Category: Press Releases

The results of the auctions of 4.48% Government Stock, 2023 (Re-Issue), GOI FRB, 2033 (Re-Issue), 6.22% Government Stock, 2035 (Re-Issue) and 6.67% Government Stock, 2050 (Re-Issue) held on February 26, 2021 are:

Ajit Prasad
Director   

Press Release: 2020-2021/1169

Data on sectoral deployment of bank credit collected from select 33 scheduled commercial banks, accounting for about 90 per cent of the total non-food credit deployed by all scheduled commercial banks, for the month of January 2021 are set out in Statements I and II.

Highlights of the sectoral deployment of bank credit are given below:

• On a year-on-year (y-o-y) basis, non-food bank credit growth stood at 5.7 per cent in January 2021 as compared to 8.5 per cent in January 2020.

• Continuing its uptrend, credit growth to agriculture and allied activities accelerated to 9.9 per cent in January 2021 from 6.5 per cent in January 2020.

• Credit to industry contracted by 1.3 per cent in January 2021 as compared to 2.5 per cent growth in January 2020 mainly due to contraction in credit to large industries by 2.5 per cent (2.8 per cent growth in January 2020). Credit to medium industries registered a robust growth of 19.1 per cent in January 2021 as compared to 2.8 per cent a year ago and credit to micro & small industries registered a growth of 0.9 per cent in January 2021 as compared to 0.5 per cent a year ago.

• Within industry, credit to ‘mining & quarrying’, ‘food processing’, ‘textile’, ‘gems & jewellery’, ‘petroleum, coal products & nuclear fuels’, ‘paper & paper products’, ‘leather & leather products’, and ‘vehicles, vehicle parts & transport equipment’ registered accelerated growth in January 2021 as compared to the growth in the corresponding month of the previous year. However, credit growth to ‘rubber plastic & their products’, ‘beverages & tobacco’, ‘chemicals & chemical products’, ‘basic metal & metal products’, ‘construction’ and ‘infrastructure’ decelerated/contracted.

• Credit growth to the services sector decelerated moderately to 8.4 per cent in January 2021 from 8.9 per cent in January 2020. However, credit to ‘transport operators’ and ‘trade’ continued to perform well during the month, registering accelerated growth.

• Personal loans growth decelerated of 9.1 per cent in January 2021 from 16.9 per cent in January 2020.

Ajit Prasad
Director   

Press Release: 2020-2021/1168

Reserve Bank of India announces the auction of Government of India Treasury Bills as per the following details:

The sale will be subject to the terms and conditions specified in the General Notification F.No.4(2)-W&M/2018 dated March 27, 2018 along with the Amendment Notification No.F.4(2)-W&M/2018 dated April 05, 2018, issued by Government of India, as amended from time to time. State Governments, eligible Provident Funds in India, designated Foreign Central Banks and any person or institution specified by the Bank in this regard, can participate on non-competitive basis, the allocation for which will be outside the notified amount. Individuals can also participate on non-competitive basis as retail investors. For retail investors, the allocation will be restricted to a maximum of 5 percent of the notified amount.

The auction will be Price based using multiple price method. Bids for the auction should be submitted in electronic format on the Reserve Bank of India’s Core Banking Solution (E-Kuber) system on Wednesday, March 03, 2021, during the below given timings:

Results will be announced on the day of the auction.

Payment by successful bidders to be made on Thursday, March 04, 2021.

Only in the event of system failure, physical bids would be accepted. Such physical bids should be submitted to the Public Debt Office (email; Phone no: 022-22632527, 022-22701299) in the prescribed form obtainable from RBI website (https://www.rbi.org.in/Scripts/BS_ViewForms.aspx) before the auction timing ends. In case of technical difficulties, Core Banking Operations Team should be contacted (email; Phone no: 022-27595666, 022-27595415, 022-27523516). For other auction related difficulties, IDMD auction team can be contacted (email; Phone no: 022-22702431, 022-22705125).

