Issue: 1179
· RBI caps banks’ net open
forex positions at $100 million to curb rupee volatility.
· Banks urge RBI to review
forex cap, warn of mark-to-market losses due to forced unwinding of positions.
· Indian rupee breached 95 per
USD amid foreign outflows and global economic pressures.
· RBI imposed monetary
penalties on Union Bank of India, Bank of India and Central Bank of India for
regulatory non-compliance.
· Bank credit growth rose to
14.3%; credit to industry grew 13.5% in February as per RBI data.
· Banking stocks fell as forex
position limits raised concerns about losses in banks’ treasury portfolios.
India’s share in global
m-cap slips below 3% for first time in four years: India’s share in global market
capitalisation has slipped below 3 percent for the first time in four years
amid continued selling in domestic equities, driven by geopolitical tensions
involving the US and Iran and uncertainty over the reopening of the Strait of
Hormuz. India’s share stood at 2.98 percent as of March 30, a level last seen
in February 2022, after peaking at 4.57 percent in July 2024 and declining
steadily thereafter. The share had eased to around 4.2 percent at the end of
December 2024 and further to 3.5 percent by December 2025. The combined mcap of
BSE-listed companies stood at about $4.36 trillion as of March 30, down 15
percent from $5.3 trillion at the end of December 2025 and nearly 23 percent
lower than the all-time high of $5.66 trillion recorded at the end of September
2024, according to BSE.
(Moneycontrol)
Rupee crosses 95 per dollar
despite RBI’s cap on banks' forex positions: The Indian rupee fell to a
fresh record low on March 30, despite the Reserve Bank of India’s (RBI)
direction to banks to curb excessive volatility in the rupee, signalling that
the move has not done much to prop up the currency’s prospects. The
rupee crossed the psychological important Rs 95-mark to trade at Rs 95.23 to
the dollar, before recouping marginally to end at Rs 94.83 to the dollar. RBI
said on March 27 that it has directed all banks to limit their net open
position on the Indian currency (NOP-INR) in the onshore deliverable market to
be within $100 million at the end of each business day. This has been regarded
as an unusual move by the central bank in an attempt to clamp down on currency
volatility. The RBI has directed all banks and treasury dealers to comply with
this directive by April 10.
(Moneycontrol)
India’s industrial growth
rises to 5.2% in February, led by manufacturing: With strong performance of the
manufacturing sector, industrial growth, as measured by the Index of Industrial
Production (IIP), rose to 5.2 per cent in February from 5.1 per cent in
January. According to data released by
the Statistics Ministry, the manufacturing sector’s output growth accelerated
to 6 per cent in February 2026 compared to 2.8 per cent in the year-ago month.
Mining production growth slightly improved to 3.1 per cent compared to 1.6 per
cent recorded a year ago. Power generation growth stood at 2.3 per cent in
February compared to 3.6 per cent expansion in the year-ago period.
(Business Line)
Centre’s fiscal deficit at
80.4% of FY26 target in April-Feb: The Centre’s fiscal deficit
stood at 80.4% of the annual target (Revised Estimates for FY26) during
April-February period, compared to 85.8% of the respective target a year ago,
according to the government data released on Monday. The fiscal deficit in
April-February of FY26 stood at Rs 12.52 lakh crore compared with Rs 13.46 lakh
crore in the year-ago period, the data released by the Controller General of
Accounts showed. Economists said the fiscal deficit narrowed during the period
due to a lower revenue deficit. The revenue deficit stood at 73.8% or Rs 3.88
lakh crore of the annual target during the 11-month period. The
government has pegged the fiscal deficit for FY26 at Rs 15.58 lakh crore, or
4.4% of GDP.
(Financial Express)
99.92% villages of the
country covered with banking outlets (banking branch, BC, IPPB) within 5 km
radius: The
endeavour of the Government is to ensure availability of banking outlet [Bank
branch / Business Correspondent (BC) / India Post Payments Bank (IPPB)] within
05 kilometres (kms) of all inhabited villages in the country. Availability of
banking outlets is monitored by a Geographic Information System (GIS) based
Application, namely, the Jan Dhan Darshak (JDD) App. Based on the data uploaded
by Banks on the JDD App., 99.92% villages in the country and 100% villages in
the UT of Dadra and Nagar Haveli are covered with banking outlets (Bank Branch
/ BC / IPPB) within a radius of 05 kms (as on 06.03.2026). Major impediments in
augmentation of banking infrastructure are lack of connectivity &
infrastructure alongwith non-availability of suitable premises. This
information was given by the Minister of State in the Ministry of Finance in
Lok Sabha.
