Page 7 - Liquidity

Deposit growth trailing credit growth may cause liquidity issues: Das

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday warned banks of "structural liquidity issues", if deposit growth continues to trail credit growth. Das also flagged more issues on the unsecured credit front, pointing out that banks are having higher ceilings for such risky credit despite the portfolios being large enough, and asked them to be prudent and avoid exuberance. Urging banks to maintain a "reasonable balance" between credit and deposit growth, Das also mentioned that a good part of household savings that used to come into the banking system as deposits is now going into other instruments like mutual funds. "Credit growth should not run ahead of deposit growth by miles. More so when banks are required to maintain CRR, SLR, LCR," Das said during his address at a summit organised by Financial Express here. "Deposit mobilisation has been lagging credit growth for some time now. This may potentially expose the system to structural liquidity issues," he added. He

IPO-bound Swiggy announces fifth ESOP liquidity programme worth $65 million

So far, the company has cumulatively enabled over Rs 1,000 crore of ESOP liquidity over the five events, benefiting over 3,200 employees

India dedicated flows slow to 12-week low, led by outflows from ETFs

India dedicated flows finally slowdown to 12-week low of $153mn this week after average weekly inflows of $1bn post-election results.

Liquidity surplus improves to two month high on govt spending, redemption

Consequently, the yield on 3-month and 6-month treasury bills fell by 2 basis points, whereas that on 364-day bills fell by 1 basis point compared to last week

Technical glitch halts RBI's liquidity management system: Explained

This is the first glitch experienced by the ASISO system in four years since its installment by the RBI

Capital requirements will remain high for Indian companies: Moody's

Moody's Ratings on Thursday said capital requirements will remain high for Indian corporates as they go in for capacity expansion and inorganic growth spending. Moody's estimates that 16 of the 23 rated companies will require USD 70-100 billion of funding annually in the next two years for growth spending, refinancing requirements and shareholder payments. While improving domestic liquidity and companies' internal cash flows can cover a large portion of their capital needs, offshore funding will remain an important funding channel, it said. "Capacity expansion, inorganic growth spending, refinancing and working capital needs, along with shareholder payments, will keep capital requirements high for nonfinancial corporates in India," Moody's Ratings said in a statement. It said capital spending by non-financial corporates will remain high as they expand their capacities to cater to the strong consumption growth expected in the country, at a time when their capacity utilization is ...

China's PBOC pledges to ensure reasonably ample liquidity, credit growth

The People's Bank of China (PBOC) said it will make its monetary policy flexible, precise and effective and promote a moderate recovery in consumer prices

Cocoa prices recover after slumping 20% amid record low liquidity

July London cocoa futures on the ICE exchange fell nearly 15% on Monday for their largest one-day loss and then lost more than 10% at the market open on Tuesday

RBI conducts two-day VRRR as liquidity surplus nears Rs 1 trillion

Banks parked Rs 32,576 crore, against the notified amount of Rs 50,000 crore at a weighted average rate of 6.49 per cent at the auction

Certificates of deposit issuances by banks up 34% in FY24, hit Rs 9.56 trn

The top five issuers accounted for approximately 60 per cent of the total fundraising in February

Short-term rates decline amid strong variable rate repo auction demand

The liquidity deficit in the banking system widened to Rs 1.22 trillion on Monday, according to the latest data by the RBI

Banking system liquidity goes into surplus mode after three months

VRRR auction gets weak response

'RBI likely to take delivery of maturing $5 bn FX swap next week'

Taking delivery of the FX swap would infuse around 400 billion rupees but cash outflows towards direct taxes are expected to ensure a sustained deficit in the system

RBI receives bids worth Rs 2.08 trillion at the 13-day VRR auction

RBI will conduct a 3-day VRR auction on February 26 to infuse Rs 1.5 trillion into the system

FPI selling, liquidity deficit tightening financial conditions: CRISIL

Financial conditions have tightened the economy with liquidity going into a deeper deficit putting upward pressure on short-term rates, according to a research report by CRISIL Market Intelligence and Analytics. The report released during the month also said that foreign portfolio investors turned net sellers further aggravating the tight liquidity conditions. With tightening of the liquidity, the transmission of interest rates improved across lending and deposit rates in January. However, the cumulative rise in most deposit and lending rates remained lower than the 250 basis points of repo rate increase by the RBI since May 2022, the report said. This incomplete transmission of monetary policy prompted the Reserve Bank of India to keep the interest rates unchanged, the research body said in the report. "We believe that the central bank will be active in liquidity management and adopt regulatory measures to prevent excesses in credit growth. We foresee the RBI cutting rates from Ju

RBI conducts two VRRR auctions again to balance liquidity within system

Market participants are attempting to address the uneven liquidity and absorb the excess liquidity resulting from government spending, stated a dealer at a primary dealership

RBI's liquidity drain signals tight cash conditions may stay: Economists

'April policy would be a better time to take a fresh view on liquidity situation for FY25'

Credit growth of banks could moderate in FY25 on tighter liquidity: S&P

S&P Global Ratings on Monday said strong credit growth of Indian banks could moderate to 12-14 per cent in the next fiscal if deposit growth remains tepid. "Deposit growth continues to lag credit for the Indian banks we rate, leading to tight liquidity conditions," S&P Global Ratings credit analyst Nikita Anand said. Banks may be compelled to look for wholesale funding, S&P said, adding that higher costs of such funding could further strain margins and hurt profitability. Rising cost of funds and potential rate cuts in fiscal 2025 will squeeze net interest margins, it added. "Liquidity is tightening for Indian banks. The sector's strong credit growth could moderate to 12-14 per cent in fiscal 2025 if deposit growth remains tepid, compounded by higher deposit costs and competition for funds," S&P said in a report titled 'Tight liquidity shackles Indian banks' robust credit growth'. S&P expects the share of unsecured personal loans in the banks' total loan book to ...

Mahindra Finance Q3 results: Net profit down 12% due to higher credit costs

The net profit of the company stood at Rs 629 crore in Q3 FY23. However, sequentially, the profit increased by 135 per cent from Rs 235 crore in Q2 FY24

RBI to conduct overnight VRR to infuse Rs 25,000 crore on Tuesday

In the preceding VRR auctions, the central bank received a significant response, with banks submitting bids ranging between 2.5 to 3.2 times the bidding amounts due to tight liquidity conditions