Alok Prasad, chief executive officer (CEO) of the Micro Finance Institutions Network (MFin), a lobby group for India’s Rs.30,000 crore microfinance industry, is a happy man. The Reserve Bank of India (RBI) last week gave his organization the status of a self-regulatory organization (SRO) for those microfinance institutions (MFIs) that operate as non-banking financial companies (NBFCs).
With Narendra Modi-led government at the helm, most bankers feel acche din aane wale hai (good times are coming). Their belief has been strengthened after some of them met finance minister Arun Jaitley last week. The key takeaway from the meeting is that the government will do everything possible to push stalled projects for completion.
There are two reasons why Shikha Sharma, managing director and chief executive officer (CEO) of Axis Bank Ltd, India’s third largest private lender, considers this the toughest stint in her 34-year-old career. First, though she spent 29 years with the ICICI group in diverse roles—from setting up its investment banking arm to running consumer lending and personal services units as well as its insurance company for close to a decade—she was not a seasoned commercial banker before she joined Axis Bank. She has just completed five years in the current role.
India’s consumer price inflation rose 7.31% in June, a 43-month low, and sharply lower than consensus market expectations of 7.95%.
The change in the language of the Reserve Bank of India’s (RBI) second bi-monthly policy review last week is unmistakable. The stance has become softer and the central bank’s concerns for sagging growth are pronounced. A stable government, in place after three decades, can play a critical role in containing inflation and pushing for economic growth by appreciating the importance of fiscal consolidation.
In sync with market expectations, the Indian central bank on Tuesday left its key policy rate as well as banks’ cash reserve ratio (CRR), or the portion of deposits that commercial banks need to keep with the Reserve Bank of India (RBI), unchanged. But it has cut the banks’ mandatory investment in government bonds, or the so-called statutory liquidity ratio (SLR), by half a percentage point to 22.5%.
In the March quarter, the Indian economy grew 4.6%, making it the eighth successive quarter in which the world’s third largest economy in terms of purchasing power parity registered growth below 5%. For the year ended 31 March, growth was 4.