Deputy Governor Paul Beaudry explains why the 2% target remains the centrepiece of the Bank of Canada’s inflation-targeting framework.

The importance of the Bank of Canada’s 2% inflation target — Deputy Governor Paul Beaudry speaks before the Alberta School of Business, University of Alberta (18:10 (ET) approx.).

On Thursday, February 16, 2023, Paul Beaudry, Deputy Governor of the Bank of Canada, will speak before the Alberta School of Business, University of Alberta.

Deputy Governor Paul Beaudry discusses the benefits of being near the Bank’s 2% inflation target and the dangers of straying from it for too long.

On Thursday, February 16, 2023, the Governor of the Bank of Canada, Tiff Macklem, will appear before the House of Commons Standing Committee on Finance.

On Wednesday, February 8, 2023, the Bank of Canada will publish a summary of the deliberations that took place ahead of its interest rate decision on January 25, 2023.

Tiff Macklem, Governor of the Bank of Canada, gave an interview to Erik Hertzberg of Bloomberg News.

Tiff Macklem, Governor of the Bank of Canada, gave an interview to Annie Lafrance of Le Soleil.

How monetary policy works — Governor Tiff Macklem takes questions from reporters following his remarks (14:00 (ET) approx.).

This is an account of the deliberations of the Bank of Canada’s Governing Council leading to the monetary policy decision on January 25, 2023.

The Market Participants Survey results are based on questionnaire responses from about 30 financial market participants.

Inflation in Canada is still too high but has declined from its peak. As the effects of higher interest rates continue to spread through the economy, and with declines in energy prices and improved supply chains, inflation is projected to fall to around 3% in the middle of 2023 and reach the 2% target in 2024.

Results from the fourth-quarter 2022 Business Outlook Survey and the Business Leaders’ Pulse surveys from October 2022 through January 2023 show that business sentiment has continued to weaken. As a result of rising interest rates, firms’ sales expectations and investment plans are softening. Capacity pressures have moderated from elevated levels. In this context, firms expect a slower pace of price increases.

Results of the fourth-quarter survey show that consumers have reduced their purchases of a broad range of goods and services in response to rising inflation and increases in interest rates. High food prices are a particular source of frustration for households. Most consumers anticipate a mild or moderate recession in the next 12 months. And although labour markets continue to be strong, some early signals suggest consumers think this strength will fade. Meanwhile, short-term inflation expectations remain elevated this quarter, but consumers have varied opinions about where inflation will be in five years. More people than before the pandemic expect deflation.

Quarterly Financial Report - Third Quarter 2022 - For the period ended September 30, 2022

The Bank of Canada is publishing a new set of indicators of financial vulnerabilities. This will allow households, the private sector, financial authorities and governments to better understand and monitor the evolution of two key vulnerabilities in the financial system: the elevated level of household indebtedness and high house prices.

While inflation has come off its peak, it remains too high. As the economy responds to higher interest rates and as the effects of elevated commodity prices and supply disruptions fade, the Bank expects inflation to fall to about 3% in late 2023, then return to 2% in 2024.

Business confidence has softened, according to results from the third-quarter 2022 Business Outlook Survey and the July through October 2022 Business Leaders’ Pulse surveys. Many firms expect slower sales growth as interest rates rise and demand growth shifts closer to pre-pandemic levels. Early signs suggest that pressures on prices and wages have started to ease, but firms’ inflation expectations remain high.

This survey took place between August 2 and August 23, 2022. Follow-up interviews took place in September. Expectations for inflation one to two years ahead have continued to rise because consumers anticipate supply chain disruptions and elevated oil prices will persist. In contrast, expectations for inflation five years ahead have eased to near pre-pandemic levels. Still, consumers are more divided this quarter about where inflation will end up in the long term.

This paper brings novel insights into group coordination and price dynamics in complex environments. We implement a chaotic overlapping-generation model in the lab and find that group coordination is always on the steady state or on the two-cycle and that behavior is non-monotonic.

This paper looks at the role mortgage brokers play in helping borrowers generate quotes and qualify for credit. We find that, on average, borrowers that engage with a mortgage broker pay lower interest rates. However, in about 15% of cases, borrowers are steered towards longer amortizing mortgages than they would have chosen absent a broker. Since mortgages with longer amortization have higher total interest costs over the entire life of the mortgage, this steering is expensive.

We investigate the effect of inflation on output and welfare in the laboratory. Consistent with monetary theory, we find that inflation acts as a tax on monetary exchange and reduces output and welfare.

We examine the relationship between firms’ performance and credit constraints affecting export market entry. Using administrative Canadian firm-level data, our findings show that new exporters (a) increase their productivity, (b) raise their leverage ratio and (c) increase investment. We estimate that 48 percent of Canadian manufacturers face binding credit constraints when deciding whether to enter export markets.

We review the nascent but fast-growing literature on central bank digital currencies (CBDCs), focusing on their potential impacts on private banks. We evaluate these impacts in three areas of traditional banking: payments, lending and liquidity and maturity transformation. We also take a broader look at CBDCs and highlight two promising directions for future research.

The Market Participants Survey (MPS) gathers financial market participants’ expectations for key macroeconomic and financial variables and for monetary policy. This staff analytical note describes the MPS’s objectives and main features, its process and design, and how Bank of Canada staff use the results.

Using micro data from the U.S. Consumer Expenditure Survey and Current Population Survey, I document that government spending shocks affect individuals differently over the life cycle.

This paper quantifies the impact of hurricanes on seaborne international trade to the United States. Matching the timing of hurricane–trade route intersections with monthly U.S. port-level trade data, we isolate the unanticipated effects of a hurricane hitting a trade route using two separate identification schemes: an event study and a local projection.

Funding structures affected the amount of financial stress different countries and sectors experienced during the spread of COVID-19 in early 2020. Policy responses targeting specific vulnerabilities were more effective at mitigating this stress than those supporting banks or the economy more broadly.

The Risk Amplification Macro Model (RAMM) is a new nonlinear two-country dynamic model that captures rare but severe adverse shocks. The RAMM can be used to assess the financial stability implications of both domestic and foreign-originated risk scenarios.

We build a tractable New Keynesian model to study and compare four types of monetary and fiscal policy: policy rate adjustments, quantitative easing, lump-sum fiscal transfers and government spending. We find that tax-financed fiscal policy is more stimulative than debt-financed policy, and optimal policy coordination needs at least two of these four policy instruments.

Media Release Number 2023-05: Today’s Payments System Board meeting discussed ASX’s self-assessment against the Financial Stability Standards (FSS), the Bank’s framework for supervising payment system safety and resilience, payments system regulatory reform, the future of the cheque system, the future of the Bulk Electronic Clearing System (BECS), international and domestic work on central bank digital currency (CBDC), and the 12 October technology outage at the Bank.

Speech by Philip Lowe, Governor, Canberra. This speech is being broadcast live.

Dr HC Coombs was Governor of Australia's central bank for nearly 20 years. His appointment followed significant roles in Australia's war-time administration and post-war reconstruction, where he was an architect of Australia's international full employment policy, known as the 'Positive Approach'. When appointed Governor of the central bank in 1949, Coombs remained committed to the pursuit of full employment. Influenced by Keynes, he sought to maintain aggregate demand and supply in 'reasonable balance', something the Reserve Bank continues to do today. After retiring from the Bank in 1968, Coombs continued to promote the arts in Australia and the rights and welfare of First Nations Australians. He became a senior adviser to the Whitlam Government and chaired the Royal Commission on Australian Government Administration – a fitting conclusion for someone often described as the nation's greatest public servant. This article considers the life and career of HC Coombs, and complements the series of records that have been released on Unreserved.

One of the core objectives of the Reserve Bank's public education program is to improve economic literacy. While the social benefits of economic literacy are well established, defining what is meant by this term is not straightforward and has been the subject of debate over many decades. This article explores the meaning of 'economic literacy'. To arrive at a working definition, it discusses the economic principles that should be understood for someone to be considered economically literate, along with the topics they should be familiar with and the ways of thinking that we would expect them to display. In doing so, it distinguishes between economic and financial literacy. The article concludes by posing questions for future research on how economic literacy in Australia might be measured and how it might be supported.

The Australian tourism industry is gradually recovering from the COVID-19 pandemic that brought global travel to an unprecedented standstill. International tourism fell sharply in early 2020 and has only slowly recovered since restrictions were lifted in the first half of this year. By contrast, domestic tourism spending bounced back quickly as local restrictions eased and is now above pre-pandemic levels. This article outlines the recovery in the Australian tourism industry following the pandemic, the challenges the industry has faced in reopening, and the uncertainties around the outlook for the tourism industry over the next few years.

Household and business financial stress has significant implications for financial stability and monetary policy. However, high-frequency and timely indicators of emerging signs of financial stress are not readily available. To address this information gap, the Reserve Bank has developed novel measures of financial stress based on news, search and social media data. This article describes these new metrics and how they can capture meaningful changes in financial conditions and, in some cases, predict traditional measures of financial stress, such as loan arrears. Going forward, these indices will continue to be monitored for early signs of financial difficulties.

Stablecoins – a type of crypto-asset designed to maintain a stable value – have grown in popularity over recent years. Market developments, however, have highlighted the risks stablecoins can pose to investors, particularly if they are not fully backed by high-quality liquid assets. Stablecoins currently pose limited risks to the broader Australian financial system, but this could change if they become more widely used in the future – for example, in payments and other financial services. As such, regulators across the world are seeking to bring greater clarity to the regulatory treatment of stablecoins, not only to manage risks but also to support innovation in the market. This article considers the rise of stablecoins, the risks they pose and the response of regulators so far.

Australian Government Securities (AGS) play an important role in the transmission of monetary policy given that yields on these securities provide a benchmark for other interest rates across the economy. The Bank has a large amount of AGS and 'semi-government' bonds issued by state and territory borrowing authorities (semis) on its balance sheet as a result of purchases to support the economy through the COVID-19 pandemic. To support the efficient functioning of these markets, the Bank operates a securities lending facility (SLF) from which eligible counterparties can borrow AGS and semis; the Bank also operates an SLF on behalf of the Australia Office of Financial Management (AOFM). The use of these SLFs picked up noticeably following the end of the Bank's yield target and bond purchase program. This article discusses these facilities in detail, including why market participants might use them and the recent increase in borrowing.

The response of housing prices to financing conditions is determined by the effect on the marginal buyer, not the average household. I use heterogeneous willingness to pay (WTP) data from a stated preference experiment in Fuster and Zafar (2021) to estimate the effects of changes in mortgage rates and collateral constraints on housing prices by analysing the structure of housing demand curves. This work builds on their research, which focused on average changes in WTP. Relaxing down payment constraints has a large average effect on WTP, but the effect on price is less than half as large. Financially constrained households tend to respond more to relaxed constraints, but those households often have WTPs that are too low to affect market prices. Changing the mortgage rate has the same average effect on WTPs and on market prices, because there is no systematic relationship between a household's response to mortgage rates and their location on the demand curve. I use a heterogeneous user cost model of individual WTPs to understand how household heterogeneity determines the structure of overall housing demand. An empirical model using observable household characteristics allows the experimental findings to be applied to other household survey data to simulate the effects of credit conditions. The simulated effects of easing collateral constraints in Australia are fairly stable over the past 20 years, and show a similar pattern to the US results.

Housing Loan Payments – E13 From 9 February 2023, a new statistical table will be published. Table E13 – Housing Loan Payments – will provide quarterly data on aggregate payments made by households on housing loans. This table uses data from the Economic Financial Statistics (EFS) collection. The data will normally be published on the second Thursday in February, May, August and November. Household Finances – Selected Ratios – E2 From 9 February 2023, the following series will be removed from Table E2 – Household Finances – Selected Ratios. Housing interest payments to income Instead, a new series on housing interest charged to household disposable income will be published in a new statistical table E13, named Housing Loan Payments, using data from the Economic and Financial Statistics (EFS) collection. More information will be available in the notes of the publications.

The Monetary Policy Committee today increased the Official Cash Rate (OCR) from 4.25% to 4.75%.

The Reserve Bank of New Zealand – Te Pūtea Matua has given an update on ATM (cash machine) and other cash services in regions affected by Cyclone Gabrielle.

The Reserve Bank of New Zealand - Te Pūtea Matua is seeking feedback on the second stage of its liquidity policy review.