(PiB)
Agri-credit flow set to
exceed a record Rs 32.5 lakh crore in FY26: Nabard: Credit to the agriculture
sector from commercial banks and regional rural banks is set to cross a record
Rs 32.5 lakh crore in FY26, driven by greater formalisation of rural lending
and rising credit demand, Shaji KV, Chairman, Nabard, said. “The credit flow is
robust, we will cross Rs 32.5 lakh crore in the current fiscal while there will
be some impact on the credit flow during February-March, which will be factored
into while projecting growth in credit flow in FY27,” Shaji told FE. He said
that there is no such thing as lack of demand for credit but more formalisation
of lending is happening. In FY25, commercial banks, cooperatives and regional
rural banks together extended Rs 28.69 lakh crore, with about 60% going to
short-term crop loans and the rest to investment credit for agriculture and
allied sectors.
(Financial Express)
Banks tighten norms as war
puts small borrowers under stress: The West Asia conflict, now
stretching beyond a month, has begun to worry banks about the vulnerability of
small borrowers, particularly SMEs and MSMEs. Banks have shifted to a more
structured and cautious lending mode as early signs of stress among small
borrowers intensify, prompting lenders to reassess their exposure even before the
full impact of the war plays out. Borrowers are now being evaluated through
four distinct lenses – temporary damage with recovery ability, permanent damage
but backed by strong corporate or industrial groups, permanent damage with weak
balance sheets, and temporary damage with low resilience..
(Financial Express)
Credit growth at
13.9% y-o-y; deposit growth dips to 10.8% as on mid-March: The annual credit growth of scheduled
commercial banks stood at 13.9%, from 14.5% as of February-end, Reserve Bank of
India (RBI) data released on Monday showed. The total bank credit as of March
15 stood at Rs 207.69 lakh crore, up merely 0.1% from a fortnight ago. The growth in deposits dipped to 10.8% y-o-y
as of March 15, from 11.9% reported a fortnight ago. Overall bank deposits
stood at Rs 250.11 lakh crore, down 0.7% on a fortnightly basis. The credit-deposit
ratio inched up to 83.04% as on March 15, from 82.39% reported a fortnight ago,
and 82.47% a month ago. Bank investments rose 3.36% y-o-y to Rs 69.23 lakh
crore as of mid-March. On a fortnightly basis, the investments were down 0.5%..
(Financial Express)
RBI defers
capital market exposure norms to July 1: The Reserve Bank of India (RBI) has
deferred the implementation of the guidelines on capital market exposures to
July 1, from the earlier April 1 deadline, it said in a press release on
Monday. It said that the extension follows representations from banks, capital
market intermediaries (CMIs) and industry bodies seeking more time and clarity
on certain operational and interpretational aspects. The final norms were
issued on February 13, after public consultation. They provided an enabling
framework for banks to finance acquisitions by Indian corporates, rationalise
lending limits against shares and units of real estate investment trusts
(REITs) and infrastructure investment trusts (InvITs), and introduce a more
principle-based framework for bank lending to CMIs.
(Financial Express)
RBI imposes
penalty on Airtel Payments Bank: The Reserve Bank of India has levied a Rs
31.8 lakh penalty on Airtel Payments Bank for failing to disclose certain
customer complaints in its financial statements for the fiscal year 2024-25.
This action follows a statutory inspection that identified non-compliance with
RBI's disclosure norms. The penalty underscores the importance of regulatory
adherence in financial reporting.
(Economic Times)
RBI mandates
7-day timeline for ECB filings, revises late fee norms: RBI has mandated that authorised dealer
Category I banks submit complete ECB returns, duly certified, within seven
calendar days of receiving them from borrowers, with effect from April 1, 2026.
