Latest news with #RBIMUMBAI
Time of India
6 days ago
- Business
- Time of India
RBI eyes bank-like rate norms for NBFCs to plug policy gaps
RBI MUMBAI: RBI is looking to introduce interest rate rules for non-banking finance companies similar to those that govern banks. The goal is to improve how changes in monetary policy pass through to borrowers and to make loan pricing more transparent. As of now, when RBI changes its benchmark repo rate, banks pass on the changes quickly to borrowers with floating-rate loans. However, NBFCs, including housing finance firms, adjust more slowly or in ways that are less transparent. "The extant regulations on interest rates on advances vary across all regulated entities," said RBI. "In order to harmonise the same, a comprehensive review of the extant regulatory instructions is underway. " RBI has been consulting internally and with key industry stakeholders about how to standardise interest rate frameworks. "In order to solicit wider public feedback, it is proposed to issue a discussion paper delineating the various imperatives of moving to a harmonised regime for interest rates on loans and advances across all regulated entities," the central bank said in its annual report. Analysts say the current system creates gaps in oversight. "Banks have repo rate-linked loans, MCLR (marginal cost of lending rate) loans, etc, which are all well defined and RBI can track how transmission happens," said Suresh Ganapathy of Macquarie. "NBFCs don't have these repo-linked or MCLR loans and they price their loans off some antiquated PLR (prime lending rate) concept. Of course, eventual end-pricing will be determined by competitive forces. Having said that, this entire process is super opaque and hence it is essential a proper alignment is sought," Ganapathy added. RBI also wants to overhaul how it supervises NBFCs broadly. One change involves reviewing its risk-based approach to monitoring compliance with anti-money laundering rules. It will examine whether KYC framework is being applied effectively, especially for higher-risk firms. The regulator also plans a thematic review to ensure NBFCs follow interest rate guidelines, particularly to prevent customers from being charged excessive rates. At the same time, it is studying how to bring more NBFCs under a risk-based supervision model, where regulatory attention depends on the complexity and risk profile of each firm. RBI also plans to simplify rules for borrowing and lending in rupees, and to streamline the process by which companies are authorised to handle foreign currency under India's foreign exchange law. 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
7 days ago
- Business
- Time of India
$30 billion outflows in FY25: RBI to review remittance scheme
RBI MUMBAI: RBI is reviewing its 'liberalised remittance scheme', which saw outflows of around $30 billion in FY25, as it looks to rationalise the facility and promote the rupee as an international currency. RBI is carrying out a comprehensive review of the legal framework, annual limits, permitted purposes, and payment modes under the scheme. A revised framework and amendments to foreign exchange rules and regulations are currently underway. Similar reviews are ongoing for the money transfer service and rupee drawing arrangement schemes, with the aim of expanding permitted transactions and rationalising guidelines. The focus is on shifting to principle-based regulation and reducing compliance burdens. Earlier, RBI had amended the scheme to enable citizens to make foreign currency investments in international finance centres (GIFT City). In its annual report for 2024-25, RBI said regulations on foreign exchange management were aligned with evolving business practices to improve 'ease of doing business' and promote the rupee internationally. The annual report also talks about formalising the expected credit loss (ECL) framework for banks and issue guidelines to curb mis-selling of financial products by regulated entities, including third-party offerings. These reforms, highlighted in its annual report, are part of RBI's broader effort to enhance financial sector resilience amid growing risks from technology, cyber threats, and climate change. RBI's rupee internatioalisation efforts include reviewing several existing rules related to external commercial borrowings, export of goods and services, the supervisory framework for authorised persons, inward remittances, and cross-border settlements in rupees and other local currencies. 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
29-04-2025
- Business
- Time of India
Stock more Rs 100, Rs 200 notes in ATMs: RBI
RBI MUMBAI: RBI has directed all banks and white-label ATM operators to ensure wider availability of Rs 100 and Rs 200 notes through ATMs. To boost access to these denominations , RBI has set deadlines: 75% of all ATMs must dispense these notes from at least one cassette by Sept 30, 2025, increasing to 90% by March 31, 2026. Stay informed with the latest business news, updates on bank holidays and public holidays . Master Value & Valuation with ET! Learn to invest smartly & decode financials. Limited seats at 33% off – Enroll now!
