Latest news with #AbhishekUpadhyay
Economic Times
24-05-2025
- Business
- Economic Times
RBI's Rs 2.68 lakh crore dividend bonanza beats govt estimate
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Mumbai: The central bank Friday declared a record surplus transfer of Rs 2.68 lakh crore for FY25 to the Centre--exceeding North Block's budget estimates of dividend receipts for this fiscal and beating the FY24 payout by nearly a third--and reworked the balance sheet-referenced distribution formula to make future payments more economic capital framework (ECF), which is the theoretical bedrock determining the payout range for a financial year, has been tweaked so as to ringfence the Reserve Bank of India 's ( RBI ) finances in times of financial Friday, the RBI Board raised the upper band of the Contingent Risk Buffer (CRB), now to be maintained within a significantly wider range of 7.5% to 4.5% of the central bank's balance band previously ranged from 6.5% to 5.5%.'This revised CRB range gives the RBI more room for future dividends,'' said Abhishek Upadhyay, senior economist, ICICI Securities Primary Dealership. 'With this payout, it is possible for the fiscal deficit to be lower by 10-20 basis points.'One basis point is 0.01 percentage dividend transfer to the government, based on the Bimal Jalan committee recommendations, has 'stood the test of time', and only some tweaking was required for the coming five years, said people familiar with the said at a time when the economy is seeing a steady, consistent growth rate, some alteration in dividend transfer formula may be required to suggest what the math should be for the next five years."The Bimal Jalan panel recommendations have stood the test of time, even during Covid... I don't see the panel formulations coming to such an end. Some kind of alterations will happen and RBI is working on it, maybe some tweaking (of the panel recommendations)...," said one of the ECF was adopted in August 2019 based on the Jalan-led Expert Committee announced fund transfer of Rs 2.68 lakh crore is 27% higher than the Rs 2.1 lakh crore paid to the government by its money manager last year. The budget, in February, had estimated receipts of Rs 2.56 lakh crore as dividend income from the RBI and other government financial the CRB was retained at 6.5%, as in the previous year, the surplus fund transfer could be Rs 3.5 lakh RBI's surplus transfer has become a key component in the government's management of fiscal balance. As the central bank's balance sheet and operations have been expanding, the transfers have also been increasing. Worried about a likely deterioration of the central bank's finances, a committee under former Governor Bimal Jalan was set up to prescribe a framework that was reviewed internally by the RBI recently. It has suggested new norms, including the widening of the contingency reserve buffer.'The extant ECF had met its objective of ensuring a resilient balance sheet for RBI, while maintaining a healthy transfer of surplus to the government,'' the RBI said in a statement Friday. 'Certain changes have, however, been made with the objective of further strengthening the framework to align better with any emerging risks.'The central bank said the changes to the framework Friday allow better risk management, especially in an uncertain trade environment globally.'The revised ECF provides requisite flexibility in the maintenance of risk buffers, considering the prevailing macroeconomic and other factors, while also ensuring needed intertemporal smoothing of the surplus transfer to the government,'' the RBI revised framework using a much wider reference frame allows flexibility and is more practical, experts said.'The decision to widen the Contingency Risk Buffer band to 4.5-7.5% of the balance sheet from 5.5-6.5% previously is pragmatic,'' said Anubhuti Sahay, head of India economic research, Standard Chartered Bank. 'It provides the RBI with the required flexibility to manage potential volatility in income generation and the objective of financial stability and allows for better predictability on dividend transfer to the government and thus fiscal deficit planning.'The Jalan committee recommended a capital framework that served well for the RBI as well as the government as it ended a controversy over how much surplus the central bank could keep with itself. Former Chief Economic Advisor Arvind Subramaniam first raised the issue years ago when the government was facing a tough fiscal situation that led to disputes with the revised framework also includes factoring in the market risks associated with the off-balance items of the central bank into the capital framework, it of the central bank also do not remain the same as its positions in the market determine whether its trades in the money and forex markets turn profitable. After Covid, many central banks have slipped into losses, and some of them have skipped transferring any surplus to their governments because of lack of any gains.'The same kind of revenue may not always be expected in the future and hence cannot be called a new normal as forex sales may not be as large as this year,'' said Madan Sabnavis, economist, Bank of Baroda. 'But, on the other hand, if buffers are lowered when conditions are normal, then there could be earnings from this side.'Under the new framework, the central bank could transfer all of the realised equity above the 7.5% contingency buffer, while not transferring any when it falls below the lower respect to the Surplus Distribution Policy, any available equity in excess of 7.5% of the balance sheet (after considering shortfall in market risk buffers, if any) may be written back from the Contingency Fund to income, the RBI said.'In case the available equity is below the lower bound of its requirement, no surplus will be transferred to the government until at least the minimum level of Required Realised Equity is achieved,'' the RBI said.