Earlier, there was no fixed deadline for banks to forward ECB returns to the
RBI after receiving them from borrowers. It also clarified that LSF payments
must be made only after the central bank acknowledges receipt of the return,
with detailed instructions to be provided via email. Under the revised rules,
Form ECB 1 and its revised version will be treated as returns that do not
capture fund flows, with penalties for delayed submission to be computed
accordingly. The central bank also said that delays in filing Form ECB 2 will
attract LSF on a per-return basis, with each instance of delay under a loan
registration number treated separately. Further, banks have been tasked with
monitoring and ensuring that borrowers pay applicable penalties in case of
delays. The move is aimed at improving compliance and streamlining reporting
under FEMA.
(Business Standard)
Equities end FY26 with
worst performance in 6 years: Markets ended the final session of FY2026
sharply lower on Monday, with the Nifty 50 falling 488 points or 2.14 per cent
— marking a loss of 5.05 per cent for the full financial year — as the US-Iran
conflict entered its fifth week without any credible pathway to resolution, and
crude oil holding above $100 a barrel. It was the biggest annual decline for
equities in six years with the Nifty50 ending nearly at a one-year low and the
Sensex at a 2-year low. The Sensex fell 1,636 points. India VIX surged to an
intraday high of 28.79 before settling near 30..
(Business Line)
Bharti Airtel’s Nxtra Data
to raise $1 billion in major AI infrastructure push: Bharti Airtel-owned Nxtra Data will ?raise $1
billion from Alpha Wave Global, ?Carlyle Global, Anchorage Capital, as ?well as
its parent, ?in a deal that values the data center firm at about
$3.1 billion. The ?deal marks the latest in a string ?of investments that
Indian conglomerates ?Reliance ?and Adani have announced in ?recent months in data infrastructure as they
position the country as an ?emerging hub for ?AI development.
(Business Line)
Ministry of Heavy
Industries, DFS plan financing push for e-buses, e-trucks: The Ministry of Heavy Industries (MHI) is in
talks with the Department of Financial Services (DFS) to develop a financing
mechanism for electric buses (e-buses) and e-trucks for private operators amid
banks’ reluctance to lend, with the Small Industries Development Bank of India
(Sidbi) likely to design a model to enable credit flow, Business Standard has
learnt. The move comes at a time when the government is looking to accelerate
electric mobility amid rising crude oil prices due to the ongoing West Asia
conflict. Sidbi works under the DFS. Financing of e-buses and e-trucks remains
constrained due to limited participation by banks and NBFCs, stringent credit
norms, and a highly fragmented ownership structure, where most operators own
very small fleets, government officials stated.
(Business Standard)
Govt holds small savings
rates unchanged for April–June quarter; no change for PPF, NSC: The government on Monday kept interest rates
unchanged for various small savings schemes, including PPF and NSC, for the
eighth consecutive quarter starting April 1, 2026. “The rates of interest on
various Small Savings Schemes for the first quarter of FY 2026-27, starting
from April 1, 2026, and ending on June 30, 2026, shall remain unchanged from
those notified for the fourth quarter (January 1, 2026 to March 31, 2026) of FY
2025-26,” the finance ministry said in a notification. As per the notification,
deposits under the Sukanya Samriddhi Scheme will continue to earn 8.2 per cent
interest, while the rate on a three-year term deposit remains at 7.1 per cent. The
interest rates for the Public Provident Fund (PPF) and post office savings
deposits have been retained at 7.1 per cent and 4 per cent, respectively. The
Kisan Vikas Patra will offer 7.5 per cent interest, with investments maturing
in 115 months. The National Savings
Certificate (NSC) will continue to provide 7.7 per cent interest for the
April–June quarter.
(Moneycontrol)
IBC Amendments target
delays, governance; experts see gains but urge balance on litigation risks: The Lok Sabha on Monday passed
the IBC amendment Bill, reworked with inclusion of all 11 suggestions given by
the Select Committee, alongside additional transparency provisions highlighted
during the debate by Finance Minister Nirmala Sitharaman. The government also
added one more amendment which requires the Committee of Creditors (CoC) to
record the reasons for selection of the Successful Resolution Applicant.
