I have some outstanding on my credit card for the last three months. I want to change the due date for payment on my card. I want to know how it will affect the interest levied on my outstanding.

LOANS: Manju Srivatsa

Business Standard

Though most banks have exited dual-rate plans, average rates are quite competitive.

It's ok if you are not teased

A strong rupee has made international holidays cheaper by around 10 per cent.

Travel gains currency on rising rupee

The yield on the 10-year government paper, which touched 8.13 per cent in morning trades, eased on lower headline inflation for March and a smooth sailing for a bond auction on Thursday.

Bond yield touches 8.13%, eases on successful auction

The policy stance is in line with RBI's emphasis on price and fiscal stability. Its move to increase CRR by 25 bps is well within the general expectations.

Prudent policy measures

A brilliant policy entirely in line with YES Bank's expectations. The gradualist approach adopted by the Reserve Bank of India (RBI) in rate tightening augurs well to achieve a fine balance in anchoring inflationary expectations while not compromising growth prospects. The third round in the current tightening cycle marked by a measured hike in key policy rates by 25 basis points is a step towards further normalisation in domestic policy rates.

A brilliant policy stance

Dealing with inflation might be the top priority for the Reserve Bank of India (RBI) at the moment, but that did not deter it from announcing a detailed reforms road map.

RBI steps on the gas on reforms

In an effort to promote the corporate bond market, the Reserve Bank of India (RBI) has permitted banks to treat their exposure to unlisted non-statutory liquidity ratio (SLR) debt securities as an investment in listed securities at the time of making investments.

Ceiling on banks' exposure to unlisted non-SLR papers relaxed

To promote transparency in the secondary market for short term instruments, the Reserve Bank of India today proposed to introduce a reporting platform for deals in commercial paper and deposit certificates.

RBI moots reporting platform for CP, CD

Banks can now engage any individual, including those operating common service centres, to work as business correspondents (BCs). BCs conduct banking business as agents of banks at places other than the bank premises.

Banks can now appoint any individual as BC

The key point of contention in the RBI&rsquo;s policy meeting was whether it would opt for a more gradual 25-bps or a more aggressive 50-bps policy rate hike. By opting to hike repo and reverse repo rates by 25-bps each, RBI has showed its preference to move in a calibrated manner given the fragile global environment.

A calibrated exit

The Reserve Bank of India is presently facing the challenges of managing high inflation and need for supporting the growth levers. It has taken the economy well through the phases of 'managing crisis' to 'managing recovery'. Now, the focus has shifted to 'managing inflation'. The policy stance of RBI truly reflects these emerging concerns. In this backdrop, RBI has hiked the policy rates and cash reserve ratio by 25 basis points each.

Economy on steady growth path

Amid growing exuberance over the economic outlook, the Reserve Bank of india strikes a note of caution in its Annual Policy Statement. It seeks to remind us of the risks that persist from unwieldy inflationary pressures and lingering uncertainties over the 'shape and pace' of the global recovery. While emerging markets seem to be going strong, these factors can leave the recovery vulnerable, justifying a calibrated approach towards monetary tightening.

Risks persist

The important landmark in this policy statement is not so much the 25-bps hike in repo, reverse repo and CRR rates, as it is in RBI&rsquo;s clear statements on where the economy is headed and a balanced approach between growth and inflation. For policy purposes, RBI has taken a baseline projection of real GDP growth for 2010-11 at 8 per cent with an &ldquo;upside bias.&rdquo; This is a critical clue.

BS JURY

RBI wants to moderate inflation, but opts for small hike in key rates.

Calibrated tightening is the mantra

&ldquo;While monetary policy considerations demand that surplus liquidity should be absorbed, debt management considerations warrant supportive liquidity conditions,&rdquo; RBI said, emphasising the need for a &lsquo;fine balancing act&rsquo; to ensure that while absorbing excess liquidity, the borrowing programme was not hampered. The net borrowing in the current financial year, budgeted at Rs 3,45,010 crore, is lower than the previous year.

'Managing borrowing more challenging than last year'

Sebi expected to come out with the operational guidelines.

Options trading in currency futures gets nod

The Reserve bank of India (RBI) has allowed trading in interest rate futures (IRFs) on securities with short-term maturities such as two-year and five-year securities and 91-day treasury bills.

Short-term securities allowed in IRFs

The Reserve Bank of India (RBI) has extended the time for realising the assets acquired by asset reconstruction companies (ARCs) from five years to eight years. In addition, ARCs are also allowed to acquire assets in their own books or directly in the books of the trusts set up by them.

RBI gives more time to ARCs to realise assets

I actually like the policy, since it shows RBI has not been taken in by the scaremongers when it comes to inflation. Inflation is likely to be trending down and, so, RBI has kept this in mind while coming out with its policy. The important thing to look at is not the wholesale price index, which is a very bad indicator, but to look at the GDP deflator, since that is actually a much better indicator of what&rsquo;s happening on prices.

Inflation scare diluted

That RBI would raise interest rates was almost certain, but by how much was a matter of conjecture for the market participants. A 25-bps increase in repo, reverse repo and CRR clearly did not shock market participants. I do not expect interest rates to be impacted much by RBI action in the near term. By the second half of the fiscal, however, yields on the 10-year govt paper should firm up to 8.3-8.5 per cent as demand for private credit picks up and pressure from government borrowings continues. Over the last few months, inflation has not only risen, but has also got broad-based.

Taken the middle path

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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