Issue: 1327
·
Tata Trusts reject casting-vote argument for Chandra
reappointment, says listing will not improve governance.
·
Adani seeks Centre’s nod for US pre-clearance at Navi Mumbai
airport.
·
UP affirms its top position in tax collection, followed by
Karnataka, Tamil Nadu.
·
Biometric Aadhaar authentication mandatory for domestic LPG
refills from October.
·
Prime Minister distributes more than 51,000 appointment
letters to the newly appointed youth in Government at 20th Rozgar Mela.
India’s exports to China
surge 39% in April-August 2026-27, core BRICS shipments up 34%: India’s exports to China, South Africa, Brazil and
Russia rose 34 per cent to USD 19.9 billion during April-August 2026-27, led by
a 39 per cent surge in shipments to China, highlighting the growing importance
of the BRICS bloc for India’s export growth, as reported by news agency PTI. Among the four core BRICS
countries, China was the biggest contributor, with Indian exports rising 39 per
cent to $9.6 billion during the first five months of 2026-27. According to
commerce ministry data, exports to the four core BRICS economies increased from
USD 14.9 billion in April-August 2025-26 to USD 19.9 billion in the first five
months of 2026-27.
(Moneycontrol)
India plans to release
back-series GDP data for years before FY23 by year-end, says MoSPI Secretary
Garg: The
government is planning to release back-series for years prior to 2022-23 by the
end of this year, said Saurabh Garg, Secretary in the Ministry of Statistics
and Programme Implementation (MoSPI). The key issue in the GDP debate is the
use of double deflation and the use of producer/input prices. The
DPIIT had initiated the exercise for compilation of the Output Producer Price
Index and hence, the base revision of GDP was an opportune time to introduce
double deflation. Since output PPI was not released by February 27, 2026,
double deflation was carried out by using available item-level WPI (2011-12
series). Later, on the release of Output PPI in June 2026, following Output
PPI-based double deflation, was implemented and updated estimates were released
on August 31, 2026.
(Business Line)
100% US tariff a threat but
Indian exporters bet on new markets: Indian exporters are facing a
new source of uncertainty after US President Donald Trump signed on Friday a
legislation meant to impose tariffs of up to 100 per cent on imports from
Russia’s trade partners, including India, but they are betting on new markets
being opened up under various trade deals.The actual impact of the Lindsey O
Graham Sanctioning Russia Act of 2026 will depend on the tariff rate, product
coverage and timing of any duties, industry representatives and experts said. “Uncertainty
over exports to the US has persisted for nearly two years now. It has only
fluctuated in intensity over the past few months. The situation remains fluid
currently too unless Trump actually imposes tariffs,” Federation of India
Export Organizations (FIEO) Director General Ajay Sahai said.
(Business Standard)
Few takers for microfinance
credit guarantee scheme: The credit-guarantee scheme
for microfinance companies has failed to gain traction. Banks have sanctioned
around Rs 8,500 crore under the scheme, well short of the Rs 20,000 crore,
according to sources. “Smaller MFIs struggled to raise funds, securing only
about Rs 300 crore, while small and medium-sized lenders together received Rs
1,800 crore. Larger institutions, however, either did not take sanctions, as
the scheme offered them little advantage,” said an industry official. Despite
the 80% default guarantee, banks remained cautious about lending to low-rated
and smaller institutions, citing concerns over their creditworthiness.
(Financial Express)
ICAI mandates peer review
for PSB branch auditors: The Institute of Chartered Accountants
of India (ICAI) will extend the mandatory peer review requirement to all
component auditors undertaking public sector bank (PSB) branch audits starting
in January 2027. The institute is also planning to bring down the time taken to
dispose of disciplinary cases against chartered accountants (CAs) to 365 days
from the current two to three years, ICAI president Prasanna Kumar D said. The
peer review requirement will now cover component auditors of PSBs, while
principal auditors of PSBs are already covered under the existing framework. The
peer review process is already mandatory for firms doing statutory audits of
listed entities, specified large unlisted public companies, entities that have
raised over Rs 50 crore from the public or from banks/financial institutions,
and public-interest entities. The requirement also applies to firms rendering
attestation services with three or more partners.
(Economic Times)
Banks plan to align norms
for project finance lending: Banks are developing a common
framework for project finance lending. This initiative aims to curb regulatory
arbitrage and operational misalignment among lenders. Discussions will involve
state-run and private banks to establish common parameters. Such alignment will
enhance risk mitigation and avoid divergent audit observations. Final
guidelines by bank boards are expected to reduce regulatory arbitrage scope.
(Economic Times)
Amid strike threat, Fin
Secy Sanjay Lohia calls bank chiefs' meet to ensure services: Financial services secretary
Sanjay Lohia has called a meeting Monday with the heads of public sector banks,
regional rural banks or RRBs and NABARD to ensure uninterrupted banking
operations and essential customer services during a proposed strike by employee
unions. The unions have called for a
three-day strike from September 28. The Centre has set up a crisis
management group to deal with the proposed nationwide strikes by staff of
public sector banks. Apart from managing exigencies of strikes lasting three
days or more, the group works with banks to strengthen their standard operating
procedures (SOPs) for ensuring business continuity.
(Economic Times)
Bank credit growth hits
8-quarter high, widens funding gap as deposits lag: Report: Bank credit growth accelerated
to an eight-quarter high of 16.5 per cent in the first quarter of FY27, but
deposits grew at a much slower 11.3 per cent, widening the credit-deposit gap
and increasing funding pressure on banks, CareEdge Ratings said in a report. Credit
outstanding rose to Rs 213.6 lakh crore as of June 30, 2026, while deposits
stood at Rs 256.5 lakh crore. The 512-basis-point gap between credit and
deposit growth was the widest in eight quarters, pushing the system's
loan-to-deposit ratio (LDR) to a record 83.3 per cent.