Money plays an essential role in the economy. It allows people to store value over time, exchange with each other, and measure the relative value of things.

The Reserve Bank of New Zealand - Te Pūtea Matua has published its Enforcement Guidelines and Investigation Guidelines, completing its enhanced Enforcement Framework.

The Reserve Bank of New Zealand – Te Pūtea Matua and the Minister of Finance have agreed to a new framework for managing foreign reserves.

Proposed changes to our policy on exposures of banks we supervise to connected entities have been progressed after a public consultation.

The Reserve Bank of New Zealand - Te Pūtea Matua today announced the remaining 2024 dates for releasing its quarterly Monetary Policy Statement (MPS), Monetary Policy Review (MPR) decisions and the 6-monthly Financial Stability Report (FSR).

The annual re-weighting of the Trade-Weighted Index (TWI) takes effect on Tuesday 13 December 2022.

Retailers are being reminded to take the time to train cash handling staff on the fast and easy ways to spot fake banknotes.

We are seeking feedback on our proposed approach to the opportunities and challenges from new forms of private money such as cryptoassets, including stablecoins.

Following a public consultation, we have identified our preferred policy option for mutual banks to issue capital instruments.

The Reserve Bank has decided not to introduce new mortgage bond standards through Residential Mortgage Obligations (RMO)

The Reserve Bank of New Zealand – Te Pūtea Matua has launched a second consultation as part of the 5-yearly review of the Monetary Policy Committee’s (MPC) Remit that guides monetary policy decisions.

Mr Harris has provided answers in writing following questions from a media reporter about the Committee’s processes and his role as an external member of the Committee.

(Amount in ₹ crore, Rate in Per cent) MONEY MARKETS@         Volume (One Leg) Weighted Average Rate Range A. Overnight Segment (I+II+III+IV) 546,829.31 6.52 1.50-6.75      I. Call Money 12,697.64 6.58 4.85-6.70      II. Triparty Repo 370,091.60 6.51 6.20-6.75      III. Market Repo 164,040.07 6.52 1.50-6.75      IV. Repo in Corporate Bond 0.00 - - B. Term Segment            I. Notice Money** 72.00 6.08 5.90-6.50      II. Term Money@@ 142.00 - 6.25-7.00      III. Triparty Repo 145.00 6.51 6.46-6.65      IV. Market Repo 0.00 - -      V. Repo in Corporate Bond 0.00 - - RBI OPERATIONS@   Auction Date Tenor (Days) Maturity Date Amount Current Rate / Cut off Rate C. Liquidity Adjustment Facility (LAF), Marginal Standing Facility (MSF) & Standing Deposit Facility (SDF) I. Today's Operations 1. Fixed Rate           2. Variable Rate&             (I) Main Operation                (a) Repo                (b) Reverse Repo             (II) Fine Tuning Operations                (a) Repo                (b) Reverse Repo           3. MSF Tue, 21/02/2023 1 Wed, 22/02/2023 983.00 6.75 4. SDFΔ Tue, 21/02/2023 1 Wed, 22/02/2023 76,053.00 6.25 5. Net liquidity injected from today's operations [injection (+)/absorption (-)]*       -75,070.00   II. Outstanding Operations 1. Fixed Rate           2. Variable Rate&             (I) Main Operation                (a) Repo Fri, 10/02/2023 14 Fri, 24/02/2023 50,000.00 6.56      (b) Reverse Repo             (II) Fine Tuning Operations                (a) Repo                (b) Reverse Repo           3. MSF           4. SDFΔ           5. Long-Term Repo Operations# Mon, 02/03/2020 1094 Wed, 01/03/2023 253.00 5.15   Mon, 09/03/2020 1093 Tue, 07/03/2023 484.00 5.15   Wed, 18/03/2020 1094 Fri, 17/03/2023 294.00 5.15 6. Targeted Long Term Repo Operations^ Fri, 27/03/2020 1092 Fri, 24/03/2023 11,987.00 4.40   Fri, 03/04/2020 1095 Mon, 03/04/2023 16,423.00 4.40   Thu, 09/04/2020 1093 Fri, 07/04/2023 17,512.00 4.40   Fri, 17/04/2020 1091 Thu, 13/04/2023 19,746.00 4.40 7. Targeted Long Term Repo Operations 2.0^ Thu, 23/04/2020 1093 Fri, 21/04/2023 7,450.00 4.40 8. On Tap Targeted Long Term Repo Operations€ Mon, 22/03/2021 1095 Thu, 21/03/2024 5,000.00 4.00   Mon, 14/06/2021 1096 Fri, 14/06/2024 320.00 4.00   Mon, 30/08/2021 1095 Thu, 29/08/2024 50.00 4.00   Mon, 13/09/2021 1095 Thu, 12/09/2024 200.00 4.00   Mon, 27/09/2021 1095 Thu, 26/09/2024 600.00 4.00   Mon, 04/10/2021 1095 Thu, 03/10/2024 350.00 4.00   Mon, 15/11/2021 1095 Thu, 14/11/2024 250.00 4.00   Mon, 27/12/2021 1095 Thu, 26/12/2024 2,275.00 4.00 9. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£ Mon, 17/05/2021 1095 Thu, 16/05/2024 400.00 4.00 Tue, 15/06/2021 1095 Fri, 14/06/2024 490.00 4.00 Thu, 15/07/2021 1093 Fri, 12/07/2024 750.00 4.00 Tue, 17/08/2021 1095 Fri, 16/08/2024 250.00 4.00 Wed, 15/09/2021 1094 Fri, 13/09/2024 150.00 4.00 Mon, 15/11/2021 1095 Thu, 14/11/2024 105.00 4.00 Mon, 22/11/2021 1095 Thu, 21/11/2024 100.00 4.00 Mon, 29/11/2021 1095 Thu, 28/11/2024 305.00 4.00 Mon, 13/12/2021 1095 Thu, 12/12/2024 150.00 4.00 Mon, 20/12/2021 1095 Thu, 19/12/2024 100.00 4.00 Mon, 27/12/2021 1095 Thu, 26/12/2024 255.00 4.00 D. Standing Liquidity Facility (SLF) Availed from RBI$       10,480.08   E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     146,729.08   F. Net liquidity injected (outstanding including today's operations) [injection (+)/absorption (-)]*     71,659.08   RESERVE POSITION@ G. Cash Reserves Position of Scheduled Commercial Banks      (i) Cash balances with RBI as on 21/02/2023 809,832.66        (ii) Average daily cash reserve requirement for the fortnight ending 24/02/2023 807,876.00   H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 21/02/2023 0.00   I. Net durable liquidity [surplus (+)/deficit (-)] as on 27/01/2023 233,547.00   @ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL). - Not Applicable / No Transaction. ** Relates to uncollateralized transactions of 2 to 14 days tenor. @@ Relates to uncollateralized transactions of 15 days to one year tenor. $ Includes refinance facilities extended by RBI. & As per the Press Release No. 2019-2020/1900 dated February 06, 2020. Δ As per the Press Release No. 2022-2023/41 dated April 08, 2022. * Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo-SDF. # As per the Press Release No. 2020-2021/287 dated September 04, 2020. ^ As per the Press Release No. 2020-2021/605 dated November 06, 2020 and Press Release No. 2021-2022/1324 dated December 08, 2021. € As per the Press Release No. 2020-2021/520 dated October 21, 2020, Press Release No. 2020-2021/763 dated December 11, 2020, Press Release No. 2020-2021/1057 dated February 05, 2021 and Press Release No. 2021-2022/695 dated August 13, 2021. ¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015. £ As per the Press Release No. 2021-2022/181 dated May 07, 2021 and Press Release No. 2021-2022/1023 dated October 11, 2021. Ajit Prasad             Director (Communications) Press Release: 2022-2023/1766

The Reserve Bank of India (RBI) had announced in the Statement on Developmental and Regulatory Policies dated February 08, 2023, a facility to enable all in-bound travellers visiting India to make local payments using Unified Payments Interface (UPI) while they are in India. This facility is made available from today. To start with, it is available to travelers from G-20 countries, at select international airports (Bengaluru, Mumbai and New Delhi). Eligible travellers would be issued Prepaid Payment Instruments (PPI) wallets linked to UPI for making payments at merchant outlets. Delegates from G20 countries can also avail this facility at various meeting venues. To begin with, ICICI Bank, IDFC First Bank and two non-bank PPI issuers, Pine Labs Private Limited and Transcorp International Limited will issue UPI linked wallets. Travellers visiting India can now experience the convenience of UPI payments at over five crore merchant outlets across India, that accept QR Code-based UPI payments. (Yogesh Dayal)      Chief General Manager Press Release: 2022-2023/1765

The Result of the auction of State Government Securities held on February 21, 2023. (Amount in ₹ Crore)   ANDHRA PRADESH 2030 ANDHRA PRADESH 2033 ASSAM 2033* BIHAR 2033 Notified Amount 1000 1000 800 2000 Tenure 7 10 10 10 Competitive Bids Received         (i) No. 90 79 59 91 (ii) Amount 3430 3740.50 2863 7468 Cut-off Yield (%) 7.70 7.71  - 7.68 Competitive Bids Accepted         (i) No. 36 28  - 9 (ii) Amount 937.598 965.490  - 1919.684 Partial Allotment Percentage of Competitive Bids         (i) Percentage 85.4148 29.5768  - 49.9392 (ii) No. (14 bids) (13 bids)  - (5 bids) Non - Competitive Bids Received         (i) No. 11 8 9 9 (ii) Amount 62.402 34.51 55.562 80.316 Non-Competitive Price (₹) 100.05 100.08 - 100.17 Non-Competitive Bids Accepted         (i) No. 11 8  - 9 (ii) Amount 62.402 34.51  - 80.316 Partial Allotment Percentage of Non-Competitive Bids         (i) Percentage  -  -  -  - (ii) No.  -  -  -  - Weighted Average Yield (%) 7.6909 7.6979  - 7.6557 Total Allotment Amount 1000 1000 0 2000   GUJARAT 2030 HARYANA 2033 HIMACHAL PRADESH 2032** HIMACHAL PRADESH 2038 Notified Amount 1000 1000 700 1300 Tenure 7 10 9 15 Competitive Bids Received         (i) No. 161 88 63 36 (ii) Amount 7735 6165 3395 4605 Cut-off Yield (%) 7.66 7.65  - 7.59 Competitive Bids Accepted         (i) No. 17 1  - 3 (ii) Amount 900 900  - 1281.979 Partial Allotment Percentage of Competitive Bids         (i) Percentage 66.1355 90  - 49.3069 (ii) No. (12 bids) (1 bid)  - (3 bids) Non - Competitive Bids Received         (i) No. 17 11 3 3 (ii) Amount 106.087 104.336 12.028 18.021 Non-Competitive Price (₹) 100 100 - 100 Non-Competitive Bids Accepted         (i) No. 17 11  - 3 (ii) Amount 100 100  - 18.021 Partial Allotment Percentage of Non-Competitive Bids         (i) Percentage 94.2623 95.8442  -  - (ii) No. (17 bids) (10 bids)  -  - Weighted Average Yield (%) 7.6592 7.6500  - 7.5900 Total Allotment Amount 1000 1000 0 1300   MADHYA PRADESH 2038 PUNJAB 2039*** PUNJAB 2040*** SIKKIM 2033 Notified Amount 3000 500 500 437 Tenure 15 16 17 10 Competitive Bids Received         (i) No. 69 14 11 28 (ii) Amount 8460 2275 2110 2016 Cut-off Yield (%) 7.59 7.59  - 7.66 Competitive Bids Accepted         (i) No. 6 2  - 1 (ii) Amount 2928.98 999.996  - 422.41 Partial Allotment Percentage of Competitive Bids         (i) Percentage 94.3928 99.9996  - 96.6613 (ii) No. (5 bids) (2 bids)  - (1 bid) Non - Competitive Bids Received         (i) No. 7 1 2 8 (ii) Amount 71.02 0.004 0.019 14.59 Non-Competitive Price (₹) 100 100 - 100 Non-Competitive Bids Accepted         (i) No. 7 1  - 8 (ii) Amount 71.02 0.004  - 14.59 Partial Allotment Percentage of Non-Competitive Bids         (i) Percentage  -  -  -  - (ii) No.  -  -  -  - Weighted Average Yield (%) 7.5898 7.5900  - 7.6600 Total Allotment Amount 3000 1000 0 437   TAMILNADU 2052 TAMILNADU 2053 UTTAR PRADESH 2033 Total Notified Amount 2000 2000 3500 20737 Tenure Re-issue of 7.33% TAMILNADU SDL 2052 issued on March 09, 2022 30 10   Competitive Bids Received         (i) No. 21 24 162 996 (ii) Amount 5840 6460 12895 79457.500 Cut-off Yield (%) 7.5281 7.53 7.66   Competitive Bids Accepted         (i) No. 3 3 11 120 (ii) Amount 1999.963 1999.372 3303.056 18558.528 Partial Allotment Percentage of Competitive Bids         (i) Percentage 27.7768 24.9843 50.6389   (ii) No. (2 bids) (2 bids) (7 bids)   Non - Competitive Bids Received         (i) No. 2 2 11 104 (ii) Amount 0.037 0.628 196.944 756.504 Non-Competitive Price (₹) 97.73 100.06 100.09   Non-Competitive Bids Accepted         (i) No. 2 2 11 90 (ii) Amount 0.037 0.628 196.944 678.472 Partial Allotment Percentage of Non-Competitive Bids         (i) Percentage  -  -  -   (ii) No.  -  -  -   Weighted Average Yield (%) 7.5229 7.5250 7.6476   Total Allotment Amount 2000 2000 3500 19237 *Assam has not accepted any amount in the 10-year security **Himachal Pradesh has not accepted any amount in the 9-year security***Punjab has not accepted any amount in the 17-year security and has accepted an additional amount of ₹500 Crore in the 16-year security Ajit Prasad             Director (Communications) Press Release: 2022-2023/1764

