India’s central bank raises overseas borrowing limit for companies to $ 750 million

India’s finance minister defends petrol price rise and interest rate hike by RBI
Union Finance Minister Pranab Mukherjee said that petrol price rise was inevitable because of a steep increase in price of crude oil in the international market. He said that the price of crude oil has gone up by 5 to 6 times in a decade. Mukherjee was speaking to reporters in Mumbai after addressing a review meeting of the West Zone.

He also defended the Reserve Bank's decision to hike the key interest rates by 25 basis points, saying that it was aimed at taming the inflation. "Normally it (monetary policy) is formulated in consultation with the government, and fiscal policy and monetary p

Home and auto loan set to become expensive as RBI goes for rate hike to tame inflation
The Reserve Bank of India has raised the repo rate and reverse repo rate by 25 basis points in its mid-quarter monetary policy review to check inflation. Indian economy is experiencing stubbornly higher inflation for considerable period. The bank has decided to sacrifice the growth despite pressure from industry bodies and the government. It justified its action and said that in the current scenario, with the likelihood of inflation remaining high for the next few months, rising inflationary expectations remain a key risk and this makes it imperative to persevere with the current anti-inflatio

RBI says committed to reducing CRR, SLR rates says RBI Governor
The Reserve Bank of India is committed to bringing down the cash reserve ratio (CRR) and statutory liquidity ratio (SLR) in a "calibrated manner" to increase availability of credit, says D Subbarao, the Governor of the bank. He said, "It's not that SLR should be thrown away but certainly we should bring it down, so that there is credit availability and the private sector is not crowded out."

RBI has kept the CRR unchanged for over a year now while it reduced the SLR by one percentage point due to stress on liquidity last year in December. RBI may consider a proposal to re-introduce inflati

Guidelines Issued to Enable Banks to Effectively Manage Risks Arising Out of Outsourcing
Reserve Bank of India (RBI) has issued Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks on 3rd November, 2006, to enable the banks to effectively manage the risks arising out of outsourcing. As per these guidelines, the banks are required to put in place a Board approved comprehensive policy detailing all relevant aspects such as the services to be outsourced, criteria for selection of such activities as well as service providers, parameters for defining material outsourcing, delegation of authority depending on risks and materiality and systems to

RBI directs bank not to recover pre-payment charges on floating rate loans
Prepaying housing loan gets a lot more easier as the Reserve Bank of India (RBI) has directed banks not to recover pre-payment charges in floating rate loans. Banks must not recover pre-payment charges in floating rate loans. Banks may also offer long-term fixed rate housing loans to their customers and address their asset liability mismatch (ALM) issues by recourse to the Interest Rate Swaps (IRS) market. Floating rate loans pass on the interest rate risk from banks which are much better placed to manage it to borrowers and, thus, banks only substitute interest rate risk with potential credi

India’s central bank comes out with draft guidelines for allowing business houses to setup commercial banks
After discussing it for over an year, the Reserve Bank today came out with draft guidelines for allowing business houses with successful track record and a minimum capital of Rs 500 crore to set up commercial banks. The draft, on which the RBI has invited comments from stakeholders till October 30, also spelt out the framework for converting non-banking financial companies into banks. As per the draft guidelines, the minimum capital requirement for a company to set up a bank has been pegged at Rs 500 crore, up from existing Rs 300 crore.
Although the move to allow corporates to set up ba