RBI has further raised the interest rate ceiling on NRI deposits by 75bps. The interest rates on FCNR(B) deposits now stands at Libor +100bps while that on the NR(E)RA deposits is now at Libor +175bps.
Given the continuation of liquidity pressures being faced by the mutual fund and NBFC segment, the RBI has extended the period under which banks can avail liquidity support upto 1.5% of their incremental deposits to lend to this segment to March 2009.
The RBI’s special re-finance facility which allows banks to avail liquidity support upto 1% of their NDTL has now been extended to provide finance to the micro and small enterprises.
RBI cut in general provisioning requirement to the normal 0.4% from (1) 1.0% on standard advances for residential housing loan beyond Rs2mn and (2) 2% on standard advances in commercial real estate, personal loans including outstanding credit card receivables, loans [Are We making a case for small sub-prime here in India ?] and advances qualifying as capital market exposure and non-deposit taking systemically important non-bank financial companies (NBFCs). It also cut risk weights on banks’ exposures to unrated claims on corporates, commercial real estate and NBFCs to 100% from 150%.
By the way are they really done by the RBI Governor or by the Finance Ministry ? I wonder 🙂