IDBI Bank likely to exit PCA list; bank claims fulfills all criteria

The Reserve Bank of India (RBI) may soon bring IDBI Bank out of the Prompt Corrective Action (PCA) list. According to the Zee Business exclusive report, IDBI Bank has recently written a letter to RBI and claimed it fulfills all criteria required to come out of the PCA list. The bank has been in this list since May 2017.

Zee Business reporter Anurag Shah said, "IDBI Bank has recently written a letter to the RBI and claimed it fulfills all criteria required to come out of the PCA list." Shah added that IDBI has reported profitability in last two consecutive quarters of Rs 135 crore and Rs 144 crore. Apart from this, its Provisioning Coverage Ratio (PCR) is to the tune of 94 per cent, which is highest among all Indian banks. IDBI's Capital Adequacy Ratio (CAR) is more than 13 per cent. 

Shah said that since bank is fulfilling all criteria to come out of the PCA list, RBI may soon delist it from there.

Reporting about the liquidity status of the IDBI Bank, Anurag Shah said, "IDBI Bank has got approval to sell 27 per cent stake in its insurance arm, IDBI Federal Insurance. Now, it can sell 23 per cent of the IDBI Federal stake to its strong promoter Aegis, while the rest 4 per cent to Federal Bank. This stake sale will also lead to more liquidity in the bank in coming times and that will definitely bring its CAR further down from existing 13 per cent."

On the benefits to be derived when and if RBI releases IDBI Bank from PCA list, Shah told Zee Business Managing Editor Anil Singhvi, "Once RBI brings IDBI Bank out of the PCA list, it will be able to do corporate lending from which it has been barred since May 2017. Apart from this, it will be useful for the government as well because it has already announced that it will sell its entire stake in the bank. If the bank comes out of the PCA list, they will get better valuations of their share."

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Reserve Bank of India (RBI) Recruitment 2020 for various posts

 

Reserve Bank of India (RBI) has published an Advertisement for below mentioned Posts. Eligible Candidates advised to refer to the official advertisement and apply this post. You can find other details like age limit, educational qualification, selection process, application fee, and how to apply are given below.

Job Details:

Post Name	Vacancy	Age Limit	Eligibility	Experience
Consultant – Applied Mathematics	3	30-40 Years	Master Degree with Mathematics Subject	3 Years
Consultant – Applied Econometrics	3	30-40 Years	Master Degree with Economics / Statistics Subject	3 Years
Economist -Macroeconomic Modelling	1	30-40 Years	Master Degree with Economics / Equivalent Subject	3 Years
Data Analyst / MPD	1	30-40 Years	BE / B.Tech in CS OR Master Degree in Statistics / Econometrics / Mathematics / Mathematical Statistics / Finance / Economics / Computer Science	5 Years
Data Analyst / (DoS-DNBS)	2	30-40 Years
Data Analyst / (DoR-DBR)	2	30-40 Years
Risk Analyst / (DoS- DNBS)	1	30-40 Years	Master Degree in Statistics / Applied Statistics / Economics / Finance / Management	5 Years
Risk Analyst / (DEIO)	2	30-40 Years
IS Auditor	2	30-40 Years	BE / B.Tech / M.Tech / MCA in CS / IT / Equivalent	5 Years
System Administrator	9	25-35 Years
Project Administrator	5	25-35 Years
Network Administrator	6	25-35 Years
Specialist in Forensic Audit	1	30-40 Years	CA / ICWA / MBA Finance / PGDBM	5 Years
Accounts Specialist	1	30-40 Years	CA / ICWA	5 Years

Total No. of Posts: 39

Fee: 

• General / OBC / EWS: 600/-
• SC / ST: 100/-
• Payment Should Be Made Online Only, Through Credit/ Debit Card/ Net Banking

How to Apply ?: 
Interested Candidates may Apply Online Through the official Website.

