Explainer: Why RBI took a U-turn on banks and NBFCs investing in AIFs
Eighteen months ago, the Reserve Bank of India (RBI) took a call to end the risk of banks and NBFCs (non-banking financial companies) investing in alternative investment funds (AIFs) and ensure that the regulated entities (REs) do not game the system by pushing their bad loans under the guise of investments in opaque structures. Now, it is proposing to ease those rules and permit. What made the RBI take a U-turn on this issue that has
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
an hour ago
- Time of India
Repo, tariff talks to drive Dalal Street
MUMBAI: The direction of trading on Dalal Street in the new week could be decided by a host of factors, including the RBI policy decision on interest rates set for June 6, tariff-related developments, foreign funds' trading trends, and geopolitical developments, market players said. On Friday, the sensex closed at 81,451 points, while Nifty closed at 24,853 points, marginally down for the week. D-Street traders and investors are expecting a 25 basis points (100bps = 1 percentage point) cut in RBI's repo rate to 5.75%. Tariff-related developments, after a US court stayed all executive orders related to US President Donald Trump's proposals and then an appeals court stayed the lower court order, market players feel there's still time for any clarity to emerge on this front. This uncertainty is expected to lead to volatility in the global market. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
an hour ago
- Time of India
UPI transactions hit new high in May but cash still thriving
UPI transactions hit new high in May but cash still thriving MUMBAI: Even as the country hurtles toward a digital future with the Unified Payments Interface (UPI) clocking 60 crore transactions a day, a curious contradiction persists: cash is thriving. In the month of May, UPI transactions hit a a record 1868 crore transactions for Rs 25.1 lakh crore, up from 1789 crore (Rs 23.9 lakh crore) in April. However, at the end of March, currency in circulation was a record Rs 36.86 lakh crore. The Rs 500 note, in particular, has become the dominant form of cash, making up 41 per cent of all banknotes by volume and accounting for a staggering 86 per cent of total value. In contrast, smaller denominations such as Rs 20, Rs 50, Rs 100 and Rs 200 together account for less than that, both in number (35.6 per cent) and value (10.9 per cent) -despite the state's push for a more granular, digitised cash economy. Finance minister Nirmala Sitharaman recently reiterated the government's commitment to smaller denominations and digital payments, noting efforts to ensure that "currency will be in the lower denominations, used much more than the higher." In April, the Reserve Bank of India mandated that by Sept 30, 2025, at least 75 per cent of ATMs must be capable of dispensing Rs 100 or Rs 200 notes, with this figure rising to 90 per cent by March 2026. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch vàng CFDs với sàn môi giới tin cậy IC Markets Tìm hiểu thêm Undo The goal is to reduce dependence on high-value notes and improve everyday transactional ease. Yet the resurgence of cash is not driven by transaction needs. Bankers say the phenomenon is better explained by precautionary hoarding, a behavioural legacy of the Covid pandemic. An RBI study supports this view, drawing links between cash usage and perceived economic insecurity. The study, intriguingly, uses satellite images of nighttime illumination as a proxy for economic activity. It finds a correlation between brighter regions-indicative of higher GDP and tax collection-and lower currency use. As formal economic activity rises, cash in circulation tends to fall. The recent spike in cash, the RBI suggests, reflects a lingering preference for liquidity in uncertain times. This is not unprecedented. From 2005 to 2014, the rapid rollout of ATMs corresponded with a drop in household cash holdings, as easier access reduced the perceived need to store wealth in physical currency, the RBI study said. But the pandemic has reversed some of that progress. For now, even in a nation where Rs 10 can be paid by QR code, cash-especially in large denominations-continues to loom large. The RBI has successfully withdrawn most of the Rs 2000 banknotes from circulation without any disruption. The recent comments by the finance minister and the RBI have led many to believe that measures to reduce Rs 500 banknotes may be in the offing. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Deccan Herald
3 hours ago
- Deccan Herald
Proposed RBI rules to hurt gold loans in rural & semi-urban India
Most recently, the Finance Ministry recommended that the RBI exempt small-ticket borrowers (below Rs 2 lakh) from the stricter guidelines, and give time till January 1, 2026 before their implementation.
