Page 5 - Reserve Bank Of India

RBI flags high-cost distribution pressures in insurance sector growth model

The Reserve Bank has flagged structural pressures in the insurance sector, saying premium growth is being increasingly driven by high-cost distribution-led strategies of insurance companies rather than operating efficiency. While posing no near-term systemic risks, the surface-level stability masks emerging structural pressures that could weigh on medium-term sustainability and coverage expansion, RBI said in its latest financial stability report. "A primary pressure is the persistence of a high expense structure, particularly the acquisition costs. Premium growth has been increasingly driven by high-cost distribution-led strategies rather than operating efficiency," the report said. It further said that while in the life insurance sector, frontloaded acquisition costs limited the extent to which scale efficiencies are passed on to policyholders. Furthermore, expected benefits from digitisation remain unrealised. "From a financial stability perspective, continuously elevated expen

RBI relaxes risk-weight rules for NBFC infra loans, revises thresholds

However, RBI denied requests to dilute termination protection clauses, calling them critical for safeguarding lenders' interests in the event of early project termination

January 2026 bank holidays: Check state-wise closures in India this month

January 2025 holiday calendar, which includes a list of bank and national holidays, is now available. For final confirmation, it is recommended to cross-check with institutional and state calendars

Yield curve steepens due to heavy sovereign issues; long-end demand weakens

RBI's FSR says higher G-Sec and SGS supply and softer demand from insurers and pension funds are keeping long-term yields elevated even as short rates fall on easing and liquidity

Over 70% of fintechs' loan book unsecured: Financial Stability Report

Unsecured personal loans dominate fintech lending, with younger borrowers accounting for over half the exposure, as the RBI highlights growth and asset quality trends

Up to four banks may tap capital buffers in adverse scenarios: RBI

RBI stress tests suggest some banks may need to draw on capital conservation buffers under adverse macro conditions, though minimum capital norms are likely to remain intact

The ATM interchange conundrum: How to make the channel viable again

Stakeholders are pulling in different directions, and the ATM channel has to be reimagined to make it commercially viable. Are there any alternatives?

Why fixing the RBI-government ties matters for India's growth ambitions

The relationship between the central bank and the government is holding back India's financial sector

Growing external borrowings make NBFCs more vulnerable to rupee swings: RBI

RBI says NBFCs' higher foreign currency borrowing has helped steady funding costs, but it raises vulnerability to exchange rate volatility even with most exposure hedged

RBI warns of risks in bank-NBFC interlinkages, asset concentration

The RBI's Financial Stability Report warns that banks are increasingly buying NBFC-originated loans to scale retail portfolios, with nearly 80 per cent of assets sourced from a limited set of non-bank

RBI net short dollar position rises to $66 bn in rupee forwards by Nov end

RBI data shows its outstanding net short dollar position in the rupee forward market rose to $66.04 billion by end-November, up from $63.6 billion at end-October

Are banks open or closed on New Year's Day, Jan 1? Here's state-wise update

January 1, 2026, a Thursday, is New Year's Day in 2026. In the US, January 1st is a federal holiday; in India, it is a restricted holiday. However, in some states, banks are closed, as per the RBI

Corporate lending to rebound as loan-bond rate gap narrows, RBI eases norms

Analysts expect banks' corporate credit to pick up as the bond-loan rate gap narrows and RBI reforms, including acquisition financing and eased exposure norms, begin to bite

2025: Year of big-bang reforms aimed at ease of doing business in finance

The Reserve Bank of India rolled out sweeping reforms in 2025 to lower compliance costs and improve ease of doing business, from LCR relief and project finance norms to digital lending rules

India's banks are healthier, but the next stress point is already visible

While banking is stable and resilient, it needs to evolve and adjust to the changing dynamics of the Indian financial system

RBI to conduct OMO purchase auction worth ₹50,000 crore on January 5

The RBI will buy government securities worth ₹50,000 crore in an OMO auction on January 5, 2026, as part of four equal tranches announced for late December and January

Banks 'resilient' but face stiff fund mobilisation competition: RBI report

RBI said banks remain resilient with low bad loans and strong capital, but credit growth outpacing deposits will keep resource mobilisation competitive, requiring strong governance and risk management

SFB asset quality worsens in FY25; GNPA rises to 3.6%: RBI report

RBI's Trends and Progress report said small finance banks saw weaker asset quality and lower profits in FY25, even as balance sheets expanded at a faster pace than other banks

How heavy state borrowing has blunted the RBI's rate cuts and bond buying

RBI's liquidity push is being neutralised by record state borrowing, keeping yields elevated and markets subdued - exposing deep fiscal strains beneath India's strong GDP numbers

Deposit growth slips below 10% as credit rises 11.7%, gap at 200 bps

RBI data show deposit growth lagging credit growth by 200 basis points, highlighting persistent deposit tightness even as lending demand remains strong