RBI Tries to Help the Economy Grow
The Reserve Bank of India (RBI) just made a big decision. It cut interest rates again — this time by 0.5% (or 50 basis points). That's good news for people who have to pay EMIs (monthly loan payments), because their payments could now become cheaper.
So why did RBI do this? The goal is to help India's economy grow faster. In the last few months, the economy grew by 7.4%, which sounds great. But most of that growth came from the government spending money on building things like roads and bridges. Factories and companies making goods (that's called manufacturing) didn't grow much. And that's a problem because strong factory growth means more jobs and more money in people's pockets.
For India to grow well this year, people need to spend more — especially on things like cars and homes. These industries give jobs to millions of people. To help with that, RBI has already made loans cheaper three times this year. Now it's hoping that cheaper loans will make more people buy homes and cars, which will boost the economy.
Prices of things (inflation) have finally stopped rising so fast, so the RBI felt safe enough to cut rates. But some experts think people aren't buying more because they simply don't earn enough. After Covid, many carmakers and builders started making only expensive models. Small, cheaper cars and homes became rare. So middle-class families couldn't afford them.
Now, with cheaper loans, the RBI hopes more middle-income families can buy these things again. If that happens, businesses will also invest more in new projects — and that will help the economy grow. But if it doesn't, the government may need to focus on helping people earn more money.
RBI has said it won't cut rates again soon. So now, everyone's waiting to see: Will this plan work?
Facebook Twitter Linkedin Email Disclaimer
Views expressed above are the author's own.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
an hour ago
- Economic Times
US markets, FII action among 7 factors that can steer D-Street this week
Indian benchmark indices ended the week with gains of 1%, marking their third consecutive weekly advance. The rally was driven by rate-sensitive sectors, including banking, auto, and real estate, following a surprise 50-basis-point repo rate cut by the Reserve Bank of India (RBI) on Friday. A host of important domestic and global events lined up for the coming week are expected to influence stock market movements when trading resumes on Monday. ADVERTISEMENT On Friday, the Nifty jumped 252.15 points, or 1%, to close at 25,003.05. Commenting on the trend, Rupak De, Senior Technical Analyst at LKP Securities, noted that the RBI's policy bazooka sparked a sharp rally, helping the index close above the 25,000 mark for the first time in several sessions. This signaled growing optimism among market participants, he noted. 'Typically, a rally followed by consolidation often leads to an upward breakout. This time, too, we expect Nifty to break out of its recent consolidation range. On the higher side, resistance is seen at 25,150. A move beyond this level — or even a sustained close above 25,000 — could pave the way for a rally toward 25,350. On the downside, support is placed at 24,850. A breach below this level may weaken the ongoing rally and trigger some profit-booking,' De factors likely to impact market movement this week:US stocks rose on Friday after a better-than-expected jobs report eased concerns about the economy. Tesla also rebounded from a sharp decline the previous day, while technology stocks extended their gains. ADVERTISEMENT Indian markets are expected to take cues from Wall Street, which ended with strong gains on Friday. The Dow Jones Industrial Average closed at 42,762.90, up 443.13 points or 1.05%, while the S&P 500 rose 61.06 points or 1.03% to finish at 6,000.36. The Nasdaq Composite advanced 231.50 points or 1.2% to close at 19,529.90. Market action will largely depend on the behavior of foreign institutional investors (FIIs). On Friday, FIIs bought shares worth Rs 1,009.71 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 9,342.48 crore. ADVERTISEMENT After being net buyers in April and May, FIIs have so far turned net sellers in June, offloading Indian equities worth Rs 8,749 has formed a bullish engulfing candle on the weekly chart as buying demand—on expected lines, emerged from the lower band of the past three weeks' consolidation range, indicating strength, Bajaj Broking Research said in a note. Nifty is currently positioned at the upper band of the consolidation range of 24,400–25,100. ADVERTISEMENT 'We expect the index to move above the upper band of the range and head higher towards the immediate hurdle of 25,250 and then 25,500 in the coming weeks. Any dips should be viewed as a buying opportunity, with key short-term support placed at 24,700 and 24,400—levels that coincide with the previous breakout zone, the last three weeks' lows, and a key retracement area,' the brokerage added. The Indian rupee strengthened modestly on Friday as the RBI's steepest rate cut in five years boosted local equities, helping the currency gain despite the dollar firming against major peers. The rupee closed at 85.6250 against the U.S. dollar, up from its previous close of 85.79. However, it declined 0.2% for the week. ADVERTISEMENT India's benchmark 10-year bond yield fluctuated between gains and losses as traders absorbed the central bank's policy shift from an 