Time of India
24-05-2025
- Business
- Time of India
RBI declares 27% higher dividend on higher capital provision
The RBI has declared a record surplus transfer of Rs 2.68 lakh crore to the Centre for FY25, exceeding budget estimates. The economic capital framework has been tweaked, widening the Contingent Risk Buffer range to 4.5-7.5% of the balance sheet. This revision allows for better risk management and more predictable dividend transfers to the government. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The central bank Friday declared a record surplus transfer of Rs 2.68 lakh crore for FY25 to the Centre – exceeding North Block's budget estimates of dividend receipts for this fiscal and beating the FY24 payout by nearly a third - and reworked the balance sheet-referenced distribution formula to make future payments more economic capital framework (ECF), which is the theoretical bedrock determining the payout range for a financial year, has been tweaked so as to ringfence the Reserve Bank of India 's ( RBI ) finances in times of financial Friday, the RBI Board raised the upper band of the Contingent Risk Buffer (CRB), now to be maintained within a significantly wider range of 7.50 to 4.50 per cent of the central bank's balance sheet. The band previously ranged from 6.5 percent to 5.5 percent.'This revised CRB range gives the RBI more room for future dividends,'' said Abhishek Upadhyay, senior economist, ICICI Securities Primary Dealership. ``With this payout, it is possible for the fiscal deficit to be lower by 10-20 basis points.'One basis point is 0.01 percentage dividend transfer to the government, based on the Bimal Jalan committee recommendations, has "stood the test of time," and only some tweaking was required for the coming five years, a government official announced fund transfer of Rs 2.68 lakh crore is 27% higher than the Rs 2.1 lakh crore paid to the government by its money manager last year. The budget, in February, had estimated receipts of Rs 2.56 lakh crore as dividend income from the RBI and other financial institutions North Block the CRB was retained at 6.5%, as in the previous year, the surplus fund transfer could be Rs 3.5 lakh RBI's surplus transfer has become a key component in the government's management of fiscal balance. As the central bank's balance sheet and operations have been expanding, the transfers have also been increasing. Worried about a likely deterioration of the central bank's finances, a committee under former Governor Bimal Jalan was set up to prescribe a was reviewed internally by the RBI recently and that has suggested new norms, including the widening of the contingency reserve buffer."The extant ECF had met its objective of ensuring a resilient balance sheet for RBI, while maintaining a healthy transfer of surplus to the Government,'' the RBI said in a statement Friday. ``Certain changes have, however, been made with the objective of further strengthening the framework to align better with any emerging risks.'The central bank said the changes to the framework Friday allows better risk management, especially in an uncertain trade environment globally.'The revised ECF provides requisite flexibility in the maintenance of risk buffers, considering the prevailing macroeconomic and other factors, while also ensuring needed intertemporal smoothing of the surplus transfer to the government,'' the RBI revised framework using a much wider reference frame allows flexibility and is more practical, experts said.'The decision to widen the Contingency Risk Buffer band to 4.5-7.5% of the balance sheet from 5.5-6.5% previously is pragmatic,'' said Anubhuti Sahay, head of India economic research, Standard Chartered Bank. ``It provides the RBI with the required flexibility to manage potential volatility in income generation and the objective of financial stability and allows for better predictability on dividend transfer to the government and thus fiscal deficit planning.'The Jalan committee recommended a capital framework that served well for the RBI as well as the government as it ended a controversy over how much surplus the central bank could keep with itself. Former Chief Economic Advisor Arvind Subramaniam first raised the issue years ago when the government was facing a tough fiscal situation that led to disputes with the revised framework also includes factoring in the market risks associated with the off-balance items of the central bank into the capital framework, it of the central bank also do not remain the same as its positions in the market determine whether its trades in the money and forex markets turn profitable. After Covid, many central banks have slipped into losses, and some of them have skipped transferring any surplus to their governments because of lack of any gains.'The same kind of revenue may not always be expected in the future and hence cannot be called a new normal as forex sales may not be as large as this year,'' said Madan Sabnavis, economist, Bank of Baroda . ``But, on the other hand, if buffers are lowered when conditions are normal, then there could be earnings from this side.'Under the new framework, the central bank could transfer all of the realised equity above the 7.5 percent contingency buffer, while not transferring any when it falls below the lower respect to the Surplus Distribution Policy, any available equity in excess of 7.5% of the balance sheet (after considering shortfall in market risk buffers, if any) may be written back from the Contingency Fund to income, the RBI said."In case the available equity is below the lower bound of its requirement, no surplus will be transferred to the government until at least the minimum level of Required Realised Equity is achieved,'' the RBI said.
