Page 8 - Banking Finance February 2025

RBI CORNER

HDFC Bank's group companies, includ- accurate reflection of secured transac- Rupee strengthens against
ing HDFC Mutual Fund, HDFC Life In- tions," Deputy Governor Michael
surance, HDFC Pension Management, Debabrata Patra stated during a post- dollar driven by global
HDFC ERGO General Insurance, and policy media interaction. USD retreat and RBI ac-
HDFC Securities. tions
India's Credit Growth Be- The Indian currency appreciated more
IndusInd Bank Fined by
low Global Benchmarks than a qua rupee to 86.32/dollar, mim-
RBI for Non-Compliance India's credit-to-GDP ratio, which in- icking a global retreat in the USD in
The RBI has imposed a penalty of Rs cludes credit extended by banks and reflecting the impact of central bank
27.30 lakh on IndusInd Bank for non- NBFCs, stands at 90.1%, below the ad- dollar-rupee buy-sell swa forward pre-
compliance with norms related to in- vanced economies (AEs) and emerging miums, traders said.
terest rates on deposits. Following a market economies (EMEs) average. Ac- The rupee, which has had a backloaded
statutory inspection of the bank's fi- cording to the RBI's latest "Trends and retreat against the do nearly 10
nancial position as of March 31, 2023, Progress in Banking" report, India has months of stability through 2024, ad-
the RBI found irregularities, including headroom to expand credit, with the vanced 26 pais previous close of 86.58.
the opening of savings accounts for optimal threshold estimated at 113.1%.
The currency was under pressure ear-
ineligible entities.
lier in the day, but likely by the Reserve
RBI injects over Rs 1.5 lakh Bank of India (RBI) helped erase losses.
RBI Introduces Secured crore via VRR auctions, The index, which had breached past
Overnight Rupee Rate buybacks 110 recently to a two-year-plu settled

(SORR) The Reserve Bank of India (RBI) con- at 107.9 through the trading session in
Mumbai.
The Reserve Bank of India has ducted two overnight variable rate The one year forward premium was at
launched a new interest rate bench- repo (VRR) auction in addition to a pre-
2.27%, its lowest leve 2024.
mark, the Secured Overnight Rupee announced buyback as liquidity deficit
Rate (SORR), to enhance the credibil- persisted in the banking system. RBI injects Rs 76,000 crore
ity of overnight market funding rates. RBI injected more than Rs. 1.45 lakh
Based on secured money market crore via two overnight variable rate more to boost liquidity,
transactions, including market repo repo (VRR) auctions and a buyback rein in call money rates
and tri-party repo (TREPS), SORR will operation of ?9,666 crore. The RBI will
represent 98% of overnight money conduct a similar VRR auction on Fri- The Reserve Bank of India on Monday
market activity, encompassing both injected Rs. 75,772 crore into the bank-
day for Rs. 2 lakh crore, along with a ing system, increasing liquidity through
bank and non-bank participation.
14- day auction for Rs. 1.75 lakh crore, a variable rate repo (VRR) operation,
"This benchmark will provide a more maturing on February 7. and said it would hold a Rs. 1.5-lakh
crore auction through the same instru-
RBI Mandates Beneficiary Look-Up for RTGS & NEFT ment.
by April 2025 The Rs. 75,772-crore liquidity will be
reversed. The move is aimed at easing
The Reserve Bank of India has directed banks to implement a beneficiary the liquidity conditions and prevent the
name verification facility for RTGS and NEFT transfers by April 1, 2025. This call money rates from shooting sharply
feature will allow customers to confirm the beneficiary's account name via
above the current repo rate of 6.5%.
internet and mobile banking services before initiating transfers.
The central bank held a VRR auction
"This initiative aims to minimize errors and prevent fraud by enabling on Monday to inject 1.25 lakh crore in
remitters to verify account details prior to transactions," the RBI stated. the system, but it received offers for
The facility will also be accessible for in-branch transactions and mirrors simi- nearly half the amount - 75,772 crore.
lar features available for UPI and IMPS systems. It accepted all bids at 6.51%.

8 | 2025 | FEBRUARY | BANKING FINANCE