Issue: 1141
January retail inflation at
2.75% in first print under new CPI series: India’s retail inflation stood
at 2.75 percent in FY26 under the newly released Consumer Price Index (CPI)
series, compared with 1.33 percent (under the old series) in the previous
month, according to data announced on February 12. The release marks the first
major revision of India’s retail inflation series in over a decade, with the
base year updated to 2024 from 2012. Inflation had begun firming up
toward the end of last year, rising to 1.33 percent in December from 0.71
percent a month earlier under the previous series. The new series shows that
prices have been rising sequentially for three straight months, as the index
rose to 104.46 in January from 104.10 in December and 104.01 in November. A key
shift in the revised CPI is the reduced dominance of food. Food’s weight has
fallen below 40 percent for the first time, while non-food categories now
account for over 60 percent of the index, up from roughly 45 percent earlier.
At the same time, rural consumption has been given a higher effective weight,
reflecting its growing contribution to overall demand. The new CPI basket has also
expanded significantly, covering more than 350 items compared with 299 earlier.
(Moneycontrol)
Economists expect prolonged
pause following release of new CPI series: Economists are expecting up to a four-month
pause on the central bank’s policy repo rate following the release of the new
consumer price index (CPI) series, which shows an upward trend in inflation and
does little to materially alter the Reserve Bank of India’s (RBI’s) near-term
projections. The next step is more likely to be a rate increase as and when the
inflation rate rises. “Given the composition of the index and the dilution of
the base effect for food items, we expect the inflation rate to go up in coming
months. There may not be too much of an alteration in inflation forecasts by
the RBI for next year,”.
(Business Today)
India to remain fastest
growing economy in Asia: Fitch Ratings: Fitch expects India’s economy to expand by 6.4
percent in 2026, placing it ahead of regional peers such as the Philippines,
Indonesia and Malaysia. “Economic growth in India, Indonesia and the
Philippines is likely to be least affected by trade pattern changes in the near
term, as manufacturing exports are low in their relatively closed economies.
India is expanding its trade relationship with countries outside of the US
through a number of trade deals, most recently with the EU, to offset risks
from US tariffs,” Fitch noted.
(Moneycontrol)
High-level
banking panel to review voting rights threshold for foreign bank subsidiaries: In
a bid to attract foreign banks to invest and expand their footprint in India,
the government is examining a proposal on voting rights, a senior government
official told Moneycontrol. The proposed change, if it goes through, would
allow foreign banks have a higher voting right, proportionate to their
shareholding. Sources familiar with the issue say the government is open to the
idea of considering requests from several foreign banks, which plan to make
fresh investments, as it would result in these banks having "skin in the
game".The proposal to evaluate the ceiling on voting rights at 26 percent
is viewed as a step towards removing the restrictions around foreign banks
taking strategic initiatives at a shareholder and board level, said the official.
Some representatives of foreign banks have made a pitch to the government
asking for their voting rights to be aligned with their shareholding in Indian
banks according to sources familiar with the matter.
(Moneycontrol)
Policy amended to allow 20%
FDI in LIC: The
government has created a special window for Foreign Direct Investment (FDI) of
up to 20% in Life Insurance Corporation of India (LIC) through changes in the
FDI Policy. This FDI in LIC has been allowed through the automatic route. The
amendments to the FDI Policy by the Department for Promotion of Industry and
Internal Trade (DPIIT) through Press Note 1 of 2026. The changes in the policy
would also allow for FDI up to 100% in an insurance company through automatic
route. FDI limit will aid the offer for
sale (OFS) in LIC, a large stock which commands a market cap of around Rs 5.6
lakh crore. The OFS is required to help the company meet the minimum public
shareholding norms.
(Financial Express)
RBI proposes ban on
intimidation, abusive calls by loan recovery agents: RBI on Thursday proposed norms
barring recovery agents from going too far in their pursuit of a defaulting
borrower. The regulator said that neither the bank’s employee, nor the recovery
agent should engage in any harsh methods to recover dues. Use of abusive
language, sending inappropriate messages either on mobile or through social
media, or excessively calling or calling outside the prescribed hours would be
considered harsh. The RBI proposals also bar threatening or anonymous calls, as
well as acts of intimidation or harassment, including attempts to publicly
humiliate individuals or intrude upon their privacy, among others.
(Mint)
RBI proposes Kisan Credit
Card revamp: RBI
has proposed a major overhaul of the Kisan Credit Card (KCC) scheme, aiming to
widen its reach, simplify operations and align it with the evolving credit
needs of the farm sector and allied activities. The central bank plans to
issue a revised set of instructions to banks, consolidating all existing
guidelines on KCC for agriculture and allied activities into a single, updated
framework. Key elements of the proposed
guidelines include: Standardisation of crop
season: A uniform approach to defining crop seasons across regions, which will
help bring consistency in assessment of credit needs and repayment timelines. Extension
of KCC tenure to six years: The overall tenure of KCC facilities will be
extended to six years, providing farmers a longer and more predictable credit
relationship with their banks.
(Moneycontrol)
Payment digitisation
improves further in H1FY26: RBI: Payment digitisation improved
further in the six months to September 2025, continuing a year-long trend, the
Reserve Bank said on Thursday. The composite Reserve Bank of
India - Digital Payments Index (RBI-DPI), which has been published since
January 2021 with March 2018 as the base year to capture the extent of
digitisation of payments across the country, showed an improvement in the first
half of FY26, it said.