Sr. No State Amount to be raised (₹ Crore) Amount Accepted (₹ Crore) Cut off Price (₹) / Yield (%) Tenure (Years) 1 Andhra Pradesh 1000 1000 7.70 07 1000 1000 7.71 10 2 Assam* 800 - - 10 3 Bihar 2000 2000 7.68 10 4 Gujarat 1000 1000 7.66 07 5 Haryana 1000 1000 7.65 10 6 Himachal Pradesh** 700 - - 09 1300 1300 7.59 15 7 Madhya Pradesh 3000 3000 7.59 15 8 Punjab*** 500 1000 7.59 16 500 - - 17 9 Sikkim 437 437 7.66 10 10 Tamil Nadu 2000 2000 7.53 30 2000 2000 97.67/7.5281 Reissue of 7.33% Tamil Nadu SDL 2052 issued on March 09, 2022 11 Uttar Pradesh 3500 3500 7.66 10   TOTAL 20,737 19,237     *Assam has not accepted any amount in the 10-year security **Himachal Pradesh has not accepted any amount in the 9-year security ***Punjab has not accepted any amount in the 17-year security and has accepted an additional amount of ₹500 Crore in the 16-year security Ajit Prasad            Director (Communications) Press Release: 2022-2023/1763

Hon’ble Prime Minister of India, Shri Narendra Modi and Hon’ble Prime Minister of Singapore, Mr. Lee Hsien Loong today witnessed the launch of cross-border linkage between India and Singapore using their respective Fast Payment Systems, viz. Unified Payments Interface (UPI) and PayNow. The facility was launched through token transactions by Reserve Bank Governor, Shri Shaktikanta Das and Managing Director of Monetary Authority of Singapore, Mr. Ravi Menon using the UPI-PayNow linkage. 2. The UPI-PayNow linkage will enable users of the two fast payment systems in either country to make convenient, safe, instant, and cost-effective cross-border funds transfers using their respective mobile apps. Funds held in bank accounts or e-wallets can be transferred to / from India using just the UPI-id, mobile number, or Virtual Payment Address (VPA). 3. To begin with, State Bank of India, Indian Overseas Bank, Indian Bank and ICICI Bank will facilitate both inward and outward remittances while Axis Bank and DBS India will facilitate inward remittances. For Singapore users, the service will be made available through DBS-Singapore and Liquid Group (a non-bank financial institution). More number of banks will be included in the linkage over time. 4. Customers of the above participating banks can undertake cross-border remittances to Singapore using the bank’s mobile banking app / internet banking. To begin with, an Indian user can remit up to ₹60,000 in a day (equivalent to around SGD 1,000). At the time of making the transaction, the system shall dynamically calculate and display the amount in both the currencies for convenience of the user. 5. The UPI-PayNow linkage is the product of extensive collaboration between Reserve Bank of India (RBI), Monetary Authority of Singapore (MAS), and Payment System Operators of both countries viz. NPCI International Payments Limited (NIPL) and Banking Computer Services Pte Ltd. (BCS), and participating banks / non-bank financial institution. This interlinkage aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments and will be a significant milestone in the development of infrastructure for cross-border payments between India and Singapore. Further details are available under the Frequently Asked Questions segment at https://www.rbi.org.in/Scripts/FAQView.aspx?Id=156. (Yogesh Dayal)      Chief General Manager Press Release: 2022-2023/1762

(Amount in ₹ crore, Rate in Per cent) MONEY MARKETS@         Volume (One Leg) Weighted Average Rate Range A. Overnight Segment (I+II+III+IV) 548,462.10 6.56 4.60-6.80      I. Call Money 15,945.40 6.61 4.60-6.80      II. Triparty Repo 376,654.60 6.54 6.01-6.68      III. Market Repo 155,787.10 6.59 5.75-6.80      IV. Repo in Corporate Bond 75.00 6.60 6.60-6.60 B. Term Segment            I. Notice Money** 108.75 6.35 5.95-6.70      II. Term Money@@ 302.00 - 6.10-6.80      III. Triparty Repo 0.00 - -      IV. Market Repo 400.00 4.88 4.75-5.00      V. Repo in Corporate Bond 0.00 - - RBI OPERATIONS@   Auction Date Tenor (Days) Maturity Date Amount Current Rate / Cut off Rate C. Liquidity Adjustment Facility (LAF), Marginal Standing Facility (MSF) & Standing Deposit Facility (SDF) I. Today's Operations 1. Fixed Rate           2. Variable Rate&             (I) Main Operation                (a) Repo                (b) Reverse Repo             (II) Fine Tuning Operations                (a) Repo                (b) Reverse Repo           3. MSF Mon, 20/02/2023 1 Tue, 21/02/2023 3,650.00 6.75 4. SDFΔ Mon, 20/02/2023 1 Tue, 21/02/2023 108,858.00 6.25 5. Net liquidity injected from today's operations [injection (+)/absorption (-)]*       -105,208.00   II. Outstanding Operations 1. Fixed Rate           2. Variable Rate&             (I) Main Operation                (a) Repo Fri, 10/02/2023 14 Fri, 24/02/2023 50,000.00 6.56      (b) Reverse Repo             (II) Fine Tuning Operations                (a) Repo                (b) Reverse Repo           3. MSF           4. SDFΔ           5. Long-Term Repo Operations# Mon, 02/03/2020 1094 Wed, 01/03/2023 253.00 5.15   Mon, 09/03/2020 1093 Tue, 07/03/2023 484.00 5.15   Wed, 18/03/2020 1094 Fri, 17/03/2023 294.00 5.15 6. Targeted Long Term Repo Operations^ Fri, 27/03/2020 1092 Fri, 24/03/2023 11,987.00 4.40   Fri, 03/04/2020 1095 Mon, 03/04/2023 16,423.00 4.40   Thu, 09/04/2020 1093 Fri, 07/04/2023 17,512.00 4.40   Fri, 17/04/2020 1091 Thu, 13/04/2023 19,746.00 4.40 7. Targeted Long Term Repo Operations 2.0^ Thu, 23/04/2020 1093 Fri, 21/04/2023 7,450.00 4.40 8. On Tap Targeted Long Term Repo Operations€ Mon, 22/03/2021 1095 Thu, 21/03/2024 5,000.00 4.00   Mon, 14/06/2021 1096 Fri, 14/06/2024 320.00 4.00   Mon, 30/08/2021 1095 Thu, 29/08/2024 50.00 4.00   Mon, 13/09/2021 1095 Thu, 12/09/2024 200.00 4.00   Mon, 27/09/2021 1095 Thu, 26/09/2024 600.00 4.00   Mon, 04/10/2021 1095 Thu, 03/10/2024 350.00 4.00   Mon, 15/11/2021 1095 Thu, 14/11/2024 250.00 4.00   Mon, 27/12/2021 1095 Thu, 26/12/2024 2,275.00 4.00 9. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£ Mon, 17/05/2021 1095 Thu, 16/05/2024 400.00 4.00 Tue, 15/06/2021 1095 Fri, 14/06/2024 490.00 4.00 Thu, 15/07/2021 1093 Fri, 12/07/2024 750.00 4.00 Tue, 17/08/2021 1095 Fri, 16/08/2024 250.00 4.00 Wed, 15/09/2021 1094 Fri, 13/09/2024 150.00 4.00 Mon, 15/11/2021 1095 Thu, 14/11/2024 105.00 4.00 Mon, 22/11/2021 1095 Thu, 21/11/2024 100.00 4.00 Mon, 29/11/2021 1095 Thu, 28/11/2024 305.00 4.00 Mon, 13/12/2021 1095 Thu, 12/12/2024 150.00 4.00 Mon, 20/12/2021 1095 Thu, 19/12/2024 100.00 4.00 Mon, 27/12/2021 1095 Thu, 26/12/2024 255.00 4.00 D. Standing Liquidity Facility (SLF) Availed from RBI$       9,968.83   E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     146,217.83   F. Net liquidity injected (outstanding including today's operations) [injection (+)/absorption (-)]*     41,009.83   RESERVE POSITION@ G. Cash Reserves Position of Scheduled Commercial Banks      (i) Cash balances with RBI as on 20/02/2023 807,735.26        (ii) Average daily cash reserve requirement for the fortnight ending 24/02/2023 807,876.00   H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 20/02/2023 0.00   I. Net durable liquidity [surplus (+)/deficit (-)] as on 27/01/2023 233,547.00   @ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL). - Not Applicable / No Transaction. ** Relates to uncollateralized transactions of 2 to 14 days tenor. @@ Relates to uncollateralized transactions of 15 days to one year tenor. $ Includes refinance facilities extended by RBI. & As per the Press Release No. 2019-2020/1900 dated February 06, 2020. Δ As per the Press Release No. 2022-2023/41 dated April 08, 2022. * Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo-SDF. # As per the Press Release No. 2020-2021/287 dated September 04, 2020. ^ As per the Press Release No. 2020-2021/605 dated November 06, 2020 and Press Release No. 2021-2022/1324 dated December 08, 2021. € As per the Press Release No. 2020-2021/520 dated October 21, 2020, Press Release No. 2020-2021/763 dated December 11, 2020, Press Release No. 2020-2021/1057 dated February 05, 2021 and Press Release No. 2021-2022/695 dated August 13, 2021. ¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015. £ As per the Press Release No. 2021-2022/181 dated May 07, 2021 and Press Release No. 2021-2022/1023 dated October 11, 2021. Ajit Prasad             Director (Communications) Press Release: 2022-2023/1761

The Reserve Bank of India (RBI) has imposed, by an order dated February 15, 2023, a monetary penalty of ₹2.00 lakh (Rupees Two lakh only) on Sudha Co-Operative Urban Bank Ltd., Regd No.599/TH, Suryapet, Telangana (the bank) for non-compliance with directions issued by RBI on Board of Directors, Exposure Norms and Statutory / Other Restrictions and Income Recognition, Asset Classification, Provisioning and Other related Matters as applicable to Urban Co-operative Banks. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949 (AACS), taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI. This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Background The inspection reports of the bank based on its financial position as on March 31, 2019, and March 31, 2020, revealed, inter alia, that the bank had extended loans to directors, resorted to ever-greening of Director related loans and breached single borrower exposure limits. Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the aforesaid directions. After considering the bank’s reply and oral submissions during the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty. (Yogesh Dayal)       Chief General Manager Press Release: 2022-2023/1760

