Issue: 1047
US inflation data comes in
soft, building case for more Fed cuts: A delayed snapshot of
inflation in September came in softer than expected, potentially offering a
path for the Federal Reserve to cut interest rates beyond next week’s meeting. The
core consumer price index, excluding the often volatile food and energy
categories, increased 0.2% from August, according to Bureau of Labor Statistics
data out Friday. That was the slowest pace in three months and restrained by
the smallest increase in a key measure of housing costs since early 2021. In
the absence of other official reports during the government shutdown, the
highly anticipated reading is a welcome surprise, particularly for several
policymakers who are leery of cutting rates further. While the central bank was
already widely expected to lower borrowing costs at next week’s meeting,
investors are betting the report will help convince officials that they can do
so again in December, especially if they don’t get another CPI report next
month.
(Moneycontrol)
Overseas direct investments
declined sharply in July and August: With rising global
uncertainty, overseas direct investment (ODI) by Indian companies declined in
the September quarter on a year-on-year (y-o-y) basis. ODI commitments for the
July-September 2025 period dipped 13 per cent in the quarter and stood at
$10.03 billion, compared to $11.54 billion in the same quarter last year,
according to RBI data. Further, data from the Department of Economic Affairs
showed that actual ODI flows have been softening from July 2025 onwards as the
tariff tensions began. The ODI outflow in June 2025
was $2.39 billion, $2 billion in July, and $1 billion in August. The
corresponding flows for last year were $1 billion, $2.5 billion and $1.95
billion. However, actual outward FDI during April-August 2025 increased to
$10.2 billion from $7.8 billion in the same period last year.
(Business Line)
Share of gold in forex
reserves doubles since 2022:
The share of
gold in India’s total foreign exchange reserves more than doubled to 13.6% in
September this year from early 2022 levels, as global gold prices touched
record highs. Geopolitical uncertainty has driven gold prices due to its
safe-haven status and the ability to remain a reliable store of value. Conversely,
the share of foreign currency assets in the country’s total foreign exchange
reserves fell from 89.9% to 83.1%, the lowest ever. India’s forex reserves
touched $702 billion in the week ending October 17 after falling to $694
billion in August this year. India’s forex reserves was at an all-time high of
$705 billion in September last year.
(Financial Express)
Merger buzz:
PSBs yet to hear from govt, focused on diluting stakes to meet norm: State-owned
lenders have not yet received any communication from the government regarding
the next round of public sector bank (PSB) consolidation, five senior bankers
aware of the matter told Moneycontrol. This comes amid renewed market
speculation about possible mergers among large state-owned lenders. The
bankers said that while consolidation remains a long-term policy objective, no
formal discussions or directions have been initiated so far. “There has been no
communication from the finance ministry on any merger proposal. For now, the
focus remains on strengthening balance sheets,” one of the bankers said. Instead,
most PSBs are currently prioritising efforts to bring down the government’s
shareholding to comply with the minimum public shareholding (MPS) norms.
(Moneycontrol)
JPMorgan to allow Bitcoin
and Ether as collateral in crypto push: JPMorgan Chase & Co. plans to allow
institutional clients to use their holdings of Bitcoin and Ether as collateral
for loans by the end of the year in a significant deepening of Wall Street’s
crypto integration. The program, offered globally, will rely on a third-party
custodian to safeguard the pledged tokens, according to people familiar with
the matter. It builds on JPMorgan’s earlier move to accept crypto-linked ETFs
as collateral.
(Business Line)
Blackstone to buy minority
stake in Federal Bank for ?6,197 cr: The Federal Bank board on Friday approved a
preferential issue of an aggregate of up to about 27.29 crore convertible
warrants aggregating ?6,196.51 crore to an affiliate of Blackstone, marking the
alternative assets firm’s maiden investment in the Indian banking sector. It
will hold a 9.99 per cent stake on exercise of the warrants. With this,
Kochi-based Federal Bank joins the list of other banks such as IDFC First Bank,
Yes Bank and RBL Bank that have attracted the attention of foreign investors.
