 15 years. Gross foreign direct investment
(FDI) hit $30.66 billion in the first quarter of 2026-27, surpassing the
previous peak recorded in the second quarter of 2020-21. However, foreign
investors took out about 44 per cent of it through repatriation, such as
dividends, royalties, and the sale of equity. Separately, foreign exchange
equal to about 31 per cent of gross FDI moved out because Indian companies
invested abroad. Even then, net FDI, which is gross inflows minus these two,
was at a five-year high of $7.84 billion in the first quarter of 2026-27. When
seen as a proportion of gross FDI, net FDI was just about 25 per cent.
(Business Standard)
NBFCs account for half of
new-to-credit originations: Report: Non-banking financial companies
(NBFCs) accounted for nearly half (47%) of new-to-credit consumer originations
as of June 2026, becoming a major gateway to formal credit in India, showed a
joint report by the Finance Industry Development Council (FIDC) and TransUnion
CIBIL. Over the last decade, NBFCs have expanded steadily — their base of
credit-active consumers has grown almost seven times. Similarly, their share of
retail loan originations has climbed from 33% to 43%, it showed. However, the
share of first-time borrowers among NBFC originations declined to 16% in June
2026 from 28% in the year-ago period. This indicates that shadow banks are
increasingly extending credit to borrowers with established credit history.
(Financial Express)
BFSI tech spend rises, but
IT services get smaller share: Banks and financial
institutions are increasing their technology spending, but Indian IT services
firms are capturing a shrinking share of the incremental wallet as a larger
portion of budgets shifts towards AI infrastructure, software, cloud,
cybersecurity and in-house engineering capabilities. Technology spending by
banks grew 8% year-on-year in the first half of 2026, compared with 4% growth
in BFSI revenue for IT services, according to data from ICICI Securities. The
divergence reflects a structural change in the composition of technology
budgets, with a growing share of spending going directly to technology and
software providers rather than outsourced services.
(Financial Express)
Bank Q2 updates: HDFC Bank,
small finance banks, Bajaj Finance lead credit growth: Indian banks and non-banking
financial companies (NBFCs) announced their second-quarter business update on
October 4, delivering healthy credit and deposit growth during Q2 FY27. Asset quality metrics remained steady across
reporting institutions, with no visible operational disruption from ongoing
West Asia geopolitical tensions. Small Finance Banks (SFBs) led
the business expansion, outperforming mid-sized and large lenders like HDFC
Bank. HDFC Bank posted a 16%
year-on-year (YoY) increase in gross advances to Rs 32,135 Bn. Ujjivan
Small Finance Bank expanded total disbursements by 33.1% year-on-year to Rs
10,560 Cr, lifting total advances by 31.6% to Rs 45,531 Cr.
(Financial Express)
Finmin to meet heads of
banks on Tuesday to review progress of financial inclusion scheme: A meeting involving bank heads
is scheduled for Tuesday to assess the progress of financial inclusion schemes.
Key initiatives include Pradhan Mantri Jan Dhan Yojana and Pradhan Mantri Mudra
Yojana, which support small enterprises. Other schemes such as PM Jeevan Jyoti Bima
Yojana and PM Suraksha Bima Yojana offer insurance coverage for different age
groups. The StandUp India Scheme focuses on empowering SC, ST, and women
borrowers.
(Economic Times)
Private banks' deposit
mobilisation outpaces PSU peers in Q2: Deposit mobilisation by
private banks outpaced state-owned peers in the second quarter of FY27,
indicating higher Foreign Currency Non-Resident Bank deposit mobilisation under
the Reserve Bank's concessional swap window. Data compiled by PTI from
provisional numbers disclosed by banks for the July-September period shows that
private lenders' deposit growth ranged between 17 per cent and 34 per cent
year-on-year compared to a 6.87-17.01 per cent rise of state-owned lenders. In
the private space, HDFC Bank reported an 18.8 per cent year-on-year deposit
growth in Q2, Kotak Mahindra Bank (23.2 per cent), YES Bank (19.5 per cent),
Axis Bank (20.7 per cent), IDFC First Bank (17 per cent), RBL Bank (34 per
cent), and South India Bank (18.70 per cent), according to data. In
the PSB space, Bank of Baroda registered the highest growth of 17.01 per cent
year-on-year in domestic deposits and 16.75 per cent in global deposits in Q2
FY27, followed by Central Bank of India (14.43 per cent), UCO Bank (14.05 per
cent), and Punjab and Sind Bank (12.98 per cent).