Government of India (GOI) has announced the sale (re-issue) of three dated securities for a notified amount of ₹26,000 crore as per the following details: Sr No Security Date of Repayment Notified Amount (₹ crore) GoI specific Notification Auction Date Settlement Date 1 7.10% GS 2029 Apr 18, 2029 6,000 F.No.4(3)-B(W&M)/2022 dated February 20, 2023 February 24, 2023 (Friday) February 27, 2023 (Monday) 2 7.41% GS 2036 Dec 19, 2036 11,000 3 7.40% GS 2062 Sep 19, 2062 9,000   Total   26,000       2. GoI will have the option to retain additional subscription up to ₹2,000 crore against each security mentioned above. 3. The securities will be sold through Reserve Bank of India Mumbai Office, Fort, Mumbai – 400001. The sale will be subject to the terms and conditions spelt out in the ‘Specific Notification’ mentioned above and the General Notification F.No.4(2)–W&M/2018, dated March 27, 2018. 4. The auction will be conducted using uniform price method for 7.10% GS 2029, 7.41% GS 2036 and multiple price method for 7.40% GS 2062. Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on February 24, 2023 (Friday). The non-competitive bids should be submitted between 10.30 a.m. and 11.00 a.m. and the competitive bids should be submitted between 10.30 a.m. and 11.30 a.m. The result will be announced on the same day and payment by successful bidders will have to be made on February 27, 2023 (Monday). 5. Bids for underwriting of the Additional Competitive Underwriting (ACU) portion can be submitted by ‘Primary Dealers’ from 09.00 a.m. up to 09:30 a.m. on February 24, 2023 (Friday) on the Reserve Bank of India Core Banking Solution (E-Kuber) system. 6. The Stocks will be eligible for “When Issued” trading for a period commencing from February 21 - February 24, 2023. 7. Operational guidelines for Government of India dated securities auction and other details are given in the Annex. Ajit Prasad             Director (Communications) Press Release: 2022-2023/1759 ANNEX Type of Auction 1. For multiple price-based auction, successful bids will get accepted at the respective quoted yield/price for the security. For uniform price-based auction, bids will get accepted at the cut off yield/price accepted in the auction. 2. The auction will be yield based for new security and price based for securities which are re-issued. 3. In case of a Floating Rate Bonds (FRB), the auction will be spread-based for new security and price based for securities which are reissued. At the time of placing bids for new FRB, the spread should be quoted in percentage terms. Minimum Bid Size 4. The Stocks will be issued for a minimum amount of ₹10,000/- (nominal) and in multiples of ₹10,000/- thereafter. Non-Competitive Segment 5. In all the auctions, Government Stock up to 5% of the notified amount of sale will be allotted to the eligible individuals and institutions under the Scheme for Non-competitive Bidding Facility in the Auctions of Government Securities. Individual investors can also place bids as per the non-competitive scheme through the Retail Direct portal (https://rbiretaildirect.org.in). 6. Each bank or Primary Dealer (PD) on the basis of firm orders received from their constituents will submit a single consolidated non-competitive bid on behalf of all its constituents in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system. 7. Allotment under the non-competitive segment to the bank or PD will be at the weighted average rate of yield/price of the successful bids that will emerge in the auction on the basis of the competitive bidding. Submission of Bids 8. Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system. 9. Bids in physical form will not be accepted except in extraordinary circumstances. Business Continuity Plan (BCP)-IT failure 10. Only in the event of system failure, physical bids will be accepted. Such physical bids should be submitted to the Public Debt Office, Mumbai through (email; Phone no: 022-22632527, 022-22701299) in the prescribed form which can be obtained from RBI website (https://www.rbi.org.in/Scripts/BS_ViewForms.aspx) before the auction timing ends. 11. In case of technical difficulties, Core Banking Operations Team should be contacted (email; Phone no: 022-27595666, 022-27595415, 022-27523516). 12. For other auction related difficulties, IDMD auction team can be contacted (email; Phone no: 022-22702431, 022-22705125). Multiple Bids 13. An investor can submit more than one competitive bid in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system. 14. However, the aggregate amount of bids submitted by an investor in an auction should not exceed the notified amount of auction. Decision Making Process 15. On the basis of bids received, the Reserve Bank will determine the minimum price/maximum yield up to which tenders for purchase of Government Stock will be accepted at the auctions. 16. Bids quoted at rates lower than the minimum price/higher than the maximum yield determined by the Reserve Bank of India will be rejected. 17. Reserve Bank of India will have the full discretion to accept or reject any or all bids either wholly or partially without assigning any reason. Issue of Securities 18. Issue of securities to the successful bidders will be by credit to Subsidiary General Ledger Account (SGL) of parties maintaining such account with Reserve Bank of India or in the form of Stock Certificate. Periodicity of Interest Payment 19. Interest on the Government Stock will generally be paid half-yearly other than in case of securities with non-standard maturities. The exact periodicity of coupon payment is invariably mentioned in the specific notification for the issue of security. Underwriting of the Government Securities 20. The underwriting of the Government Securities under auctions by the ‘Primary Dealers’ will be as per the “Revised Scheme of Underwriting Commitment and Liquidity Support” announced by the Reserve Bank vide circular RBI/2007-08/186 dated November 14, 2007 as amended from time to time. Eligibility for Repurchase Transactions (Repo) 21. The Stocks will be eligible for Repurchase Transactions (Repo) as per the conditions mentioned in Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 (Reserve Bank) Directions, 2018 as amended from time to time. Eligibility for ‘When Issued’ Trading 22. The Stocks will be eligible for “When Issued” trading in accordance with the guidelines on ‘When Issued transactions in Central Government Securities’ issued by the Reserve Bank of India vide circular No. RBI/2018-19/25 dated July 24, 2018 as amended from time to time. Investment by Non-Residents 23. Investments by Non-Residents are subject to the guidelines on ‘Fully Accessible Route’ for Investment by Non-residents in Government Securities and other related guidelines as issued by the Reserve Bank from time to time.

The Reserve Bank of India (RBI) has, by an order dated February 15, 2023, imposed a monetary penalty of ₹4.00 lakh (Rupees Four lakh only) on The Satara Sahakari Bank Ltd., Mumbai (the bank) for non-compliance with the directions issued by RBI on ‘Management of Advances and Exposure Norms and Statutory/Other Restrictions-UCBs’. This penalty has been imposed in exercise of powers vested in RBI conferred under section 47 A (1) (c) read with sections 46 (4) (i) and 56 of Banking Regulation Act, 1949 (BR Act), taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI. This action is based on deficiency in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Background The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2021, and examination of the Risk Assessment Report and all related correspondence pertaining to the same, revealed, inter alia, that the bank did not have proper mechanism for monitoring end use of funds and had sanctioned unsecured advances above the permissible limits. In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for contravention of the RBI directions, as stated therein. After considering the bank’s reply to the notice, additional submissions and oral submissions made during the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with the RBI directions were substantiated and warranted imposition of monetary penalty. (Yogesh Dayal)      Chief General Manager Press Release: 2022-2023/1758

Today, the Reserve Bank of India (RBI), vide order dated February 16, 2023, has cancelled the licence of “Garha Co-operative Bank Ltd., Guna, Madhya Pradesh”. Consequently, the bank ceases to carry on banking business, with effect from the close of business on February 20, 2023. The Commissioner Co-operation and Registrar of Cooperative Societies, Madhya Pradesh has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank. The Reserve Bank cancelled the licence of the bank as: The bank does not have adequate capital and earning prospects. As such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949. The bank has failed to comply with the requirements of Sections 22(3) (a), 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949; The continuance of the bank is prejudicial to the interests of its depositors; The bank with its present financial position would be unable to pay its present depositors in full; and Public interest would be adversely affected if the bank is allowed to carry on its banking business any further. 2. Consequent to the cancellation of its licence, “Garha Co-operative Bank Ltd., Guna, Madhya Pradesh” is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect. 3. On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5,00,000/- (Rupees five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961. As per the data submitted by the bank, about 98.4% of the depositors are entitled to receive full amount of their deposits from DICGC. As on December 19, 2022, DICGC has already paid ₹12.37 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank. (Yogesh Dayal)      Chief General Manager Press Release: 2022-2023/1757

The Reserve Bank of India (RBI) has imposed, by an order dated February 14, 2023, a monetary penalty of ₹1.00 lakh (Rupees One lakh only) on Youth Development Co-operative Bank Limited, Kolhapur for non-adherence / violation of All Inclusive Directions imposed on the bank by RBI. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI. This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Background The Risk Assessment report of the bank based on its financial position as on March 31, 2021 revealed inter alia, that the bank had entered into One Time Settlement (OTS) scheme with the borrowers without prior written permission of RBI in non-adherence to the All-Inclusive Directions. Based on the same a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the directions. After considering the bank’s reply and oral submissions during the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty. (Yogesh Dayal)      Chief General Manager Press Release: 2022-2023/1756

The Reserve Bank of India (RBI) has imposed, by an order dated Febryary 14, 2023, a monetary penalty of ₹1.00 lakh (Rupees One lakh only) on Pune People’s Co-operative Bank Limited, Pune (the bank) for contravention of the directions issued by the Reserve Bank of India (RBI) on Interest Rate on Deposits. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI. This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Background The Risk Assessment Report of the bank based on its financial position as on March 31, 2021, revealed inter-alia that the bank did not pay interest on balance amount lying in current accounts of deceased individual depositors/ sole proprietorship from the date of death of the depositor till the date of repayment to the claimant(s). Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the directions. After considering the bank’s written reply to the show cause notice and the oral submissions made during the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty. (Yogesh Dayal)      Chief General Manager Press Release: 2022-2023/1755

The Reserve Bank of India (RBl) has imposed, by an order dated February 14, 2023, a monetary penalty of ₹50,000/- (Rupees Fifty Thousand only) on Shree Samarth Sahakari Bank Ltd., Nashik (the bank) for contravention of/ non-compliance with the directions issued by the RBI to Urban Co-operative Banks on Exposure Norms & Statutory/ Other Restrictions-UCBs and Board of Directors-UCBs. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI. This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Background The Risk Assessment Report of the bank based on its financial position as on March 31, 2022, revealed, inter alia, that the bank had renewed a loan granted to a Director’s relative in contravention of/ non-compliance with the aforesaid directions issued by RBI. Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the directions. After considering the bank's replies and oral submissions made during personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty. (Yogesh Dayal)      Chief General Manager Press Release: 2022-2023/1754

RBI/2022-23/182 DOR.ACC.REC.No.104/21.07.001/2022-23 February 20, 2023 Dear Sir/ Madam, Implementation of Indian Accounting Standards (Ind AS) Please refer to circular DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 on the captioned subject read with paragraph 13 (iii) of Master Circular DOR.SIG.FIN.REC 1/26.03.001/2022-23 dated April 1, 2022 on Asset Reconstruction Companies. 2. It has been observed that consequent to the implementation of Ind AS, some Asset Reconstruction Companies (ARCs) have been recognising management fees even though the said fee had not been realised for more than 180 days. 3. To address the prudential concerns arising from continued recognition of unrealised income, it has been decided that ARCs preparing their financial statements as per Ind AS, shall reduce the following amounts from their net owned funds while calculating the Capital Adequacy Ratio and the amount available for payment of dividend: Management fee recognised during the planning period1 that remains unrealised beyond 180 days from the date of expiry of the planning period. Management fee recognised after the expiry of the planning period that remains unrealised beyond 180 days of such recognition. Any unrealised management fees, notwithstanding the period for which it has remained unrealised, where the net asset value of the Security Receipts has fallen below 50 per cent of the face value. The amount reduced from net owned funds and amount available for payment of dividend shall be net of any specific expected credit loss allowances held on unrealised management fee referred to in sub-paragraphs (a), (b) and (c) and the tax implications thereon, if any. 4. The Audit Committee of the Board (ACB) shall review the extent of unrealised management fee and satisfy itself on the recoverability of the same while finalising the financial statements. It shall be ensured that the management fee is computed strictly in accordance with extant regulations. 5. ARCs shall disclose information on the ageing of the unrealised management fee recognised in their books in the format specified below as part of the Notes to Accounts in the annual financial statements:   As at the end of Current Year As at the end of Previous Year Outstanding amount of unrealised management fee receivable     1. Out of the above, amount outstanding for:     (a) Amounts where the net asset value of the security receipts has fallen below 50 per cent of the face value     (b) Other amounts unrealised for: (i) More than 180 days but upto 1 year (ii) More than 1 year but upto 3 years (iii) More than 3 years     Allowances held for unrealised management fee     Net unrealised management fee receivable     Applicability 6. This circular is applicable to all ARCs preparing their financial statements as per Ind AS. Yours faithfully, (Usha Janakiraman) Chief General Manager 1 Planning period means a period not exceeding six months allowed for formulating a plan for realisation of financial assets acquired for the purpose of reconstruction as defined in clause 2(xii) of Master Circular on Asset Reconstruction Companies dated April 1, 2022, ibid.