'accommodative' to a 'neutral' stance. The yield was last quoted slightly higher at 6.2237%. Meanwhile, dollar-rupee forward premiums dropped following the rate cut, with the 1-year implied yield falling by 10 basis points to 1.81%. A flurry of corporate actions is lined up this week, including record dates for dividends, stock splits, rights issues, and bonus shares across a five-day trading window. Nearly three dozen companies are scheduled for such activity. Investors will be closely watching five Tata Group stocks and five Adani Group stocks that will trade ex-dividend this Group: Nelco, Tata Investment Corporation, Tata Elxsi, Tata Chemicals, and TrentAdani Group: ACC, Adani Enterprises, Adani Ports and Special Economic Zone (APSEZ), Ambuja Cements, and Adani Total Gas No mainboard IPO is set to open this week, but two SME offerings will be available: Jainik Power Cables IPO: Opens Tuesday, June 10, and closes June 12. Price band: Rs 100–110Sacheerome IPO: Opens Monday, June 9, and closes June 11. Price band: Rs 96–102Both issues will list on the NSE. Crude oil prices continue to play a crucial role in market sentiment due to their influence on inflation. US WTI: Ended at $64.77, up $1.40 or 2.21%Brent: Hovered at $66.47, up $1.31 or 2% (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Indian Express
an hour ago
- Indian Express
Lilavati Trust alleges fraud against HDFC Bank CEO, bank calls it ‘malicious'
In an unexpected development, reportedly linked to loan defaults, the Lilavati Kirtilal Mehta Medical Trust (LKMM Trust)—which oversees a prominent healthcare institution in Mumbai—on Saturday called for the immediate suspension and prosecution of HDFC Bank Managing Director and CEO, Sashidhar Jagdishan, accusing him of involvement in a series of financial frauds concerning the Trust. Responding late in the evening, an HDFC Bank spokesperson strongly denied the allegations made by the Trust, its trustees, and officials, dismissing them as 'baseless and malicious'. 'The Trustee, Prashant Mehta and his family members owe substantial amounts to HDFC Bank which were never repaid,' the bank spokesperson said. 'The Trust calls upon the board of HDFC Bank, the RBI, SEBI and the Finance Ministry to suspend Jagdishan from all executive and board roles with immediate effect,' the Trust said in a statement earlier in the day. 'FIR No. 818/2025 was registered under orders of the Bombay Magistrate Court after a seized cash diary revealed Rs 14.42 crore misappropriated by trustees, of which Rs 2.05 crore was received by Jagdishan — establishing his direct involvement,' the Trust alleged in a statement. There are seven other accused in the said case. According to the bank spokesperson, Jagdishan is being targeted by unscrupulous persons who are abusing the legal process to thwart the recovery of the long outstanding loan due to the bank from recalcitrant defaulters. 'The outrageous and preposterous allegations are strongly and categorically denied,' he said. Recovery and enforcement actions have been taken by the bank over two decades and at every stage Prashant Mehta and his other family members have launched numerous vexatious legal actions, bank spokesperson said. 'Having consistently failed at all levels including the Supreme Court, they have now resorted to the recent mala fide personal attacks on the Bank's MD & CEO with the sole objective of intimidating and bullying the bank and its MD & CEO from carrying out the mandate of recovering all outstanding loans in every possible manner permissible under law,' the bank spokesperson said. He said the bank has obtained comprehensive legal advice and representation in this regard and it is committed to pursuing legal remedies and options to defend its MD & CEO's reputation. 'The bank takes immense pride in the integrity and leadership of its MD & CEO,' the spokesperson said. Citing violation of the RBI's 'Fit and Proper' criteria, the Trust alleged that active criminal allegations of conspiracy, corruption, and breach of trust disqualify him from continuing as CEO under the RBI norms. 'His continued position poses a serious risk of evidence tampering, institutional interference, and intimidation of witnesses,' it alleged. 'The offer of Rs 1.5 crore disguised as CSR funds to hospital staff shows intent to destroy evidence and obstruct justice,' the Trust alleged. Despite judicial findings and multiple complaints, HDFC Bank failed to act, violating Section 166 of the Companies Act and SEBI governance mandates, the Trust alleged. The conflict between the old and new members of the LKMM Trust has been ongoing for years. In 2023, following a prolonged legal battle, control of the trust was awarded to the family of Kishore Mehta, prevailing over the family of Vijay Mehta. Lilavati Hospital, established in 1997 by Kishore Mehta, gradually saw members of Vijay Mehta's family brought onto the board of trustees over time. However, controversy arose in 2002–03 when it was alleged that Vijay Mehta's family had forged board members' signatures to seize control of the trust while Kishore Mehta was receiving medical treatment abroad. Both Kishore and Vijay Mehta have since passed away. 'This is not a private feud or a commercial misunderstanding. This is a deeply rooted criminal betrayal of fiduciary obligations, charity law, public money, and the rule of law. Sashidhar Jagdishan has abused his institutional position not only to suppress truth but to subvert justice. We seek his immediate removal to restore faith in India's banking and legal systems,' alleged Prashant Kishor Mehta, Permanent Trustee of LKMM Trust. Earlier this year, the trustees of Mumbai's Lilavati Hospital filed complaints of fraud against seven former trustees and 10 others alleging financial irregularities to the tune of Rs 1,250 crore over the past two decades. A case under sections of the law including cheating, forgery, and criminal breach of trust was registered on March 6. This was the third FIR registered on the allegations since June last year