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Official Website: Click Here

Apply Online: Click Here

Important Dates:

• Starting Date of Online Application: 03-08-2020
• Last Date to Apply Online: 22-08-2020

 

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RBI enhances security features for cheques above ₹50,000: How it will work

Reserve Bank of India (RBI) today announced that it plans to introduce a mechanism called 'Positive Pay' in order to enhance safety features of cheques of value ₹50,000 and above.

The announcement by RBI Governor Shaktikanta Das came in order to keep consumer safety in focus and to lower the cases of fraud and abuse with respect to cheque payment.

Under the mechanism all cheques will be processed for payment by the drawee bank based on information passed on by its customer at the time of issuance of cheque.

Operational guidelines in this regard will be issued separately, Das said.

“Positive Pay is essentially an automated fraud detection tool. Very simply, it matches specific information related to the cheque presented for clearing, such as the cheque number, cheque date, payee name, account number, amount, and other details against a list of cheques previously authorized and issued by the issuer. Unless all the specified components of the cheque match exactly, the cheque will not be cleared," 

How will sitive Pay Mechanism work?

Under the Positive Pay system, an account holder shares the details of issued cheque to bank like Cheque Number, Cheque date, Payee name, Account number, Amount etc along with an image of the front and reverse side of the cheque, before handing it over to the beneficiary.

When the beneficiary submits the cheque for encashment, the cheque details are compared with the details provided to the bank through Positive Pay. If the details match, the cheque is honoured.

This will cover approximately 20% and 80% of total cheques by volume and value, respectively, RBI said in a statement.

On the other hand, ICICI Bank already offers this feature since 2016 via its iMobile application.

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Cooperative banks now subject to regulation by Reserve Bank of India

As an offshoot to the unravelling of Punjab and Maharashtra Cooperative Bank debacle in 2019, the President, in exercise of the powers conferred by Clause (1) of Article 123 of the Constitution of India, promulgated the Banking Regulation (Amendment) Ordinance, 2020 (hereinafter referred to as the “Ordinance”) on 26.06.2020. 

The ordinance has primarily been promulgated for bringing cooperative banks under the supervisory powers of the Reserve Bank of India (hereinafter referred to as “RBI”), in order to protect the interest of depositors across the country and strengthen cooperative banks by improving governance and oversight. The said intention of the central government was first intimated to the public by the finance minister, Nirmala Sitharaman during the presentation of the annual budget of the current financial year.

The ordinance effectively amends the Banking Regulation Act, 1949 (hereinafter referred to as the “Principal Act”) by extending powers already available with the Reserve Bank of India, in respect of other banks, to co-operative Banks as well for better management, sound banking regulation, ensuring professionalism and enabling their access to capital. 

The ordinance does not take away the powers of the state registrars of co-operative societies under state co-operative laws. Furthermore, the ordinance does not affect Primary Agricultural Credit Societies or co-operative societies, having a primary object and principal business of long-term finance for agricultural development, and which do not use the words “bank”, “banker” or “banking” and do not act as drawees of cheques. The ordinance also amends Section 45 of the Principal Act, to enable making of a scheme of reconstruction or amalgamation of a banking company for protecting the interest of the public, depositors and the banking system and for securing its proper management, even without making an order of moratorium, so as to avoid disruption of the financial system.

Prior to the ordinance, the duty to regulate the cooperative banks was shared by the RBI and the respective state registrar’s of the cooperative societies. The role of the registrar was to have a statutory oversight over the incorporation, management, audit and liquidation of the such banks, while the role of the RBI was restricted to overlooking the mere maintenance of cash reserves and capital adequacy. 

It is pertinent to note herein that this is the general regulatory role that RBI usually plays with respect to banks, irrespective of the nature of functioning. Therefore, following the irregularities uncovered in relation to such cooperative banks and with the intention to protect the hard earned money of approximately 8.6 crore depositors panning across 1,540 urban and multi-state cooperative banks, amounting to a total of up to Rs.4.84 lakh crores, the aforementioned ordinance was promulgated by the President of India. The Banking Regulation (Amendment) Bill, 2020 was previously introduced in the House of People on 03.03.2020 but could not be taken for consideration by the House of People due to the coronavirus pandemic.