RBI/2022-23/181 DOR.ACC.REC.No.103/21.04.018/2022-23 February 20, 2023 Madam / Dear Sir, Reserve Bank of India (Financial Statements - Presentation and Disclosures) Directions, 2021 – Disclosures for State Co-operative Banks and Central Co-operative Banks The Reserve Bank of India (Financial Statements-Presentation and Disclosures) Directions, 2021 (‘Master Direction’) are applicable to Commercial Banks and Primary Urban Co-operative Banks (UCBs). They harmonize the regulatory instructions on presentation and disclosure in financial statements across the banking sector. 2. In consultation with the National Bank for Agriculture and Rural Development (NABARD), it has now been decided to make this Master Direction also applicable to State Cooperative Banks and Central Cooperative Banks (also referred to as ‘District Central Co-operative Banks’). 3. The Master Direction shall apply to State and Central Cooperative Banks (together referred to as ‘Rural Co-operative Banks’ or ‘RCBs’) mutatis mutandis, unless explicitly specified otherwise, from the financial year ending March 31, 2023. Certain disclosure requirements specified in Annex III-A shall be applicable, to RCBs, from the financial year ending March 31, 2024. 4. The Reserve Bank of India (Financial Statements - Presentation and Disclosures) Directions, 2021 stands updated to reflect these changes. Yours faithfully, (Usha Janakiraman) Chief General Manager

