RBI raises policy rates by 25 basis points to tame inflation

Increase in rates by the RBI is expected to make loans, including housing, auto and corporate loans, dearer. The apex bank has also raised inflation projection to 8% for March-end against 7% estimated earlier

Mumbai: The Reserve Bank of India (RBI) today raised its short term lending and borrowing rates, for the eighth time since March 2010, by 25 basis points in a bid to rein in inflation, reports PTI.

The short term lending rate (repo) has been increased from 6.50% to 6.75%, while the short-term borrowing rate (reverse repo) has been raised to 5.75% from 5.50%.

Increase in rates by the RBI is expected to make loans, including housing, auto and corporate loans, dearer.

Keeping in view the liquidity situation, the central bank has kept the cash reserve ratio (CRR), the amount which lenders are required to keep with the RBI in cash, unchanged at 6%.

The RBI has raised inflation projection to 8% for March-end against 7% estimated earlier.

"After a slight moderation in January, headline WPI inflation reversed in February 2011 accompanied by a sharp increase in non-food manufactured products inflation," RBI said in its mid-quarterly review announced today.

The overall inflation increased marginally to 8.31% in February, from 8.23% a month ago.

The policy initiatives, RBI said, are aimed at reining in demand-side inflationary pressures and contain the spill-over of food and commodity price hike to other sectors.

It further said that the central bank would continue with its policy to contain rate of price rise.

"Based on the current and evolving growth and inflation scenario, the Reserve Bank is likely to persist with the current anti-inflationary stance," it said.

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COMMENTS

vehiclemicrofinancing

6 years ago

This makes financing and loan lending cost more. It will surely affect the pricing of the basic commodities and will raise the inflation rate.

Black money case: ED moves SC seeking Hassan’s remand

On 11th March, the ED had suffered a major setback when judge Tahaliyani rejected its plea for Mr Khan's 14-day custody and granted him bail after observing contents of some of its "confidential" documents were "available on Wikipedia"

New Delhi: Stung by a Mumbai court's rejection of its plea for custodial interrogation of Hassan Ali Khan, the Enforcement Directorate (ED) today moved the Supreme Court challenging refusal of its plea against the Pune-based stud farm owner allegedly involved in stashing huge amount of black money abroad, reports PTI.

A bench of justices B Sudershan Reddy and SS Nijjar is expected to take up the plea at 2pm. The bench had earlier chided the Centre for failing to subject Mr Khan and other alleged money launderers to custodial interrogation.

In pursuant of the apex court's direction, the ED had moved a remand application before the court of principal sessions judge ML Tahaliyani on 11th March, which was rejected the directorate's plea on the ground that the agency could not gather sufficient material in justification of its plea.

On 11th March, the ED had suffered a major setback when judge Tahaliyani rejected its plea for Mr Khan's 14-day custodial interrogation and granted him bail after observing contents of some of its "confidential" documents were "available on Wikipedia".

Mr Khan is facing a Rs70,000 crore tax demand notice from the Income-Tax Department as well as the ED probe.

The ED had arrested 53-year-old Mr Khan on 7th March after being pulled up by the Supreme Court for its failure to ensure his custodial interrogation.

While rejecting the ED's remand application, judge Tahaliyani had observed that had it had failed to back its charges in a money laundering case under the Prevention of Money Laundering Act.

"No material evidence has been presented by the ED that shows any scheduled offence has been committed by Mr Khan," justice Tahaliyani had observed, ordering that Mr Khan be enlarged on conditional bail.

He, however, barred Mr Khan from leaving the city for the next five days during which he was directed to report to the ED office every day.

The court had also rejected the argument that $7,00,000 was transferred from Mr Khan's Sarasin Bank account in Switzerland to the account of SK Financial Services based in United Kingdom maintained by Barclays Bank London through Citibank New York and accepted defence lawyer IP Bagadia' s contention that the account holder was one HA Kahn and not Hassan Ali Khan.