Ajit Prasad
Director   

Press Release: 2020-2021/1167

The above information can be accessed on Internet at https://wss.rbi.org.in/

The concepts and methodologies for WSS are available in Handbook on WSS (https://rbi.org.in/scripts/PublicationsView.aspx?id=15762).

Time series data are available at https://dbie.rbi.org.in

Ajit Prasad
Director   

Press Release: 2020-2021/1166

Ajit Prasad
Director   

Press Release: 2020-2021/1162

Reserve Bank had released the framework for authorisation of pan-India Umbrella Entity for retail payments on August 18, 2020 and invited applications from desirous entities. Given the process involved for complying with the framework prescriptions, a timeline of six months was provided therefor, i.e., up to February 26, 2021.

2. Requests have been received from various stakeholders including Indian Banks’ Association for extending the timeline, keeping in view the COVID-19 related disruptions and inconveniences. It has been accordingly decided to extend the timeline for making the application up to March 31, 2021.

Ajit Prasad
Director   

Press Release: 2020-2021/1161

Today, the Report on Currency and Finance (RCF) for the year 2020-21 was released by the RBI. First published in 1937, the RCF adopted a theme-based approach from 1998-99. After a hiatus between 2014 and 2019, the Report has been revived with this release. The theme of the Report is “Reviewing the Monetary Policy Framework” which assumes topical relevance in the context of the review of the inflation target by March 2021 against the backdrop of structural changes in the macroeconomic and financial landscape that have prompted several central banks to undertake policy framework reviews. The period of study in this report is from October 2016 to March 2020 commencing with the formal operationalisation of the flexible inflation targeting (FIT) framework in India but excluding the period of the COVID-19 pandemic in view of data distortions.

The Report carries a Foreword from the Governor, Reserve Bank of India. The contents of the Report, its findings, views and conclusions are entirely those of the contributors and do not represent the views of the Reserve Bank.

Highlights

• In the international experience, inflation targeting emerging market economies (EMEs) have generally lowered their inflation targets and narrowed tolerance bands.

• During the period under review, headline CPI inflation averaged 3.9 per cent in India with a decline in inflation volatility, attesting to the success of FIT in terms of its primary mandate.

• Trend inflation to which actual inflation converges after a shock provides an appropriate benchmark for the inflation target; trend inflation has fallen from above 9 per cent before FIT to a range of 3.8 – 4.3 per cent during FIT, indicating that 4 per cent is the appropriate level of the inflation target for India.

• Threshold inflation above which growth is unambiguously impaired ranges between 5 and 6 per cent in India, indicating that an inflation rate of 6 per cent is the appropriate upper tolerance limit for the inflation target. On the other hand, a lower bound above 2 per cent can lead to actual inflation frequently dipping below the tolerance band while a lower bound below 2 per cent will hamper growth, indicating that an inflation rate of 2 per cent is the appropriate lower tolerance bound.

• The current numerical framework for defining price stability, i.e., an inflation target of 4 per cent with a +/-2 per cent tolerance band, is appropriate for the next five years.

• The institutional architecture of FIT in India, including the size of the monetary policy committee (MPC) and its composition, the decision making process, communication practices and accountability mechanisms is in line with international best practices, while the definition of the time horizon of failure, processes of onboarding of MPC members, some aspects of forward guidance and timings relating to release of minutes, shut periods and release of transcripts warrant a review.

• During the FIT period, monetary transmission has been full and reasonably swift across the money market but less than complete in the bond markets; while there has been an improvement in transmission to lending and deposit rates of banks, external benchmarks across all categories of loans and deposits could improve transmission further.

• In the conduct of monetary policy in an open economy setting, foreign exchange reserves and associated liquidity management are key; hence, there is a need to enhance the RBI’s sterilisation capacity to deal with surges in capital flows.

• The primary focus of FIT on price stability augurs well for further liberalisation of the capital account and eventual internationalisation of the Indian rupee.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2020-2021/1159