Time of India
24-05-2025
- Time of India
Assistant engineer cheated of Rs 40000 by fake legal mediator
Bhopal: Habibganj police registered a case of fraud against an unidentified man who allegedly posed as a legal representative of a recognised counselling centre and cheated an assistant engineer from the electricity department of Rs 40,000. The accused claimed he could mediate a settlement between the complainant and his estranged wife. According to police, the complainant is posted as an assistant engineer in Umaria. He married a woman, Rashmi (name changed), in 2021. However, within two years of the marriage, disputes arose between the couple. The complainant's wife lodged a complaint at Ashoka Garden police station, which subsequently led to counselling sessions at a reconciliation centre. During this period, the engineer received a phone call from a man identifying himself as Abhishek Upadhyay, claiming to be a lawyer associated with the counselling centre. The caller offered to help resolve the marital dispute amicably and assured the engineer that no legal action would be taken against him, but demanded Rs40,000 for the service. The caller even threatened that if the money wasn't paid, a case would be registered. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Trade Bitcoin & Ethereum – No Wallet Needed! IC Markets Start Now Undo Trusting the assurance, the assistant engineer transferred the amount. However, a case was later registered against him regardless. Subsequently, the man posing as Abhishek Upadhyay began demanding more money. Growing suspicious, the complainant contacted the Bar Council and the counselling agency to verify the lawyer's credentials, only to find that no such person was registered with either body. Police suspect that the accused may be an acquaintance of the engineer's wife, though the wife was reportedly unaware of the monetary transaction. Habibganj police are currently tracing the accused using the mobile number from which the calls were made. An investigation is underway. Get the latest lifestyle updates on Times of India, along with Brother's Day wishes , messages and quotes !
Time of India
24-05-2025
- Business
- Time of India
RBI's ₹2.68 Lakh Crore Dividend Bonanza Beats Govt Estimate
Live Events The central bank Friday declared a record surplus transfer of ₹2.68 lakh crore for FY25 to the Centre —exceeding North Block's budget estimates of dividend receipts for this fiscal and beating the FY24 payout by nearly a third—and reworked the balance sheet-referenced distribution formula to make future payments more economic capital framework (ECF), which is the theoretical bedrock determining the payout range for a financial year, has been tweaked so as to ringfence the Reserve Bank of India's (RBI) finances in times of financial Friday, the RBI Board raised the upper band of the Contingent Risk Buffer (CRB), now to be maintained within a significantly wider range of 7.5% to 4.5% of the central bank's balance band previously ranged from 6.5% to 5.5%.'This revised CRB range gives the RBI more room for future dividends,' said Abhishek Upadhyay, senior economist, ICICI Securities Primary Dealership. 'With this payout, it is possible for the fiscal deficit to be lower by 10-20 basis points.'Fiscal deficit for the current year is budgeted at 4.4% of dividend transfer to the government, based on the Bimal Jalan committee recommendations, has 'stood the test of time', and only some tweaking was required for the coming five years, said people familiar with the said at a time when the economy is seeing a steady, consistent growth rate, some alteration in dividend transfer formula may be required to suggest what the math should be for the next five years."The Bimal Jalan panel recommendations have stood the test of time, even during Covid... I don't see the panel formulations coming to such an end. Some kind of alterations will happen and RBI is working on it, maybe some tweaking (of the panel recommendations)...," said one of the ECF was adopted in August 2019 based on the Jalan-led Expert Committee announced fund transfer of ₹2.68 lakh crore is 27% higher than the ₹2.1 lakh crore paid to the government by its money manager last year. The budget, in February, had estimated receipts of ₹2.56 lakh crore as dividend income from the RBI and other government financial the CRB was retained at 6.5%, as in the previous year, the surplus fund transfer could be ₹3.5 lakh RBI's surplus transfer has become a key component in the government's management of fiscal balance. As the central bank's balance sheet and operations have been expanding, the transfers have also been increasing. Worried about a likely deterioration of the central bank's finances, a committee under former Governor Bimal Jalan was set up to prescribe a framework that was reviewed internally by the RBI recently. It has suggested new norms, including the widening of the contingency reserve buffer.'The extant ECF had met its objective of ensuring a resilient balance sheet for RBI, while maintaining a healthy transfer of surplus to the government,'' the RBI said in a statement Friday. 