(Economic Times)
RBI orders removal of
Maharashtra minister, 7 others from Latur DCC Bank: The Reserve Bank of India
(RBI) has ordered removal of Maharashtra Cooperation minister Babasaheb Patil
and seven other directors of the Latur District Central Cooperative Bank for
exceeding the 10-year tenure limit. Patil belongs to the
Nationalist Congress Party (NCP) led by Deputy Chief Minister Sunetra Pawar.
Reacting to the development, he told PTI that he would not challenge the RBI's
order, but the ten-year rule came into force in 2021 and it should be examined
if it could be applied for appointments prior to that year. The central bank's
order followed directions passed by the Aurangabad bench of the Bombay High
Court in response to a petition filed by bank member Satish Sheshrao Jadhav.
(Business Standard)
Saudi Arabia exits
China-backed mBridge platform amid governance and compliance concerns: The Saudi Central Bank (SAMA) has ended its
participation in mBridge, a cross-border payment platform developed by multiple
central banks alongside China, following the completion of its proof-of-concept
trial. SAMA had joined the project as a full participant in June 2024 to study
wholesale central bank digital currencies (CBDCs) and assess their potential to
improve international payments and commercial bank settlements. The mBridge initiative
uses distributed-ledger technology to allow financial institutions to conduct
cross-border transactions directly using digital versions of participating currencies.
Its primary objective is making international payments faster, more efficient,
and less costly. Developed initially by the People's Bank of China, the Hong
Kong Monetary Authority, the Bank of Thailand, and the Central Bank of the
United Arab Emirates, the platform previously involved the Bank for
International Settlements (BIS).
(Business Today)
Bankers face EU privacy
wall in race to stem evolving credit risk: Banks under pressure from European regulators
to manage extreme weather risks are bumping up against client data-privacy
barriers that are complicating efforts to guard against losses. In countries at
the epicenter of Europe’s latest heat waves, banks are now privately voicing
their frustrations. That’s as regulators declare their intention to step up
scrutiny of the sector’s exposure to wildfires, droughts and floods, with
credit risk and pricing models in particular focus.To meet regulators’ demands,
banks say they’d need access to more granular data on clients’ insurance
coverage as well as data on the physical condition of properties insured. For
now, though, such information is often off-limits due to both the EU’s General
Data Protection Regulation and national laws. A representative from one major
European lender, speaking on condition of anonymity, said that given the
restrictions, they can’t accurately assess the loss risks they face.
(Business Standard)
India's GDP will rise to
$38 trillion in 20 years, says Ajit Doval: National Security Advisor (NSA) Ajit Doval
said on Saturday that India's GDP would increase from the current USD 4.015
trillion to USD 38 trillion in the next 20 years. Addressing the
convocation ceremony of the Indian Institute of Technology (IIT) Roorkee as the
chief guest, Doval said that the students are fortunate to be living in a
transformative era where their future holds great promise.
(Business Standard)
ICAI working out assurance
standards for sustainability reporting by India Inc: The Institute of Chartered Accountants of
India has issued the Standard on Sustainability Assurance (SSA 5000) that will
provide assurance professionals with clear guidelines to assess reporting of
sustainability and ESG disclosures by India Inc. The standards are expected to
come into effect from April 1, 2027 and will bring greater rigour into ESG
disclosures. The move will help establish a comprehensive and
consistent approach for sustainability assurance across the country and is
designed to strengthen the overall credibility and improve transparency of ESG
reporting.
(Business Today)
ICAI plans further reforms
to scale up homegrown accounting firms: In the next step towards creating domestic
accounting firms of scale, the Institute of Chartered Accountants of India is
planning on further measures that are likely to take shape over the next two
months. One of the proposals under consideration is to open networking
guidelines to firms of other professions that would help in setting up
multidisciplinary firms. The move would mean that CA firms can tie up with
Company Secretaries, lawyers and even consulting firms to open a
multidisciplinary firm that would be able to provide comprehensive and holistic
advice to companies and be at par with global consulting giants.
(Business Today)
Sebi may take up PMS
regulation overhaul at September 24 board meeting: SEBI may clear at its board meeting scheduled
for September 24, the overhaul of regulations governing portfolio management
services (PMS), allowing a new mutual fund-only PMS with lower entry barriers,
reforms for the debt market, and measures to promote foreign portfolio
participation in exchange-traded commodity derivatives. According to sources,
the regulator just may remove the mandatory requirement to appoint a merchant
banker for small-value debt raised through private placements. It may also
introduce a credit risk-o-meter for disclosure for debt securities, and
consider reforms for real estate investment trusts (Reits) and infrastructure
investment trusts (InvITs). However, sources said the proposal to allow gift
cards for mutual fund investments may not sail through amid misuse concerns.
(Business Standard)
Transmission
Mechanism of Monetary Policy
§ The
monetary policy transmission mechanism refers to the process through which
changes in a central bank's policy stance influence financial conditions and
ultimately affect economic activity and inflation. A change in the policy rate
can influence money-market rates, bank lending and deposit rates, bond yields,
exchange rates and broader financial conditions.
§ For
commercial banks, transmission is particularly important because changes in
policy rates can affect the cost of funds, lending rates, credit demand and net
interest margins. The speed and strength of transmission depend on factors such
as banking-system liquidity, competition, loan repricing mechanisms and
borrowers' demand for credit.
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 : 95.7910
INR
/ 1 GBP : 128.0882
INR
/ 1 EUR : 109.9885
INR
/100 JPY: 60.9900
EQUITY INDEX
Sensex:
74294.96 (-19.63)
NIFTY:
23346.40 (+75.80)
Bnk NIFTY: 56358.70 (+302.95)
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