Most cooperative banks, on account of the mismanagement prevalent therein, led to undercapitalisation and poor management and supervision thereby, leading to losses suffered by the innocent depositors. 

In the past many years, the RBI has been seen to impose restrictions on lending and withdrawals on such banks, that are able to continue to operate with the explicit or implicit support from the government for years. However, subsequently they are wound up and their licence cancelled, thereby, increasing the sufferings of those innocent depositors, until the bank is finally liquidated.

With the promulgation of the ordinance by the President, the banks will now be audited according to the norms of the RBI instead of that of the state registrars. The central bank will also have the power to supersede the board of such banks by taking charge of certain banking actions for an interim period, but such can be done only when the bank in question is found to be in an exceptional circumstance; and with the consultation of the respective state government. The resultant effect of the ordinance is that the state registrars will continue to undertake the administrative functions, that they used to perform earlier, but simultaneously, the cooperative banks of the country have been made more answerable to the RBI.

The Principal Act provides that RBI may apply to the central government to place a banking company under a moratorium, during which, no legal action can be initiated or continued against the bank for a period of up to six months. Further, the bank cannot make any payment or discharge liabilities during this period. The ordinance, however, adds that during the period of moratorium, the bank cannot grant any loans or make investments in any credit instruments.

The Principal Act also stipulates that during the period of moratorium, RBI may prepare a scheme for reconstruction or amalgamation of the bank, if it is satisfied that such an order is needed to secure proper management of the bank, or in the interest of depositors, general public, or the banking system. However, the ordinance allows RBI to initiate such a scheme as mentioned above, without imposing a moratorium.

It is also pertinent to herein that the ordinance provides that a cooperative bank, with the prior approval of the RBI and such other conditions as mentioned therein, may issue equity shares, preference shares, or special shares on face value or at a premium to its members or to any other person residing within its area of operation, by way of public issue or private placements. Further, it may issue unsecured debentures or bonds or other like securities with maturity of not less than ten years to such persons.

In view of the aforesaid changes, the ordinance is, indeed, a positive move taken by the central government, with a view to help and end the misery of depositors by protecting their money deposited in such cooperative banks so that they do not have to face any inconveniences in the form of restrictions on daily withdrawals, as was seen in the Punjab and Maharashtra Cooperative Bank fiasco. Such a move would not only give the RBI more power to regulate cooperative banks but also safeguard the money of the depositors.

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RBI extends directions for three Urban Co-Operative banks

The Reserve Bank of India (RBI) has on July 30 extended its directions for three urban cooperative banks – the Vasantdada Nagari Sahakari Bank, the Kapol Cooperative Bank and the Maratha Sahakari Bank – all from Maharashtra.

The central bank in separate notifications for the latter two, said that extension should not “per-se be construed to imply that it is satisfied of substantive improvement in the financial position of the aforementioned banks,” the Hindu BusinessLine reported.

For the Vasantdada Nagari Sahakari Bank in Osmanabad, which closed in November 2017, the RBI has extended period of directions by two months to September 30, 2020 from August 1, 2020 – subject to review.

The central bank clarified that this should “not per se be construed as cancellation of banking license by it. The bank will continue to undertake banking business with restrictions till its financial position improves.”

For The Kapol Cooperative Bank in Mumbai, which closed in March 2017, the RBI has extended validity of directions by six months till January 31, 2021 from August 1, 2020. This will be subject to review.

For the Maratha Sahakari Bank in Mumbai, which has been under RBI directions since its closure in August 2016, the period of directions has been extended for five months from August 1, 2020 till December 31, 2020.

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RBI Committee suggests some points on ATM transactions

 A committee appointed by the Reserve Bank of India (RBI) has recommended an increase in inter-change charges for all transactions carried out on automated teller machines (ATMs) across the country, Moneylife reported.

The report stated that the committee wants to cap the withdrawal limit at Rs 5,000 per transaction and wants to levy charges if a person wants to withdraw an amount bigger than this.