RBI/2022-23/180 DOR.MRG.REC.102/00-00-009/2022-23 February 17, 2023 Madam / Sir, Governance, measurement and management of Interest Rate Risk in Banking Book Interest Rate Risk in Banking Book (IRRBB) refers to the current or prospective risk to banks’ capital and earnings arising from adverse movements in interest rates that affect its banking book positions. Excessive IRRBB can pose a significant risk to banks’ current capital base and/or future earnings. These guidelines, accordingly, require banks to measure, monitor, and disclose their exposure to IRRBB. 2. The final guidelines on Interest Rate Risk in Banking Book (IRRBB), in alignment with the revised framework issued by the Basel Committee on Banking Supervision (BCBS), are enclosed in Annex. 3. Commencement (a) The date for implementation will be communicated in due course. Banks are advised to be in preparedness for measuring, monitoring, and disclosing their exposure to interest rate risk in the banking book in terms of this circular. (b) Ahead of the implementation, banks shall submit the disclosures stipulated in Table B of Appendix-3 to the Department of Regulation, Reserve Bank of India (by e-mail: cgmicdor@rbi.org.in) within two months from the end of the respective quarter, as per following schedule: Entities Frequency Return to be submitted from the quarter ended D-SIBs Quarterly March 2023 Other Banks Quarterly June 2023 4. It may be noted that the extant instructions on interest rate risk management issued vide circular DBOD.No.BP.BC.8/21.04.098/99 dated February 10, 1999 on ‘Asset Liability Management (ALM) system’ which require banks to undertake Traditional Gap Analysis and circular DBOD.No.BP.BC.59/21.04.098/2010-11 dated November 04, 2010 on ‘Guidelines on Banks’ Asset Liability Management Framework - Interest Rate Risk’ which require banks to undertake Duration Gap Analysis, shall be phased out post implementation of these guidelines, the details of which shall be advised in due course. Applicability 5. This circular is applicable to all commercial banks (other than Regional Rural Banks, Small Finance Banks, Payments Banks and Local Area Banks). (Usha Janakiraman) Chief General Manager Annex Governance, measurement and management of Interest Rate Risk in Banking Book 1. Introduction 1.1 Interest Rate Risk in Banking Book (IRRBB) refers to the current or prospective risk to banks’ capital and earnings arising from adverse movements in interest rates that affect its banking book positions. When interest rates change, the present value and timing of future cash flows change. These changes in turn affect the underlying value of banks’ rate sensitive assets, liabilities, and off-balance sheet items and, hence, their economic value (EV). Changes in interest rates also affect banks’ earnings by altering interest rate-sensitive income and expenses, affecting their net interest income (NII). Excessive IRRBB can pose a significant risk to banks’ current capital base and/or future earnings if not managed appropriately. These guidelines, accordingly, require banks to measure, monitor, and disclose their exposure to IRRBB in terms of potential change in Economic Value of Equity (ΔEVE) and Net Interest Income (ΔNII), computed based on a set of prescribed interest rate shock scenarios. 1.2 IRRBB arises from banking activities and is encountered by all banks. It arises because interest rates can vary significantly over time, while the business of banking typically involves intermediation activity that produces exposures to both maturity mismatch (eg. long-maturity assets funded by short-maturity liabilities) and rate mismatch (eg. variable rate loans funded by fixed rate deposits). In addition, there are optionalities embedded in many of the common banking products (eg. non-maturity deposits, term deposits, fixed rate loans) that are triggered in accordance with changes in interest rates. Banks must be familiar with all elements of IRRBB, actively identify their IRRBB exposures and take appropriate steps to identify, measure, monitor and control it. 2. Definitions (a) In this Circular, unless the context states otherwise, the terms herein shall bear the meanings assigned to them below: i. Amenable to standardisation – Positions with certain cash flow till maturity / repricing date. ii. Banking Book - All items which are not included under trading book as defined in paragraph 8.2.1 of the circular DOR.CAP.REC.3/21.06.201/2022-23 dated April 1, 2022 on Basel III Capital Regulations, as amended from time to time, shall be considered as part of banking book. iii. Basis risk - Describes the relative impact of changes in interest rates for financial instruments that have similar tenors but are priced using different interest rate indices. iv. Commercial Margins or credit margin - A specific add-on to internal benchmark rate. v. Constant balance sheet - Total balance sheet size maintained by assuming like-for-like replacement of assets and liabilities as they run off. vi. Embedded loss – Loss embedded in the instruments that are not marked to market, which may be reflected over time in the bank's earnings. For example, a long-term fixed rate loan entered into when interest rates were low and refunded more recently with liabilities bearing a higher rate of interest will, over its remaining life, represent a drain on the bank's resources. vii. Gap risk- Risk arising from the term structure of instruments in banking book that arises from differences in the timing of their rate changes. The extent of gap risk depends on whether the changes to the term structure of interest rates occur consistently across the yield curve (parallel risk) or differentially by period (non-parallel risk). viii. Less amenable to standardisation - Positions with optionality that makes the timing of notional repricing of cash flows uncertain by introducing a non-linearity, which suggests that delta-equivalent approximations are imprecise for large interest rate shock scenarios. ix. Non-maturity deposits (NMD) - Deposits which can be withdrawn, with or without penalty, at the discretion of the depositor. x. Not amenable to standardization – Positions not amenable to standardisation include: Non-maturity deposits (NMDs), fixed rate loans subject to prepayment risk and term deposits subject to early redemption risk. xi. Notional Repricing Cash Flow (CF) any repayment of principal (e.g., at contractual maturity); any repricing of principal; repricing is said to occur at the earliest date at which either the bank or its counterparty is entitled to unilaterally change the interest rate, or at which the rate on a floating rate instrument changes automatically in response to a change in an external benchmark; or any interest payment on a tranche of principal that has not yet been repaid or repriced; spread components of interest payments on a tranche of principal that has not yet been repaid and which do not reprice must be slotted at their contractual maturity irrespective of whether the non-amortised principal has been repriced or not. xii. Option risk – Risk arising from options (embedded or explicit) in a bank’s assets, liabilities and/or off-balance sheet items where the bank or its customer can alter the level and timing of their cash flows. Option risk can be further characterized into automatic option risk and behavioural option risk. Embedded or explicit automatic option risk - Risk arising from standalone instruments, such as exchange-traded and over-the-counter option contracts, or explicitly embedded within the contractual terms of an otherwise standard financial instrument (e.g., floating rate mortgage loan with embedded caps and / or floors) and where the holder will almost certainly exercise the option if it is in their financial interest to do so. Embedded behavioural option risk – Risk arising from flexibility embedded implicitly or within the terms of financial contracts, such that changes in interest rates may effect a change in the behaviour of the client (e.g., Rights of a borrower to prepay a loan, with or without penalty, or the right of a depositor to withdraw their balance in search of higher yield). xiii. Repricing Date: The date of each repayment, repricing or interest payment. xiv. Risk- appetite statement - Written articulation of the aggregated level and types of IRRBB exposures that a bank will accept, or avoid, in order to achieve its business objectives. xv. Risk-free rate – The theoretical rate of interest an investor would expect from a risk-free investment for a given maturity. xvi. Run-off balance sheet - Existing assets and liabilities are not replaced as they mature, except to the extent necessary to fund the remaining balance sheet. (b) All other expressions unless defined herein shall have the same meaning as have been assigned to them under the Banking Regulation Act, 1949 or the Reserve Bank of India Act, 1934 and rules/regulations made thereunder, or any statutory modification or re-enactment thereto or as used in commercial parlance, as the case may be. 3. Governance and Control 3.1 The Board of the banks has the responsibility for understanding the nature and the level of the bank’s IRRBB exposure. The Board shall approve broad business strategies as well as overall policies with respect to IRRBB. Accordingly, the Board is responsible for ensuring that steps are taken by the bank to identify, measure, monitor and control IRRBB consistent with the approved strategies and policies. Monitoring and management of IRRBB can be delegated by the Board to ALCO, which should regularly monitor the nature and the level of the bank’s IRRBB exposure. The management of banks’ IRRBB should be integrated within its broader risk management framework and aligned with its business planning and budgeting activities. More specifically, the Board/ALCO is responsible for setting: appropriate limits on IRRBB, including the definition of specific procedures and approvals necessary for exceptions, and ensuring compliance with those limits; adequate systems and standards for measuring IRRBB; valuing positions and assessing performance, including procedures for updating interest rate shock and stress scenarios and key underlying assumptions driving the institution’s IRRBB analysis; a comprehensive IRRBB reporting and review process; and effective internal controls and management information systems (MIS). 3.2 Banks should have a clearly defined Board approved risk appetite statement which lays down policies and procedures for limiting and controlling IRRBB. The risk appetite statement should be articulated in terms of the risk to both economic value and earnings. It should lay down Board approved aggregate IRRBB limit given the bank’s business strategies at the consolidated bank level as also at the level of individual entities as appropriate. These limits shall be associated with specific scenarios of changes in interest rates and/or term structures, such as an increase or decrease of a particular size or a change in shape. The interest rate movements used in developing these limits should represent meaningful shock and stress situations, taking into account historical interest rate volatility and the time required by management to mitigate those risk exposures. Depending on the nature of a bank's activities and business model, sub-limits may also be identified for individual business units, portfolios, instrument types or specific instruments. The risk appetite framework should delineate delegated powers, lines of responsibility and accountability over IRRBB management decisions and should clearly define authorised instruments, hedging strategies and risk-taking opportunities. 3.3 Banks must identify the IRRBB inherent in products and activities and ensure that these are subject to adequate procedures and controls. Significant hedging or risk management initiatives must be approved before being implemented. Products and activities that are new to a bank must undergo a careful pre-acquisition review to ensure that the IRRBB characteristics are well understood and subject to a predetermined test phase before being fully rolled out. Prior to introducing a new product, hedging or risk-taking strategy, adequate operational procedures and risk control systems must be in place. Procedures should be clearly laid out to approve major hedging or risk-taking initiatives prior to implementation. A dedicated set of risk limits should be developed to monitor the evolution of hedging strategies that rely on instruments such as derivatives, and to control mark-to-market risks in instruments that are accounted for at market value. The proposals to use new instrument types or new strategies (including hedging) should be assessed to ensure that (a) the resources required to establish sound and effective IRRBB management of the product or activity have been identified, (b) the proposed activities are in line with banks’ overall risk appetite, and (c) the procedures to identify, measure, monitor and control the risks of the proposed product or activity have been established. 3.4 Systems should be in place to ensure that positions which exceed or are likely to exceed limits defined by the Board should receive prompt management attention and be escalated without delay. There should be a clear policy on who will be informed, how the communication will take place and the actions which will be taken in response to such exceptions. 3.5 Banks should have adequate internal controls to ensure the integrity of their IRRBB management process. In addition, banks should have in place regular evaluations and reviews of their internal control system and risk management processes. Banks should have their IRRBB identification, measurement, monitoring and control processes reviewed by an independent auditing function (such as an internal or external auditor) on a regular basis. In such cases, reports written by internal/external auditors or other equivalent external parties should be made available to the concerned SSM team of RBI. All IRRBB policies should be reviewed periodically (at least annually) and revised as needed. 4. IRRBB Measurement 4.1 Banks’ systems for IRRBB should be able to compute the impact on the economic value and earnings in various scenarios, based on: internally selected interest rate shock scenarios addressing the bank’s risk profile, according to its Internal Capital Adequacy Assessment Process (ICAAP); historical and hypothetical interest rate stress scenarios, which tend to be more severe than shock scenarios; the six prescribed interest rate shock scenarios as given in Appendix 1; and any additional interest rate shock scenarios required by the Reserve Bank of India. 4.2 An indicative standardised methodology for computing IRRBB from the perspective of change in EVE is given in Appendix 2. Assumptions required for computation of IRRBB 4.3 Both economic value and earnings-based measures of IRRBB are significantly impacted by the assumptions made for the purposes of risk quantification, namely expectations for the exercise of interest rate options by both the bank and its customers under specific interest rate shock and stress scenarios; treatment of balances and interest flows arising from non-maturity deposits (NMDs); treatment of own equity in economic value measures; and implication of accounting practices for IRRBB. 4.4 Hence, when assessing its IRRBB exposures, banks should inter-alia make judgments and assumptions about how an instrument’s actual maturity or repricing behaviour may vary from the instrument’s contractual terms because of behavioural optionalities. Accordingly, all modelling assumptions should be conceptually sound and reasonable, and consistent with historical experience. Banks must carefully consider how the exercise of the behavioral optionality will vary not only under the interest rate shock and stress scenario but also across other dimensions. For instance, considerations may include: Table 1 Product Dimensions influencing the exercise of the embedded behavioral options Fixed rate loans subject to prepayment risk Loan size, loan-to-value (LTV) ratio, borrower characteristics, contractual interest rates, seasoning, geographical location, original and remaining maturity, and other historical factors. Other macroeconomic variables, such as stock indices, unemployment rates, GDP, inflation and housing price indices should be considered in modelling prepayment behaviour. Fixed rate loan commitments Borrower characteristics, geographical location (including competitive environment and local premium conventions), customer relationship with bank as evidenced by cross-products, remaining maturity of the commitment, seasoning and remaining term of the mortgage Term deposits subject to early redemption risk Deposit size, depositor characteristics, funding channel (e.g. direct or brokered deposit), contractual interest rates, seasonal factors, geographical location and competitive environment, remaining maturity and other historical factors. Other macroeconomic variables such as stock indices, unemployment rates, GDP, inflation and housing price indices should be considered in modelling deposit redemption behavior. NMDs Responsiveness of product rates to changes in market interest rates, current level of interest rates, spread between a bank’s offer rate and market rate, competition from other firms, the bank’s geographical location and demographic and other relevant characteristics of its customer base. 4.5 In addition, banks with positions denominated in different currencies can expose themselves to IRRBB in each of those currencies. Since yield curves vary from currency to currency, banks should assess exposures in each currency. Further, banks should consider the materiality of the impact of behavioural optionalities within floating rate loans. For instance, the behaviour of prepayments arising from embedded caps and floors could impact banks’ EVE.4.6 Banks should be able to test the appropriateness of key behavioural assumptions and should also document all changes to the assumptions of key parameters (e.g. by comparing the EVE measured under their internal systems with the indicative standardized framework given in Appendix 2). Banks should periodically perform sensitivity analyses for key assumptions to monitor their impact on measured IRRBB. Sensitivity analyses should be performed with reference to both economic value and earnings-based measures.4.7 The most significant assumptions underlying the system should be documented and clearly understood by the Board or its Committee. Documentation should also include description on how those assumptions could potentially affect bank’s hedging strategies.4.8 As market conditions, competitive environments and strategies change over time, banks should review significant measurement assumptions at least annually and more frequently during rapidly changing market conditions. For example, if the competitive market has changed such that consumers now have lower transaction costs available to them for refinancing their residential mortgages, prepayments may become more sensitive to smaller reductions in interest rates.5. Stress testing framework5.1 Banks should also develop and implement an effective stress testing framework for IRRBB as part of their broader risk management and governance processes, which should be commensurate with their nature, size and complexity as well as business activities and overall risk profile. It should include clearly defined objectives, scenarios tailored to the bank’s businesses and risks, well documented assumptions and sound methodologies. This framework should be used to assess the potential impact of the scenarios on the bank’s financial condition, enable ongoing and effective review of stress tests and recommend actions based on the stress test results.5.2 The stress testing framework should feed into the decision-making process at the appropriate management level, including strategic decisions (e.g. business and capital planning decisions) of the Board or its Committee. In particular, IRRBB stress testing should be considered in the ICAAP, requiring banks to undertake rigorous, forward-looking stress testing that identifies events of severe changes in market conditions which could adversely impact the bank’s capital or earnings, possibly also through changes in the behavior of its customer base. IRRBB stress tests should play an important role in the communication of risks, both within the bank and externally.5.3 The identification of relevant shock and stress scenarios for IRRBB, the application of sound modelling approaches and the appropriate use of the stress testing results require the collaboration of different experts within a bank (e.g., traders, the treasury department, the finance department, the ALCO, the risk management and risk control departments and/or the bank’s economists). A stress-testing programme for IRRBB should ensure that the opinions of the experts are taken into account.5.4 The banks should determine a range of potential interest rate movement scenarios currency-wise, against which they will measure their IRRBB exposures. When developing interest rate shock and stress scenarios, bank should consider the following: Scenarios should be sufficiently wide-ranging to identify parallel and non-parallel gap risk, basis risk, and option risk. Scenarios should be both severe and plausible, in light of the existing level of interest rates and the interest rate cycle; Special consideration should be given to instruments or markets where concentration exists; Possible interaction of IRRBB with related risks as well as other risks (eg. credit risk, liquidity risk); Banks should assess the effect of adverse changes in the spreads of new assets or liabilities replacing those positions maturing over the horizon of the forecast on their NII; Banks with significant option risk should include scenarios that capture the exercise of such options. For example, banks that have products with sold caps or floors should include scenarios that assess how the risk positions would change should those caps or floors move into the money. Banks should also develop interest rate assumptions to measure their IRRBB exposures given changes in interest rate volatilities; Banks should specify the term structure of interest rates that will be incorporated (including shape, level), historical and implied volatility of interest rates, and the basis relationship between yield curves when building interest rate shock and stress scenarios; Banks should estimate how interest rates that are administered or managed by the management (e.g. prime rates or retail deposit rates, as opposed to those that are purely market driven) might change; Banks should also measure the time they would need to take action to reduce or unwind unfavorable IRRBB exposures, and their capability / willingness to withstand accounting losses in order to reposition their risk profile; and Forward-looking scenarios should incorporate changes in portfolio composition due to factors under the control of the bank (e.g. the bank’s acquisition and production plans) as well as external factors (e.g. changing competitive, legal or tax environments); new products where only limited historical data is available; new market information and new emerging risks that are not necessarily covered by historical stress episodes. 5.5 Further, banks should perform qualitative and quantitative reverse stress tests in order to identify interest rate scenarios that could severely threaten bank’s capital and earnings; and reveal vulnerabilities arising from its hedging strategies and the potential behavioural reactions of its customers.6. Data integrity and model validation6.1 Banks’ risk measurement system should be able to identify and quantify major sources of IRRBB exposure. The mix of banks’ business lines and the risk characteristics of its activities should guide management’s selection of the most appropriate form of measurement system.6.2 The banks should not rely on a single measure of risk. They should use a variety of methodologies to quantify their IRRBB exposures under both the economic value1 and earnings-based measures2, ranging from simple calculations based on static simulations using current holdings to more sophisticated dynamic modelling techniques that reflect potential future business activities.6.3 Management Information System (MIS) in banks should be able to retrieve accurate IRRBB information in a timely manner and should capture interest rate risk data on all of the bank’s material IRRBB exposures. There should be sufficient documentation of the major data sources used in the risk measurement process. Data inputs should be automated as much as possible to reduce administrative errors. Data mapping should be reviewed periodically and tested against an approved model. Banks should monitor the type of data extracts and set appropriate controls.6.4 The validation of IRRBB measurement methods and assessment of corresponding model/measurement risk should be included in a formal policy process and reviewed/approved by the Board / its Committee. The policy should specify the management roles and designate who is responsible for the development, implementation and use of models. In addition, the model oversight responsibilities as well as policies including the development of initial and ongoing validation procedures, evaluation of results, approval, version control, exception, escalation, modification and decommission processes need to be specified and integrated within the governance processes for model risk management. An effective validation framework should include three core elements: evaluation of conceptual/methodological soundness, including developmental evidence; ongoing model monitoring, including process verification and benchmarking; and outcomes analysis, including back-testing of key internal parameters (e.g. stability of deposits, prepayments, early redemptions, pricing of instruments). 6.5 In addressing the expected initial and ongoing validation activities, the policy should establish a hierarchical process for determining model risk soundness based on both quantitative and qualitative dimensions such as size, impact, past performance and familiarity with the modelling technique employed. The ongoing validation process should establish a set of exception trigger events that obligate the model reviewers to notify the Board or its Committee in a timely fashion, in order to determine corrective actions and/or restrictions on model usage. Clear version control authorizations should be designated, where appropriate, to model owners. With the passage of time and due to observations and new information gained over time, an approved model shall be modified or decommissioned. Banks should articulate policies for model transition, including change and version control authorizations and documentation.6.6 Prior to receiving authorization for usage, the process for determining model inputs, assumptions, modelling methodologies and outputs should be reviewed and validated independently of the development of IRRBB models. The review and validation results and any recommendations on model usage should be presented to and approved by the Board or its Committee or ALCO. Upon approval, the model should be subject to ongoing review, process verification and validation at a frequency that is consistent with the level of model risk determined and approved by the Board.6.7 Banks relying on third party vendors for IRRBB measurement models, or sourcing model inputs or assumptions from related modelling processes or sub-models (both in-house and vendor sourced), should include them in the validation process. Banks should document and explain model specification choices as part of the validation process. Banks that purchase IRRBB models should ensure there is adequate documentation of their use of those models, including any specific customization. If vendors provide input for market data, behavioral assumptions or model settings, banks should have a process in place to determine if those inputs are reasonable for its business and the risk characteristics of its activities.6.8 Internal audit should review the model risk management process as part of its annual risk assessment and audit plans. The audit activity should review the integrity and effectiveness of the risk management system and the model risk management process. RBI will look into the systems and procedures of computation of IRRBB of banks. If persistent deficiencies are observed, RBI shall require banks to compute IRRBB based on ΔEVE as given in the Appendix 2 till such time all deficiencies are removed.7. Capital assessment for IRRBB under Pillar 27.1 Banks are responsible for evaluating the level of capital that they should hold, and for ensuring that it is sufficient to cover IRRBB and its related risks. The contribution of IRRBB to the overall internal capital assessment should be based on the banks’ MIS outputs, taking account of key assumptions and risk limits. The overall level of capital should be commensurate with both the banks’ actual measured level of risk (including for IRRBB) and its risk appetite and be duly documented in its ICAAP report under Pillar 2.7.2 Banks should develop their own methodologies for capital allocation, based on their risk appetite. In determining the appropriate level of capital, banks should consider both the amount and the quality of capital needed.7.3 The capital adequacy for IRRBB should be considered in relation to the risks to economic value, given that such risks are embedded in banks’ assets, liabilities and off-balance sheet items. For risks to future earnings, given the possibility that future earnings shall be lower than expected, banks should consider capital buffers.Capital adequacy assessments for IRRBB should factor in: the size and tenor of internal limits on IRRBB exposures, and whether these limits are reached at the point of capital calculation; the effectiveness and expected cost of hedging open positions that are intended to take advantage of internal expectations of the future level of interest rates; the sensitivity of the internal measures of IRRBB to key modelling assumptions; the impact of shock and stress scenarios on positions priced off different interest rate indices (basis risk); the impact on economic value and NII of mismatched positions in different currencies; the impact of embedded losses; the distribution of capital relative to risks across legal entities that form part of a capital consolidated group, in addition to the adequacy of overall capital on a consolidated basis; the drivers of the underlying risk; and the circumstances under which the risk might crystallise. The outcomes of the capital adequacy for IRRBB should be considered in bank’s ICAAP and flow through to assessments of capital associated with business lines.7.4 RBI shall assess the adequacy of capital relative to its IRRBB exposures to determine whether the bank requires more detailed examination and should potentially be subject to additional capital requirements and/or other mitigation actions. This assessment need not be linked to the outlier test set out below.Outlier Test7.5 Banks which generate a decline in EVE (i.e. ∆EVE) of more than 15 per cent of its Tier 1 capital under any one of the six prescribed interest rate shock scenarios mentioned in Appendix-1, shall be identified as ‘outliers’ potentially having undue IRRBB exposure. These banks shall be required by the RBI to take one or more of the following actions as determined during the Supervisory Review and Evaluation Process (SREP):(a) raise additional capital; (b) reduce its IRRBB exposures (e.g., by hedging); (c) set constraints on the internal risk parameters used by a bank; and/or (d) improve its risk management framework.8. Reporting and Disclosures8.1 Reports detailing banks’ IRRBB exposures should be provided to the Board or its appropriate committees, on a timely basis and reviewed regularly. The IRRBB reports should provide aggregate information as well as sufficient reporting detail to enable the Board or its committee to assess the sensitivity of the bank to changes in market conditions. The IRRBB management policies and procedures should be reviewed by the Board or its Committees in light of the reports, to ensure that they remain appropriate and sound. It should be ensured that analysis and risk management activities related to IRRBB are conducted by competent staff with technical knowledge and experience, consistent with the nature and scope of the bank’s activities. Portfolios that may be subject to significant mark-to-market movements should be clearly identified within banks’ MIS and subject to oversight in line with any other portfolios exposed to market risk.8.2 While the types of reports prepared for the Board or its Committee will vary based on the bank’s portfolio composition, the board should be informed at least semi-annually on the following: summaries of the bank’s aggregate IRRBB exposures, and explanatory text that highlights the assets, liabilities, cash flows, and strategies that are driving the level and direction of IRRBB; reports demonstrating the bank’s compliance with policies and limits; key modelling assumptions such as NMD characteristics, prepayments on fixed rate loans and currency aggregation; results of stress tests, including assessment of sensitivity to key assumptions and parameters; summaries of the reviews of IRRBB policies, procedures and adequacy of the measurement systems, including any findings of internal and external auditors and/or other equivalent external parties (such as consultants); and results of the periodic model reviews and audits as well as comparisons of past forecasts or risk estimates with actual results to inform potential modelling shortcomings. 8.3 Banks shall disclose the measured ∆EVE and ∆NII under the prescribed interest rate shock scenarios set out in Appendix 1. Disclosures shall be in the formats given in Appendix 3.8.4 Banks shall be guided by the following while computing the impacts on ∆EVE and ∆NII for the purpose of disclosures:a) For the disclosure of ∆EVE Banks should exclude their own equity from the computation of the exposure level. Banks should include all cash flows from all interest rate-sensitive assets3, liabilities and off-balance sheet items in the banking book in the computation of their exposure. Banks should disclose whether they have excluded or included commercial margins and other spread components in their cash flows. Cash flows should be discounted using either a risk-free rate4 or a risk-free rate including commercial margins and other spread components (only if the bank has included commercial margins and other spread components in its cash flows). Banks should disclose whether they have discounted their cash flows using a risk-free rate or a risk-free rate including commercial margins and other spread components. ∆EVE should be computed with the assumption of a run-off balance sheet, where existing banking book positions amortise and are not replaced by any new business. b) For the disclosure of ∆NII Banks should include expected cash flows (including commercial margins and other spread components) arising from all interest rate-sensitive assets, liabilities and off-balance sheet items in the banking book. ∆NII should be computed assuming a constant balance sheet, where maturing or repricing cash flows are replaced by new cash flows with identical features as regards the amount, repricing period and spread components. ∆NII should be disclosed as the difference in future interest income over a rolling 12-month period. 1 Change in economic value can be measured using a variety of techniques, the most common of which are: (1) PV01: present value of a single basis point change in interest rates based on gap analysis; (2) EVE: economic value of equity; and (3) EVaR: economic value at risk. However, for reporting and disclosure purpose, banks are advised to use EVE as prescribed in Paragraph 8 of this document.2 Earnings-based measures look at the expected change in NII over a shorter time horizon (typically one to three years) resulting from interest rate movements. Earnings measures can be differentiated according to the complexity of their forward calculations of income, from simple run-off models which assume that existing assets and liabilities mature without replacement, to constant balance sheet models which assume that assets and liabilities are replaced like for like, to the most complex dynamic models which reflect the changes in the volumes and types of business that will be undertaken in differing interest rate environments. However, for reporting and disclosure purpose, banks are advised to use constant balance sheet models as prescribed in Paragraph 8 of this document.3 Interest rate-sensitive assets are assets which are not deducted from Common Equity Tier 1 capital and which exclude (i) fixed assets such as real estate or intangible assets as well as (ii) equity exposures in the banking book4 The discounting factors must be representative of a risk-free zero-coupon rate. An example of an acceptable yield curve is Zero Coupon Yield Curve published by the benchmark administrator.

