credit and monetary policy of rbi.pptx

7/23/2019 Credit and Monetary Policy of RBI.pptx

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Credit and

Monetary Policy ofRBI

Presented By:

Pragya SharmaRoll No- 12



MONE!R" PO#IC"

2$1%-1&



MONETARY DEVELOPMENT

DURING 2014-15• he Reser'e Ban( of India )RBI*

ado+ted the ne, Consmer Price Inde.)com/ined* as the measre of thenominal anchor )headline CPI* for+olicy commnication0

• Policy rates ,ere (e+t nchanged

dring the year till anary 2$1&0 In 'ie, of contining easing of inationary+ressres3 on 1& anary 2$1& the RBIredced the +olicy re+o rate nder theli4idity ad5stment facility )#!6* from70$ +er cent to 808& +er cent



#I9I;I" CON;IIONS

#i4idity conditions ha'e remained /roadly /alanced dring 2$1%-1e.ce+t tem+orary tight conditions de to delayed go'ernment e.+en

ight li4idity conditions ,ere ,itnessed in March 2$1% /t im+ro'91 2$1%-1& de to decline in go'ernment cash /alances0

Slo,er +aced gro,th in credit o<-ta(e in com+arison to de+osit mo/

and dra,do,n of go'ernment cash sr+ls hel+ed ease li4idity +refrom !gst0

he narro,ing ga+ /et,een credit and de+osit gro,th ),hich trnenegati'e in !gst 2$1%*3 also hel+ed redce the +ressre on li4iddring this +eriod0



Development !n Gove"nment Se#$"!tM%"&et

• he ten-year go'ernment /ond reects the long end of the yiel

• he +rimary factors res+onsi/le for easing in yields )6igres >0>0>* inclde

Positi'e mar(et sentiment on accont of e.+ectations from thesta/le go'ernment at the centre3

hree-year lo, retail ination readings in decem/er 2$1%3

Signi?cant correction in commodity +rices and

6irm commitment sho,n /y the go'ernment on the ?scal front

+ gradation of otloo( /y so'ereign credit rating agency S @P



Inte"et R%te o' S()

*e+#l$,!n Re!on%l R$"%l )%n&he transmission of changes in +olicy rate to de+osit and lending rates of /

remained mted in 2$1%-1& so far3 reecting the +resence of strctral rigthe credit mar(et3 ,ea( +ricing +o,er of /an(s3 and asset 4ality concerns

;ring 2$1%-1& till ;ecem/er3 the median-term de+osit rates of /an(s acromatrities declined modestly3 reecting comforta/le li4idity conditions ass/ded credit demand0 he ,eighted a'erage lending rate )A!#R* declin

marginally3 reecting ,ea( +ricing +o,er of /an(s3 o<set +artly /y asset 4concerns +rom+ting /an(s to charge higher ris( +remims0

;ring 2$$8 to 2$1>3 real +olicy interest rates ,ere consistently negati'e0 sitation had /een re'ersed /y the end of 2$1>3 ,hen real interest rates stclim/ing into +ositi'e territory3 and they no, stand a/o'e 2 +er cent )on a month for,ard- loo(ing /asis*0



Pe"'o"m%n#e o' S()

• he ca+ital to ris( ,eighted assets ratio )CR!R* at system le'el1>0$2 +er cent as at end March 2$1% )Basel-III*0 It mo'ed to 12cent in Se+tem/er 2$1%0

• he reglatory re4irement for CR!R is +er cent for 6" 2$1&0decline in ca+ital +ositions at aggregate le'el3 ho,e'er3 ,as on

of deterioration in ca+ital +ositions of PSBs0• Ahile the CR!R of the schedled commercial /an(s )SCB* at 12

cent as of Se+tem/er 2$1% is satisfactory3 going for,ard the /asector3 +articlarly PSBs ,ill re4ire s/stantial ca+ital to meetreglatory re4irements ,ith res+ect to additional ca+ital /<e



Pe"'o"m%n#e o' S()