The committee's report, according to Moneylife, is not in public domain but was accessed by a Hyderabad-based techie named Srikanth L who filed an appeal under the Right to Information (RTI) to access the report.

The committee, which was appointed last year to review ATM inter-change fee structure, did submit its recommendations to the central bank, but it is not known whether the RBI has accepted them.

According to the Moneylife report, the committee recommended an increase of 16 percent, or Rs 2, to Rs 17 for financial transactions and to Rs 7 from Rs 5 for non-financial transactions at ATMs in all centres with a population of one million and above.

For usage in ATMs at other centres, with a population less than one million, the committee recommended charges to be increased to 24 percent on a blended basis.

It also observed the cost-effectiveness of ATMs as compared to in-branch transactions.

"Due to the convenience of usage of ATMs, the number of withdrawal transactions at ATMs per customer is higher as compared to that at the branch, hence the comparison of a cost of single ATM transactions with single branch transaction may not be appropriate," the report stated.

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PMC Bank withdrawal limit raised To Rs.1 lakh amid corona virus crisis

The Reserve Bank of India on Friday raised the withdrawal limit for depositors at the crisis-hit Punjab and Maharashtra Cooperative Bank (PMC Bank). Depositors will now be able to withdraw up to Rs 1 lakh, as against the existing threshold of Rs 50,000. The central bank also extended restrictions on PMC Bank by another six months, to December 23, 2020. PMC Bank's resolution process has been affected by the COVID 19-induced lockdown, the RBI said in a statement.

"Further, on a review of the bank's liquidity position, its ability to pay the depositors and with a view to mitigating the difficulties of the depositors during the prevailing COVID-19 situation, it has also been decided to further enhance the limit for withdrawal to Rs 1,00,000 per depositor, inclusive of Rs 50,000 allowed earlier," the RBI said.

The relaxation in the withdrawal limit will enable 84 per cent of the bank's depositors to withdraw their entire account balance, the regulator further said.

The RBI had imposed restrictions on PMC Bank in September last year citing "major financial irregularities, failure of internal control and systems of the bank and wrong/under-reporting of its exposures under various Off-site Surveillance reports".

Putting the co-operative bank under its lens, the Reserve Bank of India barred PMC Bank from renewing or granting any loans, or making investments without its prior approval.

The bank, over a long period of time, had given over Rs 6,500 crore in loans to real estate company HDIL, which was 73 per cent of its total advances. The loans turned sour with a shift in the fortunes of the now-bankrupt company.

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Moratorium extension of 3 months by RBI has two sides; the second one is ugly for banks

Governor Das had announced a three-month moratorium for all term loan repayments between March 1 and May 31 at his last address in April.

The loan moratorium will be extended till August 31, says RBI governor Shaktikanta Das. This makes it a six-month moratorium. He added that the lending institutions are being permitted to restore the margins for working capital to the origin level by March 31, 2021.

"The surprise move by the RBI to reduce repo rate to 4 percent from 4.4 percent followed by an extension of the loan moratorium by another three months is a welcome step and can provide solace to the ailing economy whereby EMI burden for the borrowers would be somewhat lowered and would also allow them to defer EMI payments by another three months. For corporate borrowers too, the increase in group exposure limit of banks to 30 percent from 25 percent will bring some relief," said Rajesh Agarwal, Head of Research at Aum Capital.

"The fall in bold yield after the announcement is positive news, the committee's decision to continue with its accommodative stance is further good news but the point remains that even after so much of liquidity, the banks are reluctant to take additional risk and that has resulted in a muted credit growth," he added.

"RBI, which has been proactive in recent times, has risen to the occasion by advancing the policy meet to cut policy rates by 40bp. Also, the unequivocal statement that monetary policy will continue to be accommodative till growth revives sends positive signals. The fact that the central bank has refrained from giving a GDP growth figure is a reflection of the complexity in giving projections with the present growth models," said VK Vijayakumar- Chief Investment Strategist at Geojit Financial Services.

"Extension of the moratorium announced earlier by another 3 months is a relief. A takeaway from the policy announcement is that the stress in the banking sector will continue," he added.