(Business Line)
Over 41 lakh applications
amounting to ?1,06,306 Crores processed through Jan Samarth portal: JanSamarth portal was launched
by the Prime Minister on 6th June 2022, conceptualized with the twin objectives
of increasing the reach of the Government sponsored schemes and streamlining
the credit delivery process for all the stakeholders, through a multitude of credit
linked Government schemes. As on date, 15 credit-linked Central Government Schemes catering to
diverse sectors like agriculture, renewable energy, business activity,
livelihood, housing etc. are available on a single common platform. As
on 20th March 2026, about 254 lenders (12 Public Sector Banks, 20 Private
Sector Banks, 28 Regional Rural Banks, 173 DCCBs, 15 NBFCs and 6 SFBs) have
already been onboarded for different schemes. Since its launch, about 41.14
lakh applications amounting to ? 1,06,306 Crores have been processed through
Jan Samarth portal and Digital approval is accorded by Banks to 35.07 lakh
beneficiaries amounting to ? 84,365.55 Crores.
(PiB)
Irdai notifies Ind AS norms
for insurers; allows one-year forbearance: IRDAI issued final regulations
for the transition to Indian Accounting Standards (Ind AS), effective April 1,
2026. Under the norms, the regulator has allowed a one-year forbearance for
insurers that are unable to prepare and present financial statements in
compliance with the new standards. At present, Indian insurers follow the
Indian Generally Accepted Accounting Principles (IGAAP) framework. Insurers
seeking forbearance will have to submit their requests on or before April 30,
2026. “The competent authority may, exercise forbearance in respect of an
insurer that is unable to prepare and present financial statements in
compliance with Indian Accounting Standards. Such forbearance may be granted
for one year,” Irdai said in a gazette notification.
(Business Line)
Why RBI’s forex
cap direction has not eased rupee pressure?
The RBI’s forex cap
direction (limits on banks’ speculative positions / NDF exposure / position
limits etc.) was intended to reduce pressure on the rupee, but it has not
worked effectively due to structural reasons in the forex market rather than
regulatory limits alone.
·
Pressure is coming from
capital flows, not speculation: RBI tried to reduce speculative positions in
the forex market by restricting banks’ exposure and proprietary trading
positions. But the rupee pressure is mainly due to: FPI outflows, Higher US
bond yields, Strong US dollar globally, India’s trade deficit (oil imports), Corporate
dollar demand. So even if speculation reduces, real demand for dollars remains
high, so rupee still weakens.
·
Offshore NDF market still
influences rupee: The rupee is heavily traded in the offshore Non-Deliverable
Forward (NDF) market (Singapore, Dubai, London).
·
Importers continuously buying
dollars: These flows are structural and unavoidable, so rupee pressure
continues regardless of position limits.
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 : 94.6543
INR
/ 1 GBP : 125.6347
INR
/ 1 EUR : 109.0064
INR
/100 JPY: 59.2500
EQUITY INDEX
Sensex:
71947.55 (-1635.67)
NIFTY:
22331.40 (-488.20)
Bnk NIFTY: 50275.35 (-1999.25)
Mahavir Jayanti
(2026): In 2026, March 31 marks the birth anniversary
of Lord Mahavir, the 24th and final Tirthankara of Jainism. It is a gazetted
holiday in India, marked by processions, prayers, and acts of kindness. This
day is also observed as International Transgender Day of Visibility to raise
awareness about transgender people and celebrate their contributions.
Historical
events: March 31st marks
several significant events in Indian and world history, highlighting both
cultural milestones and major political shifts. In India, this date is
particularly notable for the 1504 birth of Guru Angad Dev Ji, the second Sikh
Guru. In 1959, the 14th Dalai Lama crossed into India and was granted political
asylum, a major geopolitical event. The date also marks the 1913 laying of the
foundation stone for the iconic Gateway of India in Mumbai and, in 1990, the
posthumous awarding of the Bharat Ratna, India's highest civilian honor, to Dr.
B.R. Ambedkar. Furthermore, on March 31, 1921, the flag of the Indian National
Congress was adopted. Internationally,
March 31 is renowned as the day the Eiffel Tower was inaugurated in 1889.
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