The Reserve Bank of India's Monetary Policy Committee (MPC) concluded its meeting today, June 6, 2025, implementing significant measures to stimulate economic growth and manage inflation.
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1 day ago WHAT? Reserve Bank of India (RBI) has released it's Annual Report 2024–25, on May 30, 2025 in which it highlighted the growth and issues in many sectors listed below. Economic Performance GDP Growth: India's GDP grew by 6.5% in FY25, maintaining its status as the world's fastest-growing major economy. Agriculture: GVA increased by 4.6%, up from 2.7% the previous year. Industry: Growth slowed to 4.3%. Services: Expanded by 7.5%, contributing 64.1% to GVA. RBI...
1 day ago SUMMARY The Reserve Bank of India (RBI) is considering widening the policy rate corridor to 75 basis points (bps) to encourage banks to increase lending. This move aims to enhance monetary transmission and stimulate economic activity. The policy rate corridor is the range between the Standing Deposit Facility (SDF) rate and the Marginal Standing Facility (MSF) rate, with the repo rate at the center. By widening this corridor, the RBI seeks to make it less attractive for banks to park excess funds with the central bank...
3 days ago SUMMARY The Reserve Bank of India (RBI) has proposed new guidelines to regulate gold loans, aiming to enhance transparency, mitigate risks, and standardize lending practices across banks and non-banking financial companies (NBFCs). What are the Proposed Regulatory Measures? Loan to Value (LTV) Ratio Cap: The maximum LTV ratio is proposed to be capped at 75%, including accrued interest for bullet repayment loans. Collateral Eligibility: Only gold jewellery and specified bank-issued gold coins...
5 days ago WHAT IS FAR? The Fully Accessible Route (FAR) is a regulatory framework introduced by the Reserve Bank of India (RBI) and the Government of India in March 2020 to attract more foreign investment into Indian government securities (G-Secs). KEY FEATURES Feature Details Purpose To enable unrestricted access for Non-Resident Investors (FPIs) Eligible Securities Specific Government of India bonds are designated under FAR Access Type No...
6 days ago SUMMARY India's foreign exchange reserves experienced a significant increase of $6.99 billion, reaching a total of $692.72 billion for the week ending May 23, 2025, according to data released by the Reserve Bank of India (RBI) . Key Components of the Increase Foreign Currency Assets (FCA): The largest component of the reserves, FCAs rose by $4.52 billion to $586.17 billion. These assets are influenced by the valuation changes of major currencies like the euro, pound, and yen against the US...
May 30 SUMMARY India's GDP growth for the fourth quarter of FY2024–25 is projected to be around 7%, driven by robust rural demand, increased government spending, and improved agricultural output. However, the full fiscal year growth is expected to settle at approximately 6.3%, slightly below earlier estimates. Q4 FY2024–25 Growth Estimates Reuters projects 6.7% growth, citing stronger rural consumption and state expenditure, despite subdued private investment. ICRA estimates...
May 26 WHY IN NEWS? Reserve Bank of India (RBI) has transferred a dividend of 2.69 lakh crores to the government for the financial year 2024-25 marking a 50% increase from the ₹2.1 lakh crore distributed in the previous fiscal year. The RBI is a not-for-profit organization then how did it make such huge profits to transfer this huge dividend to the government? SOURCES OF RBI'S INCOME? The Reserve Bank of India's (RBI) surplus primarily originates from its core operations, including interest...
May 26 DEFINITION Seigniorage is the profit a government earns by issuing currency, particularly the difference between the face value of money and its production cost. It is also the revenue the government earns by printing money instead of borrowing or taxing. Seigniorage = Face Value of Currency − Cost to Produce & Distribute It EXAMPLE It costs the RBI about ₹3 to print a ₹100 note. So, the seigniorage = ₹100 − ₹3 = ₹97. That ₹97 is essentially profit for the government, because...
May 26 DEFINITION Primary Dealers (PDs) are financial institutions authorized by the Reserve Bank of India (RBI) to underwrite and participate directly in the auction of government securities, including Treasury Bills (T-Bills) and Dated Securities (G-Secs). The Reserve Bank of India (RBI) designates certain institutions as Primary Dealers (PDs) to strengthen the government securities (G-Sec) market. TYPES These PDs are categorized into two types: Standalone Primary Dealers: Non-bank entities that...
May 20 WHAT IS A COOPERATIVE BANK? A cooperative bank is a financial institution that is owned and controlled by a group of people who are also customers of the bank. These banks follow the cooperative principle of one person, one vote, and provide services such as savings and loans to both members and non-members. Cooperative banks were initially established to provide credit to members and liberate the underprivileged from the clutches of unscrupulous moneylenders who demanded exorbitant interest rates. Cooperative...
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