Category: Press Releases

Preliminary data on India’s balance of payments (BoP) for the third quarter (Q3), i.e., October-December 2020-21, are presented in Statements I (BPM6 format) and II (old format).

Key Features of India’s BoP in Q3:2020-21

• India’s current account balance recorded a deficit of US$ 1.7 billion (0.2 per cent of GDP) in Q3:2020-21 after a surplus of US$ 15.1 billion (2.4 per cent of GDP) in Q2:2020-21 and US$ 19.0 billion (3.7 per cent of GDP) in Q1:2020-21; a deficit of US$ 2.6 billion (0.4 per cent of GDP) was recorded a year ago [i.e. Q3:2019-20].

• Underlying the current account deficit in Q3:2020-21 was a rise in the merchandise trade deficit to US$ 34.5 billion from US$ 14.8 billion in the preceding quarter, and an increase in net investment income payments.

• Net services receipts increased, both sequentially and on a year-on-year basis, primarily on the back of higher net export earnings from computer services.

• Private transfer receipts, mainly representing remittances by Indians employed overseas, declined marginally on a y-o-y basis but improved sequentially by 1.5 per cent to US$ 20.7 billion in Q3:2020-21.

• Net outgo on the primary income account, primarily reflecting payments of investment income, increased to US$ 10.1 billion from US$ 7.4 billion a year ago.

• In the financial account, net foreign direct investment (FDI) recorded robust inflow of US$ 17.0 billion as compared with US$ 9.7 billion in Q3:2019-20.

• Net foreign portfolio investment (FPI) was US$ 21.2 billion as compared with US$ 7.8 billion in Q3:2019-20, primarily reflecting net purchases by foreign portfolio investors in the equity market.

• With repayments exceeding fresh disbursals, external commercial borrowings to India recorded net outflow of US$ 1.7 billion in Q3:2020-21 as against an inflow of US$ 3.2 billion a year ago.

• Net accretions to non-resident deposits increased to US$ 3.0 billion from US$ 0.8 billion in Q3:2019-20.

• There was an accretion of US$ 32.5 billion to the foreign exchange reserves (on a BoP basis) as compared with that of US$ 21.6 billion in Q3:2019-20 (Table 1).

BoP during April-December 2020

• India recorded a current account surplus of 1.7 per cent of GDP in April-December 2020 as against a deficit of 1.2 per cent in April-December 2019 on the back of a sharp contraction in the trade deficit.

• Net invisible receipts were lower in April-December 2020 due to a moderation in net private transfer receipts and an increase in investment income payments.

• Net FDI inflows at US$ 40.8 billion in April-December 2020 were higher than US$ 31.1 billion in April-December 2019.

• Net FPI inflows stood at US$ 28.9 billion in April-December 2020, higher than US$ 15.1 billion a year ago.

• In April-December 2020, there was an accretion of US$ 83.9 billion to the foreign exchange reserves (on a BoP basis).

(Yogesh Dayal)     
Chief General Manager

Press Release: 2020-2021/1330

Today, the Reserve Bank released its quarterly house price index (HPI)¹ (base: 2010-11=100) for Q3:2020-21, based on transaction level data received from housing registration authorities in ten major cities (viz., Ahmedabad, Bengaluru, Chennai, Delhi, Jaipur, Kanpur, Kochi, Kolkata, Lucknow and Mumbai). Time series on all-India and city-wise HPI are available at the Bank’s Database of Indian Economy (DBIE) portal (https://dbie.rbi.org.in/DBIE/dbie.rbi?site=statistics > Real Sector > Price & Wages > Quarterly).

Highlights:

• The annual growth (y-o-y) in all-India HPI remained low at 1.1 per cent in Q3:2020-21, similar to the previous quarter but lower than 3.0 per cent a year ago. HPI growth (y-o-y) across major cities varied widely from an increase of 6.0 per cent (Bengaluru) to a contraction of (-) 7.7 per cent (Kochi).