(Economic Times)
RBI's panel starts monetary
policy deliberations, 0.25 bps rate hike likely: The Reserve Bank's Monetary
Policy Committee began its three-day meeting on Monday and is likely to raise
rates by 25 basis points, aligning with the central banks' hawkish stance amid
escalating conflicts in West Asia that pose risks for domestic inflation. An
interest rate hike by the RBI in its upcoming monetary policy would mark a
stance reversal, following rate cuts in 2025 and a prolonged pause thereafter,
according to a PTI poll of 16 economists and bankers.
(Business Standard)
Airlines need urgent
liquidity, but banks delay release of sanctioned funds; FIA writes to Centre: The Federation of Indian Airlines (FIA), which
represents Air India, IndiGo and SpiceJet, has urged the Civil Aviation
Ministry to intervene after the release of balance amounts sanctioned under the
Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 was delayed in several
cases. In a letter to Civil Aviation Minister Kinjarapu Ram Mohan Naidu, FIA
said airlines that had sought credit under the scheme had received only a
portion of the assistance sanctioned, while lending institutions had delayed
releasing the remaining amounts. FIA has asked the ministry to provide
"appropriate guidance and reassurance" to participating banks so that
the balance sanctioned amounts can be released, beginning with the first
tranche.
(Business Today)
Flipkart invests in
TravClan to strengthen international travel offerings: E-commerce firm Flipkart has taken a minority
stake in TravClan, a global B2B travel tech platform. The investment will
strengthen international travel supply and expand the holiday packages
available to customers across Cleartrip and Flipkart Travel. The companies
didn’t reveal the financial details of the deal.
TravClan powers outbound
leisure travel with direct supplier listings across domestic and international
destinations.
(Business Standard)
UltraTech becomes first
Indian company with 2 GW green power capacity: Leading cement maker UltraTech on Monday said
it has become the first Indian company to cross 2 GW of captive green power
capacity after commissioning a 116.55-MW wind energy project in Barmer,
Rajasthan. The Aditya Birla Group flagship company has also
commissioned 10 MW of Waste Heat Recovery System (WHRS) capacity at Sarlanagar
Cement Works, its integrated manufacturing unit in Karnataka.
(Business Standard)
National Housing Bank
likely to double affordable housing outlay for HFCs this fiscal: National Housing Bank plans to double the
refinance and affordable housing funds for large housing finance companies.
These funds will be available to companies seeking long-term and cheaper
financing options. LIC Housing Finance, Bajaj Housing Finance, and others are
likely to benefit from this increase. The funding is expected to help reduce
reliance on banks while promoting growth in housing loans.
(Economic Times)
Sebi launches nationwide
investor campaign, cautions against finfluencers: The Securities and Exchange Board of India
(Sebi) Chairman Tuhin Kanta Pandey on Monday launched a nationwide
investor-awareness campaign that will run through March 2027, with the
regulator planning to take financial literacy to rural areas and educational
institutions while cautioning investors against anonymous tips, finfluencers
and exaggerated return claims. The campaign, Project Jagrook, will bring Sebi,
stock exchanges, depositories, the Association of Mutual Funds in India (AMFI)
and the National Institute of Securities Markets (NISM) under a coordinated
investor-education framework, propagating investor-awareness messages in
several languages.
(Business Standard)
UIDAI sets out fresh rules
for Aadhaar name corrections and changes: The Unique Identification
Authority of India (UIDAI) has introduced a revised Standard Operating
Procedure (SOP) that categorises name updates based on the nature of the
change, requiring different documents for each case. The revised rules separately
cover surname changes following marriage or divorce. Applicants have to submit
the prescribed Annexure D affidavit along with Proof of Identity (PoI). The
affidavit confirms that the change is related to marriage or divorce and does
not involve a change of identity.
(Business Standard)
CROSS CURRENCY BASIS
§ Cross-currency
basis is the difference between the cost of borrowing a currency directly and
the implied cost of obtaining it by borrowing another currency and using a
currency swap.
§ Under
covered interest parity, these costs should broadly align; a persistent
difference reflects factors such as strong demand for dollar funding, hedging
pressures and constraints on banks’ balance sheets. International banks monitor
the basis because it affects overseas funding costs, investment returns and the
pricing of currency hedges.
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 : 96.2831
INR
/ 1 GBP : 127.2182
INR
/ 1 EUR : 107.7883
INR
/100 JPY: 61.0300
EQUITY INDEX
Sensex:
72382.47 (+472.77)
NIFTY:
22555.75 (+133.80)
Bnk NIFTY: 54714.10 (+263.35)
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