For banks, the extension of moratorium by another three months has two sides. A clear picture on the asset quality of the lenders will now emerge only by March 2021, instead of September 2020. There is a risk of the moral hazard issue creeping in, as borrowers who have the ability to pay, may even opt for moratorium. And for MFIs and NBFCs catering to the bottom-of-the-pyramid customers, the risk of repayment behaviour getting disturbed is higher.

On the positive side, the moratorium extension gives more time to customers (professionals, small businesses, MSMEs and corporates) for recovery in earnings/repayment capacity in an easing lockdown scenario. Thus, the probability of them slipping buckets after the end of moratorium on August 31 diminishes, and therefore the NPL spike for lenders could be lower than what is anticipated now.

The moratorium extension also gives time to lenders to strengthen their collection infrastructure for retail products as restrictions on physical collection/follow-up eases out and collection agencies would have had their migrant workforce back.

For working capital facilities, interest payment has been deferred by another three months, in line with extension of moratorium on terms loans. The accumulated interest for the deferment period can be covered into a funded interest term loan payable be end of the current fiscal. Thus borrowers need not pay accumulated interest in one shot immediately after the deferment period, which is a big relief for them.

While the RBI governor Shaktikanta Das announced that the three-month term loan moratorium has been extended till August 31, it is to be noted that individual banks have the right to take a decision on whether this will be allowed for all borrowers. It is only an enabling provision and not a mandate.

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RBI cancels licence of Mumbai based Co-operative Bank, Bank has 97% NPA

The Reserve Bank of India (RBI) on Saturday said it has cancelled the licence of The CKP Co-operative Bank Ltd for reasons including, the lack of any viable revival plan and functioning “in a manner detrimental to the public interest and interest of the depositors".

According to RBI, the cooperative bank cannot accept or repay deposits, with immediate effect. Moreover, with the cancellation of licence and start of liquidation proceedings, the process of paying the depositors will be as per the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961.

“On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs.5,00,000 from the DICGC as per usual terms and conditions," the central bank said.

The bank’s total deposits stood at Rs.485.56 crore as on November 2019 and its loan book stood at Rs.161.17 crore in the same period.

The affairs of the bank, RBI said, were and are being conducted in a manner detrimental to the public interest and interest of the depositors and that the general character of the management of the bank is prejudicial to the interest of depositors as also public interest.

RBI said that through its order on 28 April, it has cancelled the licence of the cooperative bank to carry on banking business, with effect from the close of business on 30 April. “The Registrar of Co-operative Societies, Pune, Maharashtra, has also been requested to issue an order for winding up the affairs of The CKP Co-operative Bank Ltd., Mumbai and appoint a liquidator for the bank," RBI said.

The central bank also outlined six reasons for its action. The financial position of the bank, RBI said, is highly adverse and unsustainable and there is no concrete revival plan or proposal for merger with another bank.

Secondly, the bank does not satisfy the requirement of minimum capital and reserves. It is also not in a position to pay its present and future depositors.

“The bank’s efforts for revival have been far from adequate though the bank has been given ample time and opportunity and dispensations. No merger proposal has been received in respect of the bank. Thus, in all likelihood, public interest would be adversely affected if the bank were allowed to carry on its business any further," RBI said.

In May 2014, RBI had put curbs on The CKP Co-operative Bank under Section 35A of the Banking Regulation Act, capping deposit withdrawals at Rs.1,000. In September last year, similar actions were taken in the case of Punjab and Maharashtra Co-operative (PMC) Bank.

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RBI's surprise announcement : 10 things to know

Reserve Bank of India (RBI) Governor Shaktikanta Das slashed the key lending rate by 75 basis points (0.75 percentage point) in an emergency move on Friday, to counter the economic fallout from the rapid spread of the deadly coronavirus pandemic. The move came as the country entered the third day of nationwide lockdown to curb the spread of the virus, following an unscheduled meeting of its Monetary Policy Committee, which was originally scheduled to conduct a bi-monthly review early next month. Four out of the six members of the Monetary Policy Committee voted in favour of the move. "The economic outlook globally is uncertain and obviously negative... Financial stability is the topmost priority of the RBI in this crisis," said Shaktikanta Das.