• The all-India HPI increased by 1.2 per cent in Q3:2020-21 over the previous quarter; Chennai, Delhi, Bengaluru and Lucknow recorded sequential (q-o-q) increase in HPI while it contracted for other cities.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2020-2021/1329

¹Compiled in the Department of Statistics and Information Management, Reserve Bank of India. Reference may be made to the article “House Price Index: 2010-11 to 2013-14” in October 2014 issue of the RBI Bulletin (weblink: https://www.rbi.org.in/Scripts/BS_ViewBulletin.aspx) for HPI compilation methodology.

Today, the Reserve Bank released its web publication entitled ‘Quarterly Basic Statistical Returns (BSR)-1: Outstanding Credit of Scheduled Commercial Banks (SCBs), December 2020’ on its Database on Indian Economy (DBIE) portal (web-link: https://dbie.rbi.org.in/DBIE/dbie.rbi?site=publications#!12). It captures various characteristics of bank credit such as occupation/activity and organisational sector of the borrower, type of account, and interest rates. Data covering 1,26,862 branches of 88 SCBs (excluding Regional Rural Banks) are presented for bank groups, population groups and states¹.

Highlights:

• Personal loans, which accounted for one fourth of total bank credit, continued to record double-digit growth; industrial loans remained in contraction zone.

• Among the institutional sectors, growth in credit to the household sector² was sustained and its share in total credit increased to 52.3 per cent in December 2020 (50.3 per cent in December 2019).

• Private corporate sector recorded negative growth in bank credit (y-o-y) for the fifth successive quarter, reflecting tepid demand conditions; the share of private corporate sector in total credit declined to 28.5 per cent in December 2020 as compared with 31.4 per cent a year ago and 34.5 per cent two years ago.

• Weighted average lending rate (WALR) for outstanding credit declined by 87 basis points over the last one year, including 23 basis points easing during the latest quarter.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2020-2021/1327

In August 2019, the Reserve Bank of India (RBI) had issued a framework for processing of e-mandates on recurring online transactions. Initially applicable to cards and wallets, the framework was extended in January 2020 to cover Unified Payments Interface (UPI) transactions as well.

The requirement of Additional Factor of Authentication (AFA) has made digital payments in India safe and secure. In the interest of customer convenience and safety in use of recurring online payments, the framework mandated use of AFA during registration and first transaction (with relaxation for subsequent transactions up to a limit of ₹2,000, since enhanced to ₹5,000), as well as pre-transaction notification, facility to withdraw the mandate, etc. The primary objective of the framework was to protect customers from fraudulent transactions and enhance customer convenience. Based on a request from Indian Banks’ Association (IBA) for an extension of time till March 31, 2021, to enable the banks to complete the migration, Reserve Bank had advised the stakeholders in December 2020 to migrate to the framework by March 31, 2021. Thus, adequate time was given to the stakeholders to comply with the framework.

It is, however, noted that the framework has not been fully implemented even after the extended timeline. This non-compliance is noted with serious concern and will be dealt with separately. The delay in implementation by some stakeholders has given rise to a situation of possible large-scale customer inconvenience and default. To prevent any inconvenience to the customers, Reserve Bank has decided to extend the timeline for the stakeholders to migrate to the framework by six months, i.e., till September 30, 2021. Any further delay in ensuring complete adherence to the framework beyond the extended timeline will attract stringent supervisory action. A circular advising the above is being issued by the Reserve Bank today.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2020-2021/1326

Ajit Prasad
Director   

Press Release: 2020-2021/1324

As per Section 45 Z I of Reserve Bank of India Act, 1934, it has been decided that the Monetary Policy Committee will meet during 2021-22 on the dates as indicated below:

(Yogesh Dayal)     
Chief General Manager

Press Release: 2020-2021/1323

The Reserve Bank of India has today communicated that the applicable average base rate to be charged by Non-Banking Financial Company – Micro Finance Institutions (NBFC-MFIs) to their borrowers for the quarter beginning April 1, 2021 will be 7.81 per cent.

It may be recalled that the Reserve Bank had, in its circular dated February 7, 2014, issued to NBFC-MFIs regarding pricing of credit, stated that it will, on the last working day of every quarter, advise the average of the base rates of the five largest commercial banks for the purpose of arriving at the interest rates to be charged by NBFC-MFIs to their borrowers in the ensuing quarter.

Ajit Prasad
Director   

Press Release: 2020-2021/1322