RBI/2022-2023/179 A.P. (DIR Series) Circular No. 23 February 16, 2023 All Category – I Authorised Dealer Banks Madam/Sir Exim Bank’s GOI-supported Line of Credit (LOC) for USD 100 million to the Government of the Republic of Maldives (GO-MDV), for financing new developmental projects and to meet spill over costs from developmental projects in Maldives already included under Lines of credit extended to GO-MDV by Exim Bank Export-Import Bank of India (Exim Bank) has entered into an agreement dated October 02, 2022 with the Government of the Republic of Maldives, for making available to the latter, Government of India supported Line of Credit (LoC) of USD 100 million (USD Hundred Million Only) for financing new developmental projects and to meet spill over costs from developmental projects in Maldives already included under Lines of credit extended to GO-MDV by Exim Bank. The export of eligible goods and services from India for the purpose of financing new developmental projects and to meet spill over costs from developmental projects in Maldives already included under Lines of credit extended to GO-MDV by Exim Bank, as defined under the agreement, would be allowed subject to their eligibility under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this agreement. Out of the total credit by Exim Bank under the agreement, goods, works and services of the value of at least 75 per cent of the contract price shall be supplied by the seller from India, and the remaining 25 per cent of goods and services may be procured by the seller for the purpose of the eligible contract from outside India. 2. The Agreement under the LoC is effective from January 19, 2023. Under the LoC, the terminal utilization period is 48 months from the scheduled completion date of the project. 3. Shipments under the LoC shall be declared in Export Declaration Form/Shipping Bill as per instructions issued by the Reserve Bank from time to time. 4. No agency commission is payable for export under the above LoC. However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners’ Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer (AD) Category- I banks may allow such remittance after realization of full eligible value of export subject to compliance with the extant instructions for payment of agency commission. 5. AD Category – I banks may bring the contents of this circular to the notice of their exporter constituents and advise them to obtain complete details of the LoC from the Exim Bank’s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005 or from their website www.eximbankindia.in 6. The directions contained in this circular have been issued under section 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law. Yours faithfully (Vivek Srivastava) Chief General Manager

RBI/2022-23/178 CO.DPSS.RPPD.No.S1931/04-03-001/2022-23 February 16, 2023 The Chairman / Managing Director / Chief Executive Officer of member banks participating in NEFT and RTGS Systems Madam / Dear Sir, Introduction of Foreign Contribution (Regulation) Act (FCRA) related transaction code in NEFT and RTGS Systems Under the FCRA, 2010 (amended as on September 28, 2020), foreign contributions must be received only in the “FCRA account” of State Bank of India (SBI), New Delhi Main Branch (NDMB). The contributions to the FCRA account are received directly from foreign banks through SWIFT and from Indian intermediary banks through NEFT and RTGS systems. 2. In terms of extant requirements of Ministry of Home Affairs (MHA), Government of India, the donor details such as name, address, country of origin, amount, currency, and purpose of remittance are required to be captured in such transactions and SBI is required to report the same to MHA on daily basis. 3. Keeping in view the above, necessary changes have been introduced in NEFT and RTGS systems, technical details of which are provided in Annex. Member banks are advised to incorporate necessary changes in their core banking / middleware solutions to capture the requisite details while forwarding the foreign donations through NEFT and RTGS systems to SBI. The instructions will be effective from March 15, 2023. 4. These instructions are issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007). Yours faithfully, (P Vasudevan) Chief General Manager Annex Technical Details related to FCRA Transactions in NEFT and RTGS Systems A) FCRA Transaction Code in NEFT and RTGS Systems: Originating banks are required to select the following mandatory fields of NEFT / RTGS systems while remitting foreign donations to the FCRA account at SBI: Field Type Code to be used 6305 (in N06 message) NEFT 41 PmtTpInf/CtgyPurp/Cd (in Pacs.008 message) RTGS FCRA B) Format for providing Donor Details in 7495 and RmtInf fields of NEFT and RTGS Systems: Originating banks are required to pass on donor details in the following formats of ‘Sender to remitter information’ (field no. 7495) of NEFT and ‘RmtInf’ tag of RTGS: System Field / Tag Code to be used Transaction without Legal Entity Identifier (LEI) details Transaction with LEI details NEFT 6305 (in N06 message) 41 Field- 7495 line 1: Donor Address line 2: Donor Address line 3: Name of the Donor line 4: Purpose of the Remittance – Alphanumeric line 5: Country of the Donor – Alphabet line 6: Currency and Amount - Alphanumeric Field- 7495 line 1: SL/20-digit sender LEI/ line 2: BL/20-digit beneficiary LEI/ line 3: Name of the Donor line 4: Purpose of the Remittance- Alphanumeric line 5: Country of the Donor-Alphabet line 6: Currency and Amount- Alphanumeric RTGS PmtTpInf / CtgyPurp / Cd (in Pacs.008 message) FCRA Tag- RmtInf/Ustrd loop 1: Name of the donor loop 2: Donor Address loop 3: Purpose of the Remittance- Alphanumeric loop 4: Country of the Donor, currency, and Amount - Alphanumeric Tag- RmtInf/Ustrd loop 1: /SL/20-digit sender LEI/ loop 2: /BL/20-digit beneficiary LEI/ loop 3: Purpose of the Remittance – Alphanumeric loop 4: Country of the Donor, currency, and Amount - Alphanumeric

RBI/2022-23/177 FIDD.CO.LBS.BC.No.18/02.08.001/2022-23 February 13, 2023 The Chairman / Managing Director & Chief Executive Officer Lead Banks Concerned Madam/ Dear Sir, Formation of new district in the State of Sikkim – Assignment of Lead Bank Responsibility The Government of Sikkim, vide Gazette Notification No.50/LR&DMD/ACQ/GOS dated December 20, 2021, had notified formation of a new district in the state of Sikkim. It has been decided to assign the lead bank responsibility of the new district, Soreng, as under: Sr No Newly Created District Erstwhile District Lead Bank Responsibility assigned to District Working Code allotted to new district 1 Soreng West Sikkim (Gyalshing) State Bank of India 01V 2. Further, the District Working Code of the new district has also been allotted for the purpose of BSR reporting by banks.3. There is no change in the Lead Banks of the erstwhile district and of other districts in the state of Sikkim.Yours faithfully,(Sonali Sen Gupta) Chief General Manager-in-Charge