Here are 10 things to know about the RBI's announcement:

1.   The magnitude of the cut in repo rate - the key interest rate at which the RBI lends short-term funds to commercial banks - was the highest under Shaktikanta Das so far. The largest cut he had delivered was of 35 basis points in August last year.

2.  The RBI Governor also announced a cut of 100 basis points in the cash reserve ratio(CRR) for a period of one year, a step he said will ensure sufficient liquidity in the system. CRR or cash reserve ratio is the amount of cash commercial banks have to mandatorily park with the Reserve Bank of India. "This would release liquidity worth Rs 1,37,000 crore within banks," the RBI Governor said.

3.  It also permitted all commercial banks and lending institutions to allow a three-month moratorium on all loans, in view of the ongoing lockdown to protect the 130 crore people in the country from the deadly virus. "Banks should do all they can to keep credit flowing," Mr Das added. 

4.  The priority is to undertake "strong and purposeful action" to protect the economy, and there is a need for all stakeholders to fight against the coronavirus pandemic, Mr Das said. 

5.  The surprise moves came as India entered the third day of a 21-day countrywide lockdown to curb the rapid spread of the coronavirus pandemic. The RBI Governor-headed Monetary Policy Committee was originally scheduled to meet early next month.

6.  "Indian banking system is safe and sound... In spite of the challenging environment, I remain optimistic," the RBI Governor said. 

7.   The RBI has already infused Rs 2.7 lakh crore into the country's financial system since the February policy meeting, the Governor said. The central bank's overall liquidity injection stands at 3.2 per cent of GDP, he said.

8.  He said the RBI will continue to be vigilant and take "whatever steps necessary" to mitigate the impact of the coronavirus on the economy.

9.   On Thursday, Finance Minister Nirmala Sitharaman had announced a Rs 1.7 lakh-crore fiscal package to support the poor through direct cash transfers and food security measures, without giving details on how the programme will be funded.

10. India is staring at the worst annual rate of gross domestic product (GDP) expansion recorded since the 2008-09 global financial crisis, and many economists have anticipated a further blow to the economy thanks to the COVID-19 outbreak.

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AIBEA Supports For Government Undertaking of 'Yes Bank', Demands Accountability of RBI

All India Bank Employees' Association (AIBEA) on Saturday said the Reserve Bank must be held accountable and the government should start taking all the private sector banks under its fold.

"At the same time, in order to protect the interest of the depositors and bank's clients, Yes Bank should be immediately brought under the public sector. One by one private banks, which are being glorified by the government, are failing. It is high time that the government should take a call and repeat 1969 - all the private banks should be brought under public sector," said C H Venkatachalam, General Secretary, AIBEA.

"The fact that Yes Bank has been ailing with various problems including issues of divergence, non-disclosures, mounting bad loans, inadequate capital, inability to augment capital, etc.

"But the RBI took its own sweet time and after a lot of damage, it has announced the moratorium creating panic amongst the depositors."

The bank union said the RBI, being the regulator, cannot be unaware of the ongoing in Yes Bank.

"If today, the bank has to be closed down due to mismanagement, the RBI cannot extricate itself from the responsibility. Every time, the RBI is failing to take timely steps to prevent such bank debacles. Same thing was observed during United Western Bank and Global Trust Bank," Venketachalam said.

The AIBEA said there were repeated audit reports which pointed out glaring lapses and yet the RBI did no act. Same thing has happened now.

"The government must make RBI answerable and accountable. It is strange that the RBI is putting various banks under Prompt Corrective Action - PCA restrictions. In fact, we feel that the government should bring the RBI under PCA norms," he added.

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RBI launches new prepaid payment instrument for digital transactions up to Rs 10,000

Reserve Bank of India has given Indian consumers a new option to make their daily payments at local shops and retail outlets for the purchase of daily household goods and services.