On the charge that Mr Khan had hoarded $8 billion in UBS, Switzerland, something which the bank has denied, the Mumbai court had said there was no material to show that money was transferred to UBS and that tainted money was shown as untainted.

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Four-fifths of firms in India offer flexi work options: Study

Four-fifth of the companies in India and 81% of firms globally offer their staff flexible working conditions, related to office hours or location, says a recent study by Regus, a workplace solutions provider

New Delhi: If you are tired of working graveyard shifts and think you could perform better during the day, fret not your company may soon lend an ear to your grievances, following in the footsteps of their competitors, reports PTI.

Four-fifth of the companies in India and 81% of firms globally offer their staff flexible working conditions, related to office hours or location, says a recent study by Regus, a workplace solutions provider.

To contain costs and boost profitability, companies are increasingly following flexible working patterns that gives top priority to an employee's choice of shift timings as well as place of work.

"60% of the businesses globally believe that flexible working practices, whether related to office hours or location, are more cost efficient than fixed office working. This has added to the evident carbon reduction benefits resulting from reduced commuting distances," says the study.

With technology easing out the barriers of time, speed and distance, companies in India are also allowing their employees to work from home.

"We have fixed office hours but on certain occasions, we do allow our employees to guide the work from home over a telecon. This is to ensure employee welfare as well ass support to the office projects," asserts Raj Sharma, HR head at Era Group.

Flexible working patterns are also recognized as effective in motivating and rewarding family-oriented employees. 70% of firms globally consider flexible working to be more family friendly.

"Four out of ten businesses believe that flexible working improves employee productivity (41%) and a third believe that motivation also increases when flexi-working is allowed," points the study.

"Higher the comfort levels, better the results and also fewer the chances of errors. If an employee is given a choice in the hours and place of his working, his stress and frustration level goes down tremendously.

"Plus, his engagement level would be highly different," points out Samir Parikh, consultant psychiatrist with Max Healthcare, who also deals with corporate clients during counselling and life-skills training workshops.

27-year-old software programmer Garima Vishnoi works for an IT company in Pune even though it does not have a branch office in the city.

"After my wedding, I had to shift Pune and my company offered me to work from home as it does not have a branch here," she says.

Particularly of interest to emerging economies, the study points out that over one-fifth of businesses globally (21%) believe that flexible working practices are an asset to them in periods of sudden growth as they allow rapid scalability.

Flexible working also results in reduced overheads and office staff achieving an improved work-life balance.

"That flexible work has become the norm is good news all round. Over 17,000 business respondents were interviewed across 80 countries during February 2011. Respondents of over 1 million business people worldwide are highly representative of senior managers and owners in businesses across the globe," says Madhusudan Thakur, country head of Regus.

59% of firms in India say they believe that flexible working costs less than fixed office working.

"Flexible working can not be applied to all the departments of the company. As in production or client servicing it is very difficult to opt for it but when opted for other departments like sales and other field jobs it contributes in cutting down the cost to the company," says Pradeep Gopte, vice president, HR at a Delhi-based PR firm.

Over eight out of 10 businesses offering flexible working report that their staff has a significantly better work-life balance, improving satisfaction and motivation; almost four in 10 believe that it improves staff productivity, and three in 10 say that it helps them scale rapidly to cope with rapid growth.

Almost four in 10 flexible working businesses also feel that their policy helps them access a wider talent pool and a fourth say it helps them employ people in more remote locations.

At the same time, the survey also finds that trust remains a major hurdle for many companies offering flexible working. 57% of Indian businesses only offer this privilege to senior staff.

"It is recognised that a major obstacle to greater economic growth in India is problems with the transport infrastructure and the fact that India's entrepreneurs and employees waste hours each day in traffic. It is disappointing to still see some companies letting lack of trust hold them back from flexible working for all employees," adds Mr Thakur.

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