• !sset 4ality of PSBs has come nder stress in recent times0 !s +er the RB6inancial Sta/ility Re+ort );ecem/er 2$1%*3the gross non+erforming ad'an)DNP!* of schedled commercial /an(s as a +ercentage of the total gross aincreased to %0& +er cent in Se+tem/er 2$1% from %01 +er cent in March 2$Stressed ad'ances increased to 1$08 +er cent of the total ad'ances from 1$cent /et,een March and Se+tem/er 2$1%0

• !sset 4ality of PSBs has come nder stress in recent times0 !s +er the RB6inancial Sta/ility Re+ort );ecem/er 2$1%*3the gross non+erforming ad'an)DNP!* of schedled commercial /an(s as a +ercentage of the total gross aincreased to %0& +er cent in Se+tem/er 2$1% from %01 +er cent in March 2$Stressed ad'ances increased to 1$08 +er cent of the total ad'ances from 1$cent /et,een March and Se+tem/er 2$1%0



Pe"'o"m%n#e o' S()

• he stress tests sggest that the asset 4ality of /an(s may im+ro'e in the near ftre nder e+ositi'e de'elo+ments in the macroeconomic en'ironment and /an(s may /e a/le to meet e.+e,ith their e.isting le'el of +ro'isions0 he PSBs contine to /e nder stress on accont of theilending0 a(ing DNP! and restrctred ad'ances together3 the stress on PSBs is 120&8 +er cenad'ances as on Se+tem/er 2$1%0

• he RBI has ta(en a nm/er of ste+s to resol'e the NP! isse0 In anary 2$1%3 it came ot ,igidelines on Early Recognition of Financial Distress, Prompt steps for Resolution an

Recovery for Lenders: Framework for Revitalizing Distressed Assets in te Economy 3

/an(s ha'e to start acting as soon as a sign of stress is noticed in a /orro,ers actions and notto /ecome an NP!0

• he RBI has also issed gidelines to /ring e.i/ility in +ro5ect loans to infrastrctre and cor+ro5ects3 /oth e.isting and ne,0o,ards strengthening reco'ery from non-coo+erati'e /orro,ehas tightened the norms for asset reconstrction com+anies )!RC* in !gst 2$1%3 ,here/y thin'estment in secrity recei+ts shold /e 1& +er cent3 as against the earlier norm of & +er cen



NON-)AN/ING INAN(IAL

(OMPANIES• Non-/an(ing ?nancial com+anies )NB6Cs* ha'e e'ol'ed as im+ortant ?nancial

intermediaries +articlarly for the small-scale and retail sectors0 NB6Cs as a ,hacconted for 1>01 +er cent of /an( assets and $02 +er cent of /an( de+osits asMarch 2$1%0

• here are t,o /road categories of NB6Cs /ased on ,hether they acce+t +/lic 'i=03 de+osit-ta(ing NB6Cs )NB6C-;* and non-de+osit-ta(ing NB6Cs )NB6C-N;the emergence of large si=ed NB6Cs3 the reglatory focs has gradally increassystemically im+ortant NB6Cs )NB6Cs-N;-SI*3i0e0 ,ith asset si=e &$$ crore and

• #oans and ad'ances /y NB6Cs ,itnessed a gro,th of 1>01 +ercent dring 2$1>RBI has issed a re'ised reglatory frame,or( for NB6Cs in No'em/er 2$1%3 aare increasingly e.+osed to ris(s arising ot of conter+arty failres3 fnding aconcentration3 and interest rate mo'ement and ris(s +ertaining to li4idity and



DEVELOPMENTS IN(APITAL MAR/ETS



PRIM!R" M!RFE

• ;ring !+ril-;ecem/er 2$1%3 resorcemo/ili=ation throgh the +rimary mar(ete.hi/ited mi.ed +atterns ,ith e4ity andde/t isses declining and +ri'ate+lacements of cor+orate /onds increasing3on year-on-year /asis0 !s +ri'ate+lacements of cor+orate /onds accont

for the lions share3 total mo/ili=ationincreased dring the +eriod0

• he nm/er and 'ale of +ri'ate+lacements increased /oth in the NationalStoc( E.change )NSE* and Bom/ay Stoc(E.change )BSE* dring the +eriod0



