RBI Dilemma

Should RBI cut rates further; MPC minutes show a clear divide The minutes of the Monetary Policy Committee (MPC) published during the week give a clear idea about the discussions within the MPC before the rate cut decision was taken. The MPC minutes document detailed discussions among the 6 members of the MPC and the…

HDFC FMPs

Should investors roll over FMPs or just redeem it at a discount? Fixed maturity plans (FMPs) came under a cloud in the last few weeks after leading AMCs admitted to their inability to honor their FMP commitments. The reason was a huge exposure to the Essel Group, which is owned by Subhash Chandra of the…

Jet Airways

It is definitely the beginning of the end for Jet Airways Just around midnight on the 16th of April Jet announced temporary suspension of all its flights. That was a euphemism for a shutdown in operations due to paucity of funds with the airline.  When the airline sent an SOS for an infusion of Rs.1000…

Bank NPAs

There is a need to strike a balance between freedom and license The talk of town in the last few days was the Supreme Court order striking down the RBI circular issued on February 12th 2018. The circular had made it mandatory that any borrower above Rs.2,000 crore defaulting on the loan for more than…

Monetary Policy

Monetary Policy goes much beyond rates and liquidity The monetary policy had little by way of surprise when it announced a 25 basis point cut in rates. That was already factored in the market. In fact, the market was hoping for a bigger cut or a shift in stance to “accommodative”. That was not to…

Sensex at 40

Why the Sensex at 40 is also the story of 40 years of India On April 01st, the Sensex completed a full 40 years of existence. Over the last 40 years, nothing has captured the sentiments of the market and the undertone of economic shifts better than the Sensex. Like most indices, the Sensex has…

Loan Benchmarking

It looks like external benchmarking for loans is off the table for now Back in the December monetary policy announced by the RBI there was special mention of the banks shifting to an external benchmark for pricing loans. This was part of the policy statement and was expected to make a big difference to the…

Dollar Swaps

Dollar Swaps could actually hit three birds with one stone In the last week of March, the RBI introduced the new concept of dollar swap auctions in the Indian money markets. The first issue of dollar swaps attracted buying interest of $16.3 billion against the offer size of $5 billion. That surely means that there…

BREXIT Deal

For the third time, BREXIT Deal was rejected and so will BREXIT For the third time in succession, the proposed BREXIT deal was rejected by the British Parliament. Theresa May counted on a mix of Conservatives, North Irish party and Labor dissidents to help the BREXIT deal sail through. In fact, Theresa May had even…

SEBI Board Meet

SEBI sets the tone for some far-reaching shifts in capital markets Of late, the SEBI board meetings have been a crucial forum for key decisions. The latest SEBI board meet on March 01st has also made some important decisions for the capital markets. Let us look at the implications of four such critical decisions. SEBI…