Time of India
an hour ago
- Time of India
US markets, FII action among 7 factors that can steer D-Street this week
Indian benchmark indices ended the week with gains of 1%, marking their third consecutive weekly advance. The rally was driven by rate-sensitive sectors, including banking, auto, and real estate, following a surprise 50-basis-point repo rate cut by the Reserve Bank of India (RBI) on Friday. A host of important domestic and global events lined up for the coming week are expected to influence stock market movements when trading resumes on Monday. On Friday, the Nifty jumped 252.15 points, or 1%, to close at 25,003.05. Commenting on the trend, Rupak De, Senior Technical Analyst at LKP Securities, noted that the RBI's policy bazooka sparked a sharp rally, helping the index close above the 25,000 mark for the first time in several sessions. This signaled growing optimism among market participants, he noted. 'Typically, a rally followed by consolidation often leads to an upward breakout. This time, too, we expect Nifty to break out of its recent consolidation range. On the higher side, resistance is seen at 25,150. A move beyond this level — or even a sustained close above 25,000 — could pave the way for a rally toward 25,350. On the downside, support is placed at 24,850. A breach below this level may weaken the ongoing rally and trigger some profit-booking,' De said. Key factors likely to impact market movement this week: 1. US markets US stocks rose on Friday after a better-than-expected jobs report eased concerns about the economy. Tesla also rebounded from a sharp decline the previous day, while technology stocks extended their gains. Indian markets are expected to take cues from Wall Street, which ended with strong gains on Friday. The Dow Jones Industrial Average closed at 42,762.90, up 443.13 points or 1.05%, while the S&P 500 rose 61.06 points or 1.03% to finish at 6,000.36. The Nasdaq Composite advanced 231.50 points or 1.2% to close at 19,529.90. 2) FII/DII Action Market action will largely depend on the behavior of foreign institutional investors (FIIs). On Friday, FIIs bought shares worth Rs 1,009.71 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 9,342.48 crore. After being net buyers in April and May, FIIs have so far turned net sellers in June, offloading Indian equities worth Rs 8,749 crore. 3) Technical Factors Nifty has formed a bullish engulfing candle on the weekly chart as buying demand—on expected lines, emerged from the lower band of the past three weeks' consolidation range, indicating strength, Bajaj Broking Research said in a note. Nifty is currently positioned at the upper band of the consolidation range of 24,400–25,100. 'We expect the index to move above the upper band of the range and head higher towards the immediate hurdle of 25,250 and then 25,500 in the coming weeks. Any dips should be viewed as a buying opportunity, with key short-term support placed at 24,700 and 24,400—levels that coincide with the previous breakout zone, the last three weeks' lows, and a key retracement area,' the brokerage added. 4) Rupee vs Dollar The Indian rupee strengthened modestly on Friday as the RBI's steepest rate cut in five years boosted local equities, helping the currency gain despite the dollar firming against major peers. The rupee closed at 85.6250 against the U.S. dollar, up from its previous close of 85.79. However, it declined 0.2% for the week. India's benchmark 10-year bond yield fluctuated between gains and losses as traders absorbed the central bank's policy shift from an 'accommodative' to a 'neutral' stance. The yield was last quoted slightly higher at 6.2237%. Meanwhile, dollar-rupee forward premiums dropped following the rate cut, with the 1-year implied yield falling by 10 basis points to 1.81%. 5) Corporate Action A flurry of corporate actions is lined up this week, including record dates for dividends, stock splits, rights issues, and bonus shares across a five-day trading window. Nearly three dozen companies are scheduled for such activity. Investors will be closely watching five Tata Group stocks and five Adani Group stocks that will trade ex-dividend this week. Tata Group: Nelco, Tata Investment Corporation, Tata Elxsi, Tata Chemicals, and Trent Adani Group: ACC, Adani Enterprises, Adani Ports and Special Economic Zone (APSEZ), Ambuja Cements, and Adani Total Gas 6) IPOs This Week No mainboard IPO is set to open this week, but two SME offerings will be available: Jainik Power Cables IPO: Opens Tuesday, June 10, and closes June 12. Price band: Rs 100–110 Sacheerome IPO: Opens Monday, June 9, and closes June 11. Price band: Rs 96–102 Both issues will list on the NSE. 7) Crude Oil Crude oil prices continue to play a crucial role in market sentiment due to their influence on inflation. US WTI: Ended at $64.77, up $1.40 or 2.21% Brent: Hovered at $66.47, up $1.31 or 2% ETMarkets WhatsApp channel )
