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NBFC Sector Seeks Funds and Reforms Ahead of  Union Budget 2024 As the Union Budget for 2024 approaches, the Non-Banking Financial Company (NBFC) sector is calling for enhanced financial inclusion and digitalization efforts to sustain its growth. The sector, represented by the Finance Industry Development Council (FIDC), is advocating for the establishment of a special refinancing body, akin to the National Housing Bank (NHB) for housing finance companies. Importance of NBFCs in the Economy NBFCs play a crucial role in the Indian economy by providing financial services to underserved segments that traditional banks may not fully reach. They offer a range of financial products, including loans, asset financing, and wealth management services. This sector is vital for promoting financial inclusion, supporting consumer demand, and improving trade balances. Current State of NBFCs Despite facing stringent regulatory actions from the Reserve Bank of India (RBI) this year, the NBFC sector...

RBI Governor Shaktikanta Das Announce Monetary Policy: Repo Rate Unchanged at 6.5% In a crucial announcement on Tuesday, Reserve Bank of India (RBI) Governor Shaktikanta Das revealed that the Monetary Policy Committee (MPC) has decided to keep the policy repo rate steady at 6.5 per cent. This decision comes as retail inflation continues to hover above the central bank's target of 4 per cent, amid ongoing economic uncertainties both domestically and globally. Decision Details The MPC's decision was made by a majority, with four out of six members voting to maintain the current repo rate. As a result: - The Standing Deposit Facility (SDF) rate remains at 6.25 per cent. - The Marginal Standing Facility (MSF) rate and the bank rate are steady at 6.75 per cent. Governor's Emphasis on Balanced Monetary Policy Governor Das, in his post-policy press conference, underscored the importance of a balanced approach in monetary policy. He reiterated the MPC's commitment to graduall...

India's Wholesale Inflation Sees Marginal Rise in March Introduction: India's wholesale inflation, as measured by the Wholesale Price Index (WPI), experienced a slight uptick in March, marking the fifth consecutive month in positive territory after a prolonged period of negative growth. Official data released on Monday revealed key insights into the country's inflation trends, indicating both challenges and opportunities for the economy. Analysis: The annual rate of inflation, based on the All India Wholesale Price Index, stood at 0.53 percent in March 2024 compared to the same period last year. This positive inflation rate is attributed to several factors, including increased prices of food articles, electricity, crude petroleum, natural gas, machinery, and equipment, among others. While economists note that a modest rise in wholesale inflation can stimulate production incentives for manufacturers, it also underscores the need for careful monitoring to maintain economic st...

RBI Proposes Cash Deposit via UPI and Widens Scope of CBDC RBI's Proposal for Cash Deposits via UPI: The Reserve Bank of India (RBI) has put forth a proposal to facilitate cash deposits in banks through the Unified Payment Interface (UPI) mechanism. Currently, cash deposits in Cash Deposit Machines (CDMs) primarily rely on debit cards. However, building on the success of card-less cash withdrawal using UPI at ATMs, the RBI aims to extend this functionality to cash deposits as well. RBI Governor Shaktikanta Das emphasized that enabling cash deposits via UPI would enhance customer convenience and streamline currency-handling processes at banks. Expansion of UPI Payments through PPI Wallets: In addition to cash deposits, the RBI has proposed allowing UPI payments through Prepaid Payment Instruments (PPI) wallets. Presently, UPI payments from PPIs are limited to using the web or mobile apps provided by the PPI issuer. The proposed measure seeks to permit the use of third-party UPI apps...