(Economic Times)
SoftBank bags $7.4 billion
from India exits; portfolio value stands at $13.7 billion: Japan’s SoftBank has realised about $7.4
billion in cumulative proceeds from its India investments so far, while the
current value of its holdings in the country stands at roughly $13.7 billion,
as of December 31, according to the technology and investing conglomerate's
latest disclosure. The Japanese investment major has made 24
investments in India through its Vision Funds, with eight portfolio companies
listing on markets and four full exits, reflecting steady monetisation of
late-stage bets. SoftBank has fully exited companies such as
Flipkart, Paytm and Policybazaar, which contributed to the cumulative proceeds
disclosed by the firm.
(Moneycontrol)
India second-largest active
installed base of smartphones globally: India has the second-largest active installed
base of smartphones in the world, behind only China, according to a
yet-to-be-released Counterpoint Research report based on 2025 data. The country
has an active installed base of over 740 million smartphones, more than half of
its population of 1.45 billion. Unlike shipment data, the active installed
base reflects device longevity, user retention, and ecosystem loyalty,
capturing the cumulative impact of years of sales combined with longer replacement
cycles in mature markets.
(Business Standard)
Sebi mulls measures to cut
regulatory costs, study market impact: The Securities and Exchange
Board of India (Sebi) is examining several measures to reduce regulatory costs
across the market ecosystem, Chairman Tuhin Kanta Pandey said on Thursday. These
include setting up a centre for regulatory studies, a dedicated unit under its
Department of Economic and Policy Analysis (DEPA), and an external expert
committee to assess the impact of regulations. “Cost of capital is an important
cost and it should come down. For all productive sectors, the access to finance
should be available—which includes not only availability but also the cost.
Cost efficiency of all our measures is important. If you must build
competitiveness, obviously if the compliance burden of regulation is too high
in terms of cost and time—then to that extent the competitiveness also goes
down,” Pandey said on the sidelines of the 6th NISM-Sebi Annual International
Research Conference.
(Business Standard)
Govt mulls changes in IBC
to allow third-party funding in pursuing fraud cases: The government is mulling
amendments in the insolvency and bankruptcy code (IBC) to permit litigation
funding or third-party funding in insolvency disputes that will significantly
help in bringing down the money stuck in preferential, undervalued, fraudulent,
and extortionate (PUFE) transactions, an official told FE. “The discussion is
still at an early stage as we evaluate the international practices. The changes
in IBC will enable specialised agencies to take over filing and pursuing cases
involving PUFE transactions. Given the magnitude of funds stuck in the PUFE
transactions, the government felt the need to make necessary changes,” the
official said.
(Financial Express)
RBI proposes tech
innovation costs under farm loan eligibility norms: RBI has proposed to include expenses related
to technology innovations like soil testing, real-time weather forecasts, and
organic/good agricultural practices certification, to be eligible for farm
loans. These will be covered within the 20 per cent additional component
currently allowed towards repairs and maintenance of farm assets. It has been
proposed that banks should waive collateral security and margin requirements
for agricultural loans, including loans for allied activities up to ?2 lakh per
borrower. The regulator, on Thursday, released revised draft norms on Kisan
Credit Card scheme with an aim to expand coverage, streamline operational
aspects and address emerging requirements in the agriculture sector.
(Business Standard)
'Better to abolish RERA':
Supreme Court raps States over regulator's role: The Supreme Court (SC) on Thursday sharply
criticised the functioning of real estate regulatory authorities (Reras) across
several states, observing that they appeared to be doing little “except facilitating
builders in default” and suggesting that it might be “better to just abolish
this institution”. A Bench comprising Chief Justice of India (CJI) Surya Kant
and Justice Joymalya Bagchi made the remarks while hearing an appeal filed by
the Himachal Pradesh government against a high court (HC) order that had
stalled its decision to relocate the state Rera office from Shimla to
Dharamshala. “All states should now think of the people for whom the
institution of Rera was created. Except facilitating builders in default, it is
not doing anything else. Better to just abolish this institution,” the CJI
observed during the proceedings.
(Business Standard)
DEPRESSION
§ A depression is a severe and prolonged downturn in
economic activity. A depression may be defined as an extreme recession that
lasts three or more years or that leads to a decline in real gross domestic
product (GDP) of at least 10% in a given year.
§ Depressions are far less common than milder
recessions. Both tend to be accompanied by relatively high unemployment and
relatively low inflation.
§ Two major factors characterize a depression.
Consumer confidence falls dramatically as people begin to worry about their job
security and pull back on spending. And investments decrease as businesses and
individuals stop investing, whether that means building a new factory,
developing a new product, or buying stocks.
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 : 90.5947
INR
/ 1 GBP : 123.3580
INR
/ 1 EUR : 107.4459
INR
/100 JPY: 59.1000
EQUITY INDEX
Sensex: 83674.92 (-558.72)
NIFTY: 25807.20 (-146.65)
Bnk NIFTY: 60739.75 (-5.60)
National Women's Day: 13 February is
primarily celebrated as National Women's Day in India to commemorate the birth
anniversary of Sarojini Naidu, known for her contributions to women's rights
and literature. It is also recognized internationally as World Radio Day.
Historical events: Key historical
events include the 1931 inauguration of New Delhi as India's capital and the
1945 Allied bombing of Dresden in World War II.
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