'Certain changes have, however, been made with the objective of further strengthening the framework to align better with any emerging risks.'The central bank said the changes to the framework Friday allow better risk management, especially in an uncertain trade environment globally.'The revised ECF provides requisite flexibility in the maintenance of risk buffers, considering the prevailing macroeconomic and other factors, while also ensuring needed intertemporal smoothing of the surplus transfer to the government,'' the RBI revised framework using a much wider reference frame allows flexibility and is more practical, experts said.'The decision to widen the Contingency Risk Buffer band to 4.5-7.5% of the balance sheet from 5.5-6.5% previously is pragmatic,'' said Anubhuti Sahay, head of India economic research, Standard Chartered Bank. 'It provides the RBI with the required flexibility to manage potential volatility in income generation and the objective of financial stability and allows for better predictability on dividend transfer to the government and thus fiscal deficit planning.'The Jalan committee recommended a capital framework that served well for the RBI as well as the government as it ended a controversy over how much surplus the central bank could keep with itself. Former Chief Economic Advisor Arvind Subramaniam first raised the issue years ago when the government was facing a tough fiscal situation that led to disputes with the revised framework also includes factoring in the market risks associated with the off-balance items of the central bank into the capital framework, it of the central bank also do not remain the same as its positions in the market determine whether its trades in the money and forex markets turn profitable. After Covid, many central banks have slipped into losses, and some of them have skipped transferring any surplus to their governments because of lack of any gains.'The same kind of revenue may not always be expected in the future and hence cannot be called a new normal as forex sales may not be as large as this year,'' said Madan Sabnavis, economist, Bank of Baroda. 'But, on the other hand, if buffers are lowered when conditions are normal, then there could be earnings from this side.'
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Business Standard
15-05-2025
- Business
- Business Standard
RBI pushes lenders to revive funding market vital for monetary policy
A dwindling borrowing market used mainly by Indian banks is showing signs of life as authorities champion its usage to lenders, according to people familiar with the matter. Average daily volumes in the interbank call market have climbed to their highest in about five years this month, despite a plethora of often more attractive alternatives. Officials at the Reserve Bank of India have been asking dealers at banks to use the facility to keep its relevance to monetary policy alive, the people said, who asked not to be named, citing private discussions. While overall money-market turnover has risen to an average $70 billion a day, interbank trades account for just 2 per cent of that, down from 20 per cent a decade ago. That's as non-bank players like mutual funds and insurers use other venues for funding, contributing to the market's waning significance. The call money market is a vital component of India's financial plumbing, allowing the central bank to gauge how well its interest rate changes are being reflected in the broader economy. Shrinking volumes threaten to disrupt this process, weakening the link between policy rates and real-world borrowing costs, and by extension, the pricing of key financial derivatives. 'The weighted average call rate is the best operational target for monetary policy, despite dwindled share of call market volumes in overnight markets,' said Abhishek Upadhyay, an economist at ICICI Securities Primary Dealership. 'It represents the balance between demand and supply of bank reserves that is controlled by the RBI.' An email sent to the RBI seeking comment on the matter wasn't immediately answered. Daily average volumes in the call market are about Rs 16,490 crore ($1.9 billion) so far this month, Bloomberg-compiled data show. That's the highest in more than five years. Volumes reached 200 billion rupees on May 5, the highest since March 2020. To be sure, reviving the market comes at a cost: unsecured borrowing is typically more expensive and exposes lenders to credit risk. The trend away from the bank-to-bank call market isn't unique to India. Since the 2008 financial crisis and the stricter banking rules that followed, several countries embraced secured markets. For instance, the US replaced the scandal-hit Libor with the Secured Overnight Financing Rate. In India, the transition comes as players like mutual funds and insurers — whose assets have ballooned since the pandemic — are borrowing in the secured funding markets such as repo. The waning impact of the interbank rate has reduced the effectiveness of its link to the policy rate, making it harder to price loans and other financial products. This has spurred the central bank to push for a new benchmark — the Secured Overnight Rupee Rate (SORR) — which may eventually replace the Mumbai Interbank Outright Rate for pricing derivatives. The transition will depend on liquidity building up in the products tied to the new rate, according to the RBI. About 86 per cent of India's Rs 100 trillion outstanding in interest interest rate derivatives are overnight indexed swaps, tied to MIBOR, according to the central bank. The SORR, based on secured overnight repo trades that account for 98 per cent of activity, offers greater reliability and transparency.