Se#on,%" M%"&et

• he /enchmar( indices3 BSE Sense. and Nifty sho,general +,ard trend in the crrent year so far3 clos283% and 727> res+ecti'ely as on >1 ;ecem/er 2$,ith corres+onding gro,th rates of 20 and >10% +e

cent3 year on year 0• he Indian indices are among the /etter +erforming

,orld



($""en# %n, Inte"et R%te

De"!v%t!ve• Most e.changes sa, a decline in trading 'olmes in the crren

deri'ati'es segment0

• rading in cash-settled interest rate ftres contracts on ten-yDo'ernment of India secrities commenced in anary 2$1%0



o"e!n Po"t'ol!o Invetment

• Aith the commencement of the foreign +ortfolio in'estment )6PI* regifrom 1 ne 2$1%3 the erst,hile foreign instittional in'estors )6IIs*3 S

!cconts and 4ali?ed foreign in'estors )96Is* ha'e /een merged intoin'estor class termed foreign +ortfolio in'estors0

• he total net 6PI ino,s dring !+ril-;ecem/er 2$1% stood at S G >2million com+ared to an oto, of S G &> million in the corres+ondi+eriod of 2$1>-1%0 In$"%n#e Se#to"

• In India3 insrance +enetration has gro,n from 20> +er cent )life 107 +erand non-life $08 +er cent* in 2$$$ to >0 +er cent )life >01 +er cent and n

$07 +er cent* in 2$1>0• he life insrance +enetration le'el com+ares ,ell ,ith the emerging m

economies0 ;ring 2$1>-1%3 the life insrance indstry recorded a +remincome of H >31%327> crore as against H 237832$2 crore in the +re'ios ?n

year3 registering a gro,th of 0% +er cent0

• Ahile +ri'ate-sector insrers +osted 10% +er cent decline in their +remiincome3 #ife Insrance Cor+oration of India )#IC* recorded 1>0& +er cendring the +eriod0 On the /asis of total +remim income3 the mar(et sha#IC increased from 8208 +er cent in 2$12-1> to 8&0% +er cent in 2$1>-1%



PENSION SE(TOR

• he National Pension System )NPS* ,hich ,as initially introdced for the ne, recrits , 5oined central go'ernment ser'ice )e.ce+t armed forces at ?rst stage* ,ith e<ect from 1 2$$%3 has /een s/se4ently e.tended to atonomos /odies3 state go'ernments3 and thnorgani=ed sector0

• Barring t,o States3 all the States ha'e since come nder the am/it of the NPS0 6rom 1 Mthe NPS ,as o+ened + for all citi=ens in India to 5oin on a 'olntary /asis0 ill >1 ;ecema total of 8081 la(h mem/ers ha'e /een enrolled nder the NPS ,ith a cor+s of H 8>3 $

•

!ssets nder management nder the NPS ha'e ,itnessed an increase from H %731> crorMarch 2$1% to H 823$$$ crore as on >1 ;ecem/er 2$1%3 registering an increase of %0 +

• he S,a'alam/an Scheme3 a co-contri/tory +ension scheme lanched in 2$1$ for +ersonorgani=ed sector3 is no, o+en to those citi=ens of India ,ho are not +art of any +ensio+ro'ident fnd scheme0 ! total of 02 la(h s/scri/ers ha'e already /een enrolled ndescheme till >1 ;ecem/er 2$1% dring 6" 2$1%-1&0



CRE;I PO#IC"

2$1%-1&



he RBI (e+t +olicy rates nchanged dring till anary 2$1&0 Aith the easing of in

conditions3the RBI has signaled softeningmonetary +olicy stance /y ctting +olicy re+o2& /asis +oints to 808& +ercent in anary 2$1&

S/se4ently3 the RBI also redced the li4idity ratio )S#R* /y &$ /asis +oints from

cent of net demand and time lia/ilities )N;#+er cent0 he RBI ado+ted the ne, CPI )com/the measre of the nominal anchor - focommnication from !+ril 2$1%0

credit and monetary policy of rbi.pptx

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