(Business Line)
RBI proposes new
infrastructure risk weights for NBFCs: RBI on Friday introduced targeted amendments
to its scale-based regulation framework for NBFCs, proposing a refined approach
to risk weights for infrastructure exposure. The 2025 amendments revise the
risk weight structure with loans to high-quality infrastructure projects where
the obligor who has repaid at least 10% of the sanctioned amount will attract a
reduced risk weight of 50%. If the repayment is between 5% and 10%, the risk
weight increases to 75%.Projects that fail to meet these standards will be
subject to higher risk weights under other categories, ensuring a
risk-sensitive and performance-linked regulatory approach, according to a
circular by the central bank. Under the new amendment, infrastructure projects
are classified as high-quality infrastructure projects that has completed at
least one year of satisfactory operations post-commercial launch is classified
as a standard asset, and revenue dependence on a central government or public
sector entity with contractual certainty of payments. These amendments are set to
take effect from April 1, 2026, or earlier if adopted in full by an NBFC. RBI
has invited feedback on the draft guidelines by November 21.
(Financial Express)
RBI proposes 70% cap on financing
for acquisitions:
RBI on Friday issued the draft circular on acquisition financing that proposes
to allow banks to banks to finance as much as 70% of the acquisition value,
provided the rest 30% comes from acquirer. “Acquisition financing be extended
by banks to Indian corporates for acquitting equity stakes in domestic or
foreign companies as strategic investment by the core objective of creating
long-term value rather than restructuring for short-term gains,” the draft
circular said. The regulator asked banks to put in place a
policy on acquisition finance, which defines the overall limit under the
‘direct capital market exposures’, eligibility of borrowers, security, margin,
risk management and monitoring norms, among others. It also said that the
aggregate exposure of a bank towards acquisition financing shall not exceed 10%
of Tier-1 capital. It also said that the acquirer
should be a listed firm with a record of satisfactory net worth and profits for
the past three years.
(Business Line)
Plagiarism allegations
erupt between RBI and SBI economists on LinkedIn: Tensions have surfaced
between the Reserve Bank of India and the State Bank of India as an RBI
economist claims their research has been lifted in recent SBI reports. The
controversy revolves around accusations of plagiarism, particularly in SBI's
Ecowrap, which allegedly mirrors RBI's Monetary Policy documents.
(Economic Times)
RBI raises ceiling, value
for loans taken against shares and debt MFs: The Reserve Bank of India is
proposing significant changes to lending against securities. Individuals can
now borrow up to Rs 1 crore against shares and debt mutual funds. The loan to
value ratio for loans against shares will increase to 60 percent, and for debt
mutual funds to 75 percent. LTV for loan against shares is
proposed to be increased to 60% from 50%, while LTV for debt mutual funds is
proposed to be increased to 75% from 50%. However, if ratings for any of
the securities are downgraded below investment grade, the bank will have to
change the securities in question. The amount of loan that can be
granted to individuals against these securities is capped at Rs 1 crore, while
a loan up to Rs 25 lakh per individual will be granted for the acquisition of securities
in secondary markets.
(Economic Times)
SBI and Bank of Baroda to
launch Indian digital payment intelligence corporation to combat fraud: India's largest banks, SBI
and Bank of Baroda, are spearheading a new digital payments intelligence
platform. This initiative aims to detect and prevent fraudulent transactions
across all banks in real time. All 12 state-run banks will hold equity in the
proposed entity, named Indian Digital Payment Intelligence Corporation. This
move strengthens risk management amid rising bank frauds.
(Economic Times)
Deepinder Goyal launches
$25 million fund for human ageing research: Zomato founder and CEO
Deepinder Goyal has announced the launch of a $25 million fund to support
global research into human ageing through his initiative, Continue. Continue
began as a research initiative two years ago, with a focus on exploring the
human body as a system with potential leverage points that could influence how
humans age. According to Goyal, the team has been investigating a key insight
into human aging that has remained "hiding in plain sight" for
centuries. The research is in its final stages and Goyal indicated that more
details will be revealed in the coming weeks.
(Business Today)
India's private sector
growth eases to five-month low in October, PMI shows: Growth in India’s private sector eased to a
five-month low in October as weaker demand and rising output prices weighed on
business optimism, a survey showed on Friday. HSBC’s flash India Composite
Purchasing Managers’ Index (PMI), compiled by S&P Global, fell to 59.9 this
month from a final reading of 61.0 in September and below a Reuters poll median
forecast of 61.2. Despite slipping to the lowest since May, growth remained
robust and well above the 50-mark separating expansion from contraction. The overall index - a
seasonally adjusted index measuring the month-on-month change in the combined
output of India’s manufacturing and service sectors - was mainly dragged down
by a slowdown in services growth even as manufacturing activity recovered from
a four-month low in September.