In a bid to give increased impetus to small ticket digital payments RBI on Tuesday has introduced a new Prepaid Payment Instrument (PPI) which will come with a monthly rechargeble limit of Rs 10000 and can be used only for making retail payments.

"To give impetus to small value digital payments and for enhanced user experience, it has been decided to introduce a new type of semi-closed PPI..." the central bank announced in press release on Tuesday. "These PPIs shall be used only for purchase of goods and services and not for funds transfer."

The newly introduced payment instrument can be issued by banks and existing non bank PPI players. These companies would be able to verify credentials of customers seeking to open their PPI accounts using an OTP sent to user's verified mobile number and a digital identification document recognized by the Department of Revenue, the banking regulator said.

"The minimum details shall necessarily include a mobile number verified with One Time Pin (OTP) and a self-declaration of name and unique identity/ identification number of any ‘mandatory document’ or ‘officially valid document’ (OVD) listed in the ‘Master Direction - Know Your Customer (KYC) Direction," according to the central bank.

This will come as a boost especially for wallet companies such as Paytm and Phonepe that have reeled due to high costs of KYC compliance since the Supreme Court denied them permission to access Aadhar database to complete full KYC authentication.

The PPI can be used for a monthly limit of Rs. 10000 and the amount can only be uploaded only from bank account linked with customer's verified mobile number. Furthermore, RBI has also fixed an annual limit of Rs 1.2 lakh that can be recharged on these accounts.

RBI governor Shaktikanta Das had spoken about the possible launch of such an instrument while making his Monetary Policy speech on December 5. The governor had emphasised on the need for a seamless, easy to issue payment instrument to increase the use of digital payments at small merchant locations where typically the failure rate of transactions are known to be high.

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Key points from RBI policy meets

Reserve Bank of India (RBI) is currently on a rate cutting spree as the central bank has reduced the repo rate -- the rate at which it lends to banks -- for the fifth time in a row. After this reduction of 25 basis points (bps), which overall translates into 135 bps or 1.35 percentage points this year, the repo rate now stands at 5.15 per cent.

Here's are the key takeaways from the monetary policy committee (MPC) meet:

Rate cut may bring cheer among borrowers:

When the RBI cuts rates, banks are expected to pass on the benefit to consumers and reduce interest rates on home, auto, personal or other loans which may result in lower EMIs (equated monthly instalments).

As the RBI has compelled banks to align all their retail loans to external benchmarks, and a majority of lenders have adopted the repo rate as the benchmark, the cut will likely bring cheer to borrowers.

Any scope for another rate cut?

The central bank has maintained its "accommodative" stance. "The Reserve Bank will continue the 'accommodative' stance as long as it is required to revive the growth," RBI governor Das said .

This leaves borrowers with a hope that that the key lending rate may fall further.

Shaktikanta Das on PMC Bank crisis:

"As soon as this issue came to the central bank's notice, the RBI has acted very swiftly. One incident should not be used to generalise the state of all cooperative banks. Banking system sound, stable and there's no reason to panic," Das stated on Punjab and Maharashtra Cooperative (PMC) Bank crisis.

RBI governor on 'single-use plastic ban':

Just seconds before the MPC media briefing was about to get over, the RBI governor was congratulated for opting "plastic free folder and water bottle". To which the governor smiled and replied: "We've decided and we've in fact issued a circular internally for doing away with single-use plastic."

Fall in economic growth projection:

The Reserve Bank sharply cut its economic growth projection for this fiscal to 6.1 per cent from 6.9 per cent earlier, but expressed hope that the growth will recover in the second half of 2019-20.

The central bank's estimates come in the wake of GDP growth sliding to a six-year low of 5 per cent in the June quarter, on a massive slowdown in consumption and private sector investments.

Micro-lenders' borrowers:

On the regulation and supervision front, the RBI decided to increase the household limits for micro-lenders' borrowers, and also raise the cap to Rs 1.25 lakh per eligible borrower from the previous Rs 1 lakh.

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