By allowing a broader set of entities in the banking sector, the Reserve Bank of India (RBI) has shown that it has a balanced as well as practical approach and that it is not pre-judged against anyone, financial sector analysts say.
In its final guidelines, the RBI allowed public sector entities, existing non-banking finance companies, as well as private groups including brokerages and real estate giants to apply for a banking licence.
Besides public sector entities and existing non-banking finance companies, private conglomerates including brokerages and real estate giants will be able to apply for a banking licence, according to the Reserve Bank of India's
(RBI's) final guidelines.
In its final guidelines on new banking licences, released on Friday, the central bank allowed entities that have a considerable presence in the real estate and broking sectors to set up a bank through a wholly-owned Non-Operative Financial Holding Company (NOFHC).
Banks should increase their gold jewellery loans portfolio to rein in huge imports of gold, a working committee set up by the Reserve Bank of India (RBI) suggested.
The working committee was set up by the central bank to make suggestions to fix issues related to huge gold imports and gold loans provided by non-banking finance companies (NBFCs).
The working group said in its report that increasing gold jewellery loans portfolio by banks would greatly facilitate monetisation of large stocks of gold.
The Bank of Baroda (BoB) stock slipped nearly eight per cent before closing down 7.5 per cent at Rs 802 a share on Monday, as against just 0.15 per cent decline in Sensex, after the bank reported a fall of 22 per cent fall in its net profit for the December 2012 quarter.
The steep fall in the net profit during the quarter was led by the steep increase in provisions that jumped 23 per cent year-on-year to Rs settle at 1,029 crore.
Most bankers expect the Reserve Bank of India (RBI) to slash its key repo rate - the rate at which the central bank lends to commercial banks - by 25 basis points, while a fraction of the bankers are anticipating even a bigger cut.
The RBI is all set to announce its decision during the much-awaited monetary policy review meet today, January 29.
A recent poll of 18 banks, 80 per cent of the bankers predicted that the RBI would cut its key repo rate by 25 basis points from the current 8 per cent, while 15 per cent of the bankers said they anticipated a bigger 50 bps cut.
Most analysts expect the Reserve Bank of India (RBI) to cut the repo rate by 25 basis points in its monetary policy review on Tuesday, but there are some who the central bank to turn adventurous and announce a cut of 50 basis points.
Releasing the central bank's monetary policy review in October and December last year, Governor Duvvuri Subbarao had dropped strong hints that the softening of interest rates could allow the central bank to announce a cut in repo rate in January.
The Reserve Bank of India (RBI) is widely expected to announce a cut in repo rate next week for the first time in nine months.
Analysts are of the view that the government is finally playing its part to boost the economic growth that has declined to its slowest pace of in a decade.
Samiran Chakrabarty, chief of research at Mumbai-based Standard Chartered Bank, "The government has gone ahead with all the promises it had made 3 to 4 months earlier. There have been pretty substantial measures on the fiscal deficit front. To an extent, that will be comforting for the RBI."
Analysts expect the Reserve Bank of India (RBI) to announce a cut of at least 25 basis points (bps) in the policy repo rate later this month if core inflation remains below 5 per cent.
The headline inflation figure is still high, mainly because of high food prices; but core inflation (non-food manufacturing) has been falling for the past few months. In November, core inflation was 4.5 per cent.
Bank of America Merrill Lynch raised its target price for Tata Motors stock by 26 per cent to Rs 360, and upgraded the stock from `neutral' to `buy', thanks to the strong performance by the auto giant's luxury brand Jaguar Land Rover (JLR) in 2012.
Among the 30-share SENSEX stocks, Tata Motors was the best performer in 2012. According to the recently released figures, Tata Motors sold a total of 47,515 commercial vehicles, 37,649 light commercial vehicles and 9,866 medium & heavy commercial vehicles in December.
India's Current Account Deficit (CAD) jumped to 5.4 per cent of the gross domestic product (GDP) in the July to September quarter of 2012-13, from 4.2 per cent in corresponding period of the previous year, the Reserve Bank of India (RBI) confirmed on Monday.
In its report on developments in the country's Balance of Payments (BoP) position, the RBI said, the CAD jumped to $22.3 billion in the second quarter of current financial year, from $16.4 billion in the preceding three months and $18.9 billion in the corresponding three months of the previous year.