Latest RBI Updates in June 2015- Download in PDF

    Latest RBI Updates in June 2015- Download in PDF
    Latest RBI Updates in June 2015- Download in PDF:
    List of Latest RBI Updates in June 2015 was given here, Candidates those who are preparing for upcoming RBI Assistant Exam 2015 can also download this material in PDF.

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    Meena  Hemchandra  appointed as executive director of RBI:
    The RBI, in June 2015, appointed Meena Hemchandra as the executive director who would be in charge of department of banking supervision. She will also be in charge of department of non-banking supervision and department of co- operative banking supervision.
    • Prior to this appointment, Meena Hemchandra was in charge of department of supervision.
    • She has also been principal of Reserve Bank’s College of Agriculture Banking at Pune. 

    RBI issues final guidelines for 6-year and 13-year Interest Rate Futures:

    The RBI, on 12 June 2015, issued the final guidelines for the 6-year and 13-year cash settled Interest Rate Future (IRF) on government securities with residual maturity of 4-8 years and 11-15 years respectively under the Interest Rate Future (Reserve Bank) (Amendment) Directions, 2015. For this purpose, RBI amended the Interest Rate Futures (reserve Bank) Direction, 2013.

    RBI Guidelines on IRF
    For the 6-year cash settled IRF contracts, the underlying shall be a coupon bearing government security of  face value of 100 rupees and the residual maturity of 6-years on the expiry of futures contract.
    • For the 13-year cash settled IRF contracts, the underlying can be a coupon bearing government security of face value of 100 rupees and residual maturity will be between 11 and 15 years in the expiry of futures contract.
    • Moreover, the RBI also expanded the residual maturity for the existing 10-years cash settled IRF from 9-11 years to 8-11 years to provide market participants a greater choice and flexibility to hedge their interest rate risk across different tenors.

    RBI issues Draft Framework on Issuance of Rupee linked Bonds Overseas:

    The RBI, on 9 June 2015, issued Draft Framework on Issuance of Rupee linked Bonds Overseas. It is intended to permit Indian corporate and International Financial Institutions (IFIs) to issue rupee-linked bonds overseas.

    RBI announces Strategic Debt Restructuring Scheme:
    The RBI, on 8 June 2015, announced Strategic Debt Restructuring (SDR) Scheme which allows banks and non-banking lending institutions to convert their loans into equity stake. The scheme will benefit all Scheduled Commercial Banks, excluding Regional Rural Banks (RRBs), all-India term-lending and Refinancing Institutions including Export-Import (EXIM) Bank and National Housing Bank(NHB) and National Bank for Agriculture and Rural Development (NABARD).

    RBI announced the scheme against the backdrop of huge surge in bad loans or Non Performing Assets (NPAs) in the banking system. As per an estimate, the Gross NPAs may rise to 5.9 percent of total advances during 2015-16 against 4.4 percent during 2014-15.NPAs are those assets, where Interest and/or installment of principal remain overdue for a period of more than 90 days in respect of a term loan.

    RBI permits cross holding in infrastructure bonds:
    The RBI, on 1 June 2015, allowed cross holding in long-term infrastructure bonds. With this, now banks would be able to cross hold these bonds among themselves for financing infrastructure and affordable housing loans, which earlier was not permitted. The move was taken amidst the concerns that such prohibition on cross-holding was inhibiting the liquidity and tradability of these bonds, as banks are participants in the debt market.

    • Banks investment in such bonds will not be treated as assets with the banking system in India for the purpose of calculation of Net Demand and Time Liability (NDTL).
    • Such investment will not be held under Held to Maturity (HTM) category.

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