(Business Line)
Govt targets raising female
share in labour force to 35% by 2030: Often facing flak for the low participation of
women in the labour force despite decent economic growth, the government has
set a target to increase the female labour force participation rate (F-LFPR) to
35% by 2030. As of September this year, the rate, across the country, was 26.2%
for women of all ages, measured in the current weekly status (CWS) mode. LFPR
is defined as the percentage of persons in the labour force, either working,
seeking or available for work, in the population. In the CWS, the activity
status is determined based on the seven days prior to the survey date. In the draft National
Labour & Employment Policy Shram Shakti Niti 2025 released recently, the
government has proposed enhancing the F-LFPR through measures such as safer
workplaces, affordable childcare, flexible and remote work arrangements, and
equal pay for equal work.
(Financial Express)
SEBI bars mutual funds from investing in Pre-IPO placements:
The Securities
and Exchange Board of India (SEBI) has barred mutual fund schemes from
participating in pre-IPO placements of equity shares and related instruments,
allowing them to invest only in the Anchor Investor portion or the public issue
of an Initial Public Offering (IPO). In a letter to the
industry body Association of Mutual Funds in India (AMFI), SEBI cited Clause 11
of the Seventh Schedule of the SEBI (Mutual Funds) Regulations, 1996, which
mandates that all investments by mutual fund schemes in equity shares and equity-related
instruments must be made only in securities that are listed or to be listed.
(Moneycontrol)
World Bank sanctions $280 million to boost Kerala’s health
coverage for elderly: The
World Bank’s Board of Executive Directors has approved a new programme to
improve the life expectancy and quality of life for 1.1 crore elderly and
vulnerable people in Kerala through wider access to health coverage and
resilient health systems. The $280-million Kerala Health System Improvement
Programme will build a more comprehensive health system resistant to climate
shocks. It will also strengthen the State’s digital health systems through
expanded e-health services, integrated data platforms, and enhanced cyber
security. The $280 million loan from the International Bank of Reconstruction
and Development has a final maturity of 25 years with a grace period of five
years.
(Business Line)
Equity exposure for government staff raised to 75% under NPS and
UPS: To
enhance flexibility in retirement planning, the Centre has allowed Life Cycle
75 (LC 75) and Balanced Life Cycle (BLC) options for central government
employees under the market-linked National Pension System (NPS) and the
guaranteed Unified Pension Scheme (UPS) under the default option. The move
raises the equity exposure limit to 75% from the earlier 50%. In LC 75, the
maximum equity allocation will be 75%, which will gradually taper from age 35
to 55. In LC 50, the maximum equity allocation will be 50%, tapering gradually
over the same age range. Other
default investment options include Scheme G, where the entire corpus is
invested in government securities to ensure low-risk, fixed returns. Under LC
25, the maximum equity allocation is 25%, tapering gradually from age 35 to 55.
In LC-50, the maximum equity allocation is 50%, tapering gradually from age 35
to 55.
(Financial Express)
LABOUR FORCE PARTICIPATION RATE (LFPR)
·
LFPR is defined as the
percentage of persons in the labour force, either working, seeking or available
for work, in the population. In the current weekly status (CWS), the activity
status is determined based on the seven days prior to the survey date.
·
LFPR is calculated by dividing
the number of people in the labor force (employed or unemployed and available
for work) by the total working-age population, and then multiplying by 100.
· In India, PLFS, launched in 2017, used to publish quarterly statistics for urban areas only, following CWS, and, on an annual basis, for both urban and rural areas in the usual status as well as the CWS, until it was revamped in January 2025.
RBI KEY RATES
Repo
Rate: 5.50%
SDF:
5.25%
MSF
/Bank Rate: 5.75%
CRR:
3.50%
SLR:
18.00%
FOREX RATES (RBI
REF. RATE)
INR /
1 USD : 87.7058
INR /
1 GBP : 116.8498
INR /
1 EUR : 101.7890
INR
/100 JPY: 57.3300
EQUITY INDEX
Sensex: 84211.88 (-344.52)
NIFTY: 25795.15 (-96.25)
Bnk NIFTY: 57699.60 (-378.45)
International Artist Day: A day to honor
artists and their contributions to society. It is celebrated on October 25th in
part because it is the birthday of the famous artist Pablo Picasso.
Historical events: October 25th
marks several significant events in Indian history, including the start of the
process for India's first general election in 1951 and the appeal for help from
Kashmir's Maharaja to the Indian government in 1947. In world history, this
date saw the first use of kamikaze attacks by Japan in 1944 and the beginning
of the U.S. invasion of Grenada in 1983.
****Have a nice Day****
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