Issue: 1227
· Rajasthan govt increases
export technology upgrade grant to Rs.1 crore.
· India turns to Latin America,
Africa for crude oil amid West Asia crisis.
· RBI conducted a $5 billion
dollar-rupee swap auction on 26 May to inject long-term liquidity into the
banking system.
· India’s banking liquidity
surplus narrowed sharply due to sustained RBI dollar sales in forex markets.
· BHIM UPI app recorded nearly
300% growth in FY26, driven by cashback schemes and increasing user trust.
FM Sitharaman directs focus
on '3Fs', explains why PM Modi wants India to conserve forex: Union finance minister Nirmala
Sitharaman on May 25 said the West Asia conflict has created a “big challenge”
for businesses, common people and MSMEs with high fuel costs, shortage of
inputs and pressure on working capital creating a sense of “uncertainty”. The
FM urged the citizens to understand the significance of '3 Fs' -- fuel,
fertiliser, and foreign exchange, and added that the government wants to
protect its citizens and industries , due to which Prime Minister Narendra Modi
asked for the conservation of foreign exchange as far as possible, Sitharaman
said. The finance minister said high
crude prices, fluctuating fertilizer rates and steep gold prices are creating
challenges on the external front for the country. “All these three payments
will have to be in foreign exchange,” she added. India’s forex reserves stood
at $689 billion as of May 15, 2026. Just before the beginning of the West Asian
conflict, the reserves had hit an all time high of $728.5 billion (as on
February 27, 2026).
(Moneycontrol)
Govt proposes broad revamp
of industrial output index ahead of new series: The government on Monday said
it is preparing a major overhaul of the Index of Industrial Production (IIP),
with wider sectoral coverage, a revamped item basket, chain-linked indices and
methodological changes aimed at better capturing the country’s evolving
industrial structure. The proposed changes are part of the new IIP series with
base year 2022-23, recommended by the Technical Advisory Committee on Base Year
Revision of the All-India Index of Industrial Production (TAC-IIP), constituted
by the Ministry of Statistics and Programme Implementation (MoSPI) in September
2024 under the chairmanship of Mridul K Saggar.
(Business Standard)
India's IIP basket gets a
refresh: Rare earths in, kerosene out: The new Index of Industrial
Production (IIP) series, which shifts the base year from 2011–12 to 2022–23 and
is scheduled for release on June 1, will, for the first time, track rare earths
and minor minerals, piped natural gas (PNG), and water supply, sewerage and
waste management. The recommendations are contained in the report of the
Technical Advisory Committee (TAC), released by the National Statistics Office
on Monday. The number of item groups under the new series rises to 463 from 407
in the 2011–12 series. In manufacturing, the count goes up from 405 to 455 item
groups, with 64 item groups dropped and 120 new ones added. Items dropped
include kerosene, iodised salt, incandescent lamps, fluorescent tubes and
compact fluorescent lamps, electric filament lamps, sewing machines, wines, and
butter, among others.
(Business Standard)
RBI tightens norms for
re-appointment of directors on UCB boards: The Reserve Bank of India has
introduced new rules for Urban Co-operative Banks. Directors can now serve for
a maximum of ten years. Following this, a mandatory three-year cooling-off
period is required before re-appointment. This measure aims to prevent
directors from circumventing tenure limits. The new directions are effective
immediately, ensuring better governance in these financial institutions.
(Economic Times)
Private banks likely to
outperform govt banks in earnings growth over next 2 years: Private banks are set for
stronger earnings growth in the coming two years. Loan growth is expected to be
similar for both private and public sector banks. However, private lenders will
likely see better profits due to stable margins and fewer risks. Public sector
banks may face profitability pressures from various factors. Market valuations
are considering current banking sector challenges.
(Economic Times)
Priority sector lending
boosts inclusion, not always guarantee growth: EAC-PM: India's priority sector
lending has aided financial inclusion for decades. However, a recent report
suggests that simply increasing directed credit might not lead to higher
economic growth. The analysis indicates that while these policies have helped
reduce poverty, forcing credit into poorer districts may be inefficient.
Priority Sector Lending Certificates help banks manage risks associated with
these loans.
(Economic Times)
Lenders urge RBI for
hedging support framework to revive overseas borrowing: Indian banks and companies are
asking the Reserve Bank of India for help with offshore debt. High costs to
protect against currency changes make borrowing abroad more expensive than at
home. This is slowing down foreign fundraising. A new support system could
lower these costs. This would help bring more foreign money into India and
support its economy.
(Economic Times)
FM Nirmala Sitharaman
pitches for customised credit models for MSMEs: Finance Minister Nirmala
Sitharaman on Monday asked the Small Industries Development Bank of India
(Sidbi) and the banking system to go beyond “standard products” for Micro,
Small, and Medium Enterprises (MSMEs), while emphasing India’s small businesses
require customised credit structures aligned to their business cycles rather
than uniform lending models. “Standard products cannot serve non-standard
businesses,” Sitharaman said while addressing Sidbi’s Foundation Day event. For
agri-processing MSMEs, she suggested linking repayments to harvest cycles.
Textile exporters, she said, needed financing aligned to export cycles, while
tourism businesses required repayment schedules that recognised seasonal
earnings.
