Tight liquidity constrains RBI, but continued inflation concerns point to a possible rate increase in January.

Monetary policy: Biding time

Business Standard

Indranil Pan, chief economist, Kotak Mahindra Bank, tells Krishna Merchant that the apex bank may raise the repo and reverse repo rates by 25 basis points each in January.

Market Voice: Indranil Pan, Chief Economist, Kotak Mahindra Bank

The market expects 25 bps increase in key rates in the next review.

RBI wary of sharp rise in global commodity prices

The Reserve Bank of India (RBI) on Thursday offered some comfort to the cash-starved system and left benchmark interest rates unchanged after six increases this year. But market watchers said the pause may prove temporary, going by the central bank&rsquo;s anti-inflationary stance in its mid-quarter review of monetary policy.

Balm for cash crunch, but inflation pain stays

Many banks had raised both lending and deposit rates last week. They plan to wait till further action by RBI, say bankers. Banks raised rates to tide over the liquidity crunch. The base rate, the reference rate for all loans, was raised later. With RBI saying it would infuse liquidity of Rs 48,000 crore in a month, and Thursday&rsquo;s cut in the statutory liquidity ratio, bankers said another rise in deposit rates might not be needed.

Banks to wait for cue in January policy

Bankers were relieved at the liquidity easing measures of the Reserve Bank of India, expected to bring down the current cash crunch significantly.

Banks breathe easy as RBI promises liquidity support

India Inc on Thursday said it was &ldquo;happy and delighted&rdquo; with the Reserve Bank of India (RBI) keeping the key policy rates unchanged and announcing measures to pump in Rs 48,000 crore into the system.

India Inc says it's 'happy & delighted'

Press Trust of India

Softening of headline inflation below eight per cent on a year-on-year basis and continued liquidity tightness since May 2010 have facilitated the Reserve Bank of India (RBI) to concentrate on credit and growth aspects in its mid-quarter monetary policy review unveiled on Thursday.

Comment: M D Mallya, CMD, Bank of Baroda

The liquidity crunch is showing no signs of easing, with banks on Tuesday borrowing Rs 1.57 lakh crore from the repo window of the Reserve Bank of India (RBI). On Tuesday was the second consecutive day when the deficit crossed Rs 1.5 lakh crore, despite last week&rsquo;s measures by RBI.

Liquidity deficit above Rs 1.5 lakh cr for 2nd day

In the second quarterly review of the credit policy, the Reserve Bank of India (RBI) revised the risk weight for residential housing loans of Rs 75 lakh and above upwards at 125 per cent, compared with 100 per cent earlier.

Banking: Prashant Joshi

Peers describe Sanjay Sachdev, the new chief executive officer of Tata Asset Management Company, as a man who can form alliances with ease. Under his leadership, US financial services major Principal Group raised third-party assets of over $2.5 billion in India. He was instrumental in Principal's partnership with IDBI and later with Punjab National Bank and Vijaya Bank.

BS People: Sanjay Sachdev

From FMCG to the financial sector, an increasing number of veterans are joining private equity or venture capital firms.

Corporate managers seek new rush in PE

Introduction of base rate and daily interest on account balance are among the moves that will help you.

Long-term measures for depositors, borrowers

Home loan borrowers will have to pay higher equated monthly instalments (EMIs) in 2011. Most leading banks and housing finance companies (HFCs), including ICICI, Housing Development Finance Corporation, Bank of Baroda and Punjab National Bank, have increased their base rates by 20-50 basis points in December. These new rates will come into effect from January.

Look forward to higher EMIs in 2011

Being in the spotlight as one of the candidates in the race to head the largest bank in the country can be a quite challenge for a low-profile person. Perhaps this sums up the situation that Hemant Contractor, deputy managing director with State Bank of India, found himself in.

BS People: Hemant Contractor

One of Pratip Chaudhuri&rsquo;s obsessions is to remain low profile &mdash; work quietly behind the scenes, as far away from the arc lights as possible. But the 56-year-old post-graduate in management will suddenly find himself at centre stage if his appointment as State Bank of India&rsquo;s (SBI&rsquo;s) next chairman is cleared by the appointments committee of the Cabinet.

Newsmaker: Pratip Chaudhuri

Despite expectations of a rise in interest rates, bankers and economists are predicting high credit demand in the current financial year.

Credit demand set to remain high this year

Inflation has remained at elevated levels despite eight rate increases of 25 basis points each by the Reserve Bank of India (RBI), subsequent to the reversal of its easy monetary stance in March 2010. The persistent high inflation can largely be attributed to its supply-driven nature, which cannot be effectively controlled through monetary policy.

Gradual tightening may still be the best bet

&ldquo;A 25-basis points increase in overnight rate is a certainty,&rdquo; said Krishnamurthy Harihar, treasurer at FirstRand Bank Ltd in Mumbai. &ldquo;Inflation, stemming from high commodity prices, has to be tackled.&rdquo; The yield on the 7.80 percent note due April 2021, the most-traded government security, rose one basis point to 8.14 percent at the 5 p.m. close in Mumbai, according to the central bank&rsquo;s trading system.

Bond yields rise to 11-week high

Inflation an issue for investors, industry says high rates will erode competitiveness.

Everybody loves a rate rise

Standard Chartered Bank&rsquo;s alleged sale of debentures to its private banking clients with an illegal buyback option has put the spotlight on debentures.

Bank fixed deposits are a better bet than debentures

Financial Analysis: Find the Latest Financial News Analysis & Research Updates from all top sources for the Indian Finance industry on Business Standard.

Finance News Analysis, Financial Analysis and Research | Business Standard

Find the Latest Financial News Analysis & Research Updates from all top sources for the Indian Finance industry on Business Standard.

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