(Business Standard)
India overtakes US in
electric car penetration for the first time: India has finally raced ahead of the United
States in electric car penetration for the month of April 2026. However, India
still lags behind the US in battery electric vehicle sales. Electric vehicles
accounted for 5.8% of all new car sales in India during April, buoyed by new
model launches, according to VAHAN registration data. This compares with 5.1%
EV penetration in March 2026 and 3.7% in the same month last year. While India’s EV
penetration rose, the share of battery electric vehicles in new car sales fell
to 5.1% in the US, the world’s second-largest car market by volume after China.
India, however, accounted for far less electric car sales than the US in April.
That’s because the US sells three times more cars than India, the world's
third-largest car market by volume.
(Business Today)
Paytm to invest €9 million
in Europe arm to fund business expansion: Fintech firm One 97 Communications, which
operates under the Paytm brand, on Monday said its wholly-owned subsidiary
Paytm Cloud Technologies will invest 9 million euro in its European payment
entity. "...The Board of Directors of PCTL (Paytm Cloud Technologies
Limited)...has approved an additional investment by way of subscription to 9
million equity shares of EUR 1 (one euro only) each at a total consideration of
EUR 9 million (nine million euro), in its wholly-owned subsidiary, Paytm Europe
Payments S.A (Paytm Europe)," the company said in a filing.
(Business Standard)
India's FY27 fertiliser
subsidy may top Rs.3 trn if West Asia crisis persists: Fertiliser subsidy given by the Union
government this financial year may even top Rs.3 trillion if the crisis owing
to the war in West Asia lingers, a senior government official said on Monday. “We
(India) have sufficient stocks of fertilisers, in excess of 20 million tonnes,”
said Krishna Kant Pathak, joint secretary, Department of Fertilisers. “But
there is a cost to it. The cost, which before the war was around Rs.2 trillion,
will, I feel, grow substantially … it
(fertiliser subsidy) could be more than Rs.3 trillion,” Pathak said while
addressing a roundtable discussion titled “De-risking India’s Fertiliser Supply
Chain and Demand Management Amid Rising Geopolitical Risks”, organised by the
Indian Council for Research on International Economic Relations (Icrier)..
(Economic Times)
SEBI proposes dynamic
framework for Option strike prices to improve trading continuity: SEBI, has proposed to allow
exchanges a flexible and standardized framework for the introduction and
management of strike prices in options contracts across exchanges during
trading hours. The proposal aims to improve trading continuity during periods
of sharp market volatility and enhance ease of doing business in the
derivatives segment. A strike price is the fixed
level at which traders can buy or sell an underlying asset, such as a stock or
index, in an options contract. Traders rely on a range of strike prices to take
positions based on their market outlook or to hedge existing exposures. The
availability and relevance of these strike prices are critical for efficient
trading.
(Moneycontrol)
CBDT pushes
banks, MFs to file error-free transactions by May 31: With less than a week left before the May
31 deadline, officials from the Central Board of Direct Taxes (CBDT) urged
banks, co-operative banks, mutual funds (MFs), companies, property registration
authorities, foreign exchange dealers, and other specified institutions to
ensure timely and error-free filing of the Statement of Financial Transaction
(SFT) for 2025–26. Under the income-tax (I-T) law, these reporting entities are
required to furnish details of specified high-value transactions — such as
interest payments, dividends, securities trades, MF investments, and property
deals — to the I-T department.
(Business Standard)
RBI forms panel to study
quantum technology risks in finance sector: The Reserve Bank of India (RBI) has formed an
eight-member panel to study issues related to quantum technology and recommend
a roadmap and framework to quantum-secure the Indian financial system. “Quantum technology represents
a paradigm shift compared with traditional systems as it leverages the
principles of quantum mechanics, such as superposition and entanglement. This
enables quantum systems to address complex financial problems such as portfolio
optimisation, risk assessment, macroeconomic modelling, etc,”
(Business Standard)
ABRAHAM ACCORDS
·
The
Abraham Accords are a series of historic U.S.-brokered agreements signed in
2020 designed to normalize diplomatic, economic, and security relations between
Israel and several Muslim-majority nations.
· Signed in September 2020, the first accords
established formal ties between Israel, the United Arab Emirates (UAE), and
Bahrain. Shortly
after, Sudan and Morocco also agreed to normalize relations with Israel. The accord groupings have
continued to expand, with Kazakhstan formally joining the coalition.
· Instead
of conditioning diplomatic recognition of Israel on the resolution of the
Israeli-Palestinian conflict, participating states prioritized mutual economic
growth, technology sharing, and strategic coordination.
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 : 95.2047
INR
/ 1 GBP : 128.3486
INR
/ 1 EUR : 110.8157
INR
/100 JPY: 59.9100
EQUITY INDEX
Sensex:
76488.96 (+1073.61)
NIFTY:
24031.70 (+312.40)
Bnk NIFTY: 55293.65 (+1238.30)
Historical
events: On May 26,
several defining moments shaped history, including Napoleon Bonaparte being
crowned King of Italy in 1805 and the miraculous evacuation of Allied troops
from Dunkirk beginning in 1940. For India, this date is highlighted by the
swearing-in of Narendra Modi as the 15th Prime Minister in 2014.
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