RBI/2022-23/176 CO.DPSS.POLC.No.S–1907/02.14.006/2022-23 February 10, 2023 All Prepaid Payment Instrument (PPI) Issuers (Banks and Non-banks) and National Payments Corporation of India (NPCI) Madam / Dear Sir, Issuance of PPIs to Foreign Nationals / Non-Resident Indians (NRIs) visiting India As announced in the Statement on Developmental and Regulatory Policies dated February 08, 2023, it has been decided to allow access to Unified Payments Interface (UPI) to foreign nationals and NRIs visiting India. To start with, this facility will be extended to travellers from the G-20 countries at select international airports for their merchant payments (P2M) while they are in the country. Going forward, this will be enabled across all entry points in the country. The Master Directions on Prepaid Payment Instruments (PPIs) dated August 27, 2021 (updated as on November 12, 2021) has been updated by inserting paragraph 10.3 therein. 2. These instructions shall come into effect immediately. 3. This circular is issued under Section 10 (2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007). Yours faithfully, (P Vasudevan) Chief General Manager

RBI/2022-23/175 FMOD.MAOG.No.149/01.01.001/2022-23 February 08, 2023 All Liquidity Adjustment Facility (LAF) participants Madam/Sir, Liquidity Adjustment Facility - Change in rates As announced in the Monetary Policy Statement dated February 08, 2023, it has been decided by the Monetary Policy Committee (MPC) to increase the policy repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 6.25 per cent to 6.50 per cent with immediate effect. 2. Consequently, the standing deposit facility (SDF) rate and marginal standing facility (MSF) rate stand adjusted to 6.25 per cent and 6.75 per cent respectively, with immediate effect. 3. All other terms and conditions of the extant LAF Scheme will remain unchanged. Yours sincerely, (G. Seshsayee) Chief General Manager

RBI/2022-23/174 DOR.RET.REC.101/12.01.001/2022-23 February 08, 2023 Madam/Sir, Change in Bank Rate Please refer to our circular DOR.RET.REC.88/12.01.001/2022-23 dated December 07, 2022 on the captioned subject. 2. As announced in the Monetary Policy Statement 2022-23 dated February 08, 2023, the Bank Rate is revised upwards by 25 basis points from 6.50 per cent to 6.75 per cent with immediate effect. 3. All penal interest rates on shortfall in reserve requirements, which are specifically linked to the Bank Rate, also stand revised as indicated in the Annex. Applicability 4. This circular is applicable to all the banks. Yours faithfully, (Prakash Baliarsingh) Chief General Manager Encl.: As above Annex Penal Interest Rates which are linked to the Bank Rate Item Existing Rate Revised Rate (With immediate effect) Penal interest rates on shortfalls in reserve requirements (depending on duration of shortfalls). Bank Rate plus 3.0 percentage points (9.50 per cent) or Bank Rate plus 5.0 percentage points (11.50 per cent). Bank Rate plus 3.0 percentage points (9.75 per cent) or Bank Rate plus 5.0 percentage points (11.75 per cent).

RBI/2022-23/173 REF.No.MPD.BC.397/07.01.279/2022-23 February 08, 2023 All Primary Dealers, Standing Liquidity Facility for Primary Dealers As announced in the Monetary Policy Statement 2022-23 today, it has been decided by the Monetary Policy Committee (MPC) to increase the policy repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 6.25 per cent to 6.50 per cent with immediate effect. 2. Accordingly, the Standing Liquidity Facility provided to Primary Dealers (PDs) (collateralised liquidity support) from the Reserve Bank would be available at the revised repo rate of 6.50 per cent with immediate effect. Yours faithfully, (Muneesh Kapur) Adviser-in-Charge

Participants from the Government of India and the Reserve Bank of India: Smt. Nirmala Sitharaman – Finance Minister Dr. Bhagwat Kishanrao Karad – Minister of State Shri Pankaj Chaudhary – Minister of State Shri Shaktikanta Das – Governor, Reserve Bank of India Moderator: Shri Yogesh Dayal – Chief General Manager, Reserve Bank of India Yogesh Dayal: Good afternoon, everyone. Welcome to the post-Central Board meeting press conference. Today, we have with us Honorable Finance Minister Smt. Nirmala Sitharaman; Minister of State Dr. Bhagwat Karad; Minister of State, Shri Pankaj Chaudhary; and the Respected Governor, Shri Shaktikanta Das along with our Deputy Governors. I welcome all of you to this press conference. Yogesh Dayal: Madam, with your permission, we will start the press conference. First of all, I will call Ms. Deepshikha Sikarwar from The Economic times. Deepshikha Sikarwar, The Economic Times: My question is to Governor. Sir, in the budget speech, FM has mentioned a para on the financial sector, which includes a pre-consultation and also setting timelines for the regulatory applications. What does this mean for RBI? Shri Shaktikanta Das: Whenever any new policy measures or new regulatory guidelines are taken, or any other announcement is made by the Reserve Bank, the budget suggests that the Reserve Bank, or for that matter measures taken by other financial sector regulators; there has to be some amount of advance consultations with the stakeholders. We already do consult with the stakeholders and if you recall in the last monetary policy statement, we have made an announcement relating to penal interest. There also, we are issuing a draft circular. We are not issuing the final circular because we want the views of the stakeholders, namely the regulated entities, the banks and also any other stakeholder, any player in the financial sector/market, or any member of the public to give suggestions. So, we are already doing it, but there are certain announcements which are of a strategic nature, which have got some arbitrage and other issues involved. So, what the budget speech is that wherever feasible, it should be done and that is something which is partly being done and it will be done going forward. So, it brings in the perspective, after the issuance of a circular, the need for corrections or amendments will get significantly reduced, but we are already consulting on quite a number of cases. There is advance consultation. What we do is that we also circulate a discussion paper, for example, the climate-related steps which we have announced in the last monetary policy statement; we had issued a discussion paper on climate change and its impact on the financial sector in July 2022. Based on the discussion paper and the inputs we have received, we have announced 3 measures and other measures shall follow. Deepshikha Sikarwar, The Economic Times: Sir, on the timeline for the application? Shri Shaktikanta Das: We already have timelines and wherever timelines are not there, they will be prescribed. The main difficulty we face is that wherever there is an application, let us say to start a bank or to start an NBFC or to become a payment system aggregator, we have to do what is called a fit and proper check. A check of fit and proper criteria requires consultation. Suppose that a particular applicant has a particular business interest and he has been in a certain business or he has worked elsewhere. So we need to get inputs from the various regulators and agencies within the country and if he has had an external presence, we have to get inputs from the regulators and agencies in that country. That takes time. We do remind the regulators or the other agencies in foreign countries from whom we need to get the required information to get their input, but that takes time. That is a process which we constantly try to impress upon other countries' regulators. It will be our endeavour to adhere to the timelines. Yogesh Dayal: Thank you, sir. I will move on to Ms. Sapna Das from CNBC-TV18. Sapna Das, CNBC-TV18: Good afternoon, madam. Good afternoon, sir. Two questions. First to the Governor sir. In the MPC for the financial year 2023-24, getting inflation at 5.3%, have you factored in crude at around US$95 per barrel, slightly lower than the US$100 per barrel benchmark that you had kept last year? Is that a safe number to go with given the geopolitical risks or let’s say, Russia again has cut output by around 2 lakh barrels per day for instance? Second, so far there has been a price freeze on your retail prices of fuels, petrol and diesel. So far, whenever the projections have been made, you have done it since that impact and in a case in the coming time, we don’t know when, if the price freeze goes away, then the international projections for the market prices, how do you see that trajectory impacting your inflation? Second question, madam a slightly different question. The Supreme Court has raised concerns on the Hindenburg-Adani matter. The Apex Court has said that the framework may have to be relooked with the Ministry of Finance and SEBI as a regulator. There could be some corporate governance issues that need to be addressed. How do you look at this scenario and what is your assessment? You have also made some comments earlier. Shri Shaktikanta Das: There is a request that do not make it into an RBI Post-Monetary Policy Press Conference. On the oil assumption, we have assumed US$95 per barrel. The average for this year has been US$93 per barrel, starting from the beginning of the year when immediately after the beginning of the war in Europe, the oil prices had even crossed US$120 per barrel. All factors have been taken into consideration. The forward markets are giving a much more benign picture with regard to oil prices. But, we have been very conservative in our assessment and with our inflation projection of 5.3% for the whole year 2023-24, we have said that the risks are evenly balanced. If the oil prices go down significantly and if there is an advantage of other commodity prices, it will work in our favour in terms of leading to lower inflation. But, if the demand for oil goes up due to the opening up of the countries and due to higher growth in other countries, then the commodity prices may go up. Further, I would like to add that as I have mentioned in my statement the global economic outlook does not look as grim as it did about 6 months ago. The talk of a deep recession in many countries including advanced countries is behind us. Now the talk around the world is either a softer recession or just a global slowdown. So, the risks are evenly balanced, we have to wait and see how it plays out. Smt. Nirmala Sitharaman: Sapna, I would like to ask you to repeat your question. Sapna Das, CNBC-TV18: The Apex Court’s observation on the Hindenburg report on Adani Group. They were saying that along with the Government, please come up with a possibly better framework for investors’ protection. On corporate governance issues, they have also suggested that an expert committee may be set up to look into this entire matter. Madam, your assessment? Smt. Nirmala Sitharaman: Obviously, you are not expecting me to say to you or to this gathering of senior journalists what I will be saying in the court, that is number one; and the second, India’s regulators, and I am sitting in the company of a very senior regulator, one of the oldest regulator in this country. India’s regulators are very, very experienced and they are experts in their domain. So, the regulators are fairly seized of this matter and they are on their toes as always, not just now. So, I will leave it there because you have just told me what has come out this morning. I will leave it there. Yogesh Dayal: Thank you, madam. I will move on to Mr. Siddhartha Singh from Bloomberg. Siddhartha Singh, Bloomberg: Madam, good morning. You brought a new scheme for income tax exemption up to ₹7 lakh. I was wondering Madam, don’t you think that class of people are the most vulnerable class who would need to be pushed to save, be savers and look for a health insurance instead of just giving them that kind of tax rate and allowing them to retain that money? Smt. Nirmala Sitharaman: The new step taken for the new tax regime, which was brought in two years ago, has been done effectively. Effectively, because of the way we have allowed for the standard deduction and also the tax rates which are being fixed for different slabs. What exactly has it done? It has left more money in the hands of the taxpayer, the householder. Over and above what he pays as tax, the money left in his hands is for him to decide what he wants to do with it. Why should I underestimate the decision-making ability of a householder, who takes care of his family, runs his family, and takes care of the future interests of the household? Saying you put your money here, I will incentivise you to do it, but you may not want to put it there because I have not given incentives. I do not think it is necessary for the Government to even induce any such measures or give inducements. A person, who earns his money and who runs his household is wise enough to know where he has to put his money, he will save, he will cover with insurance for himself and his family and everything else. That is up to him to make it. I have neither discouraged him from doing anything nor in the new regime incentivising him to do anything in particular. It is for him to take a call. Yogesh Dayal: Thank you, Madam. I will move on to Mr. Siddhartha Kumar from The Times of India. Siddhartha Kumar, The Times of India: Madam, there is a new credit information mechanism that you have proposed and since both of you, RBI and Government, are here, if you could just help us understand if it is just for corporates or if is it also going to extend to individuals in the future? Shri Shaktikanta Das: The bill is under preparation and it is under discussion between the regulators and the Government. A lot of discussions have happened, which led to the announcement in the budget. The draft bill is getting ready and it should be finalised soon. The idea is to quicken the process of credit sanction and credit flow to the borrowers. A bank requires a lot of information before a loan is sanctioned. The objective of the credit information mechanism is to create one registry where to the extent possible considering issues of privacy among other things, to provide a 360-degree kind of information system, which will be readily available to the lending institutions to ensure that it quickens the process of the credit flow. That is a broad objective. The other details of the bill will not be proper for me to spell out because it is under discussion, but the bill will get finalised and it has to be first introduced in the parliament. Yogesh Dayal: I will move on to Mr. Shishir Sinha from The Hindu Business Line. Shishir Sinha, The Hindu Business Line: Good morning, madam. Good morning, sir. My question is to Governor. Since we have seen successive rate hikes and that is also impacting home buyers because their EMIs have gone up and it is also affecting demand in the real estate sector. So, what is your assessment on this demand? Shri Shaktikanta Das: Assessment on? Shishir Sinha, The Hindu Business Line: The EMIs have gone up and also the demand for new homes is coming down. So, what is your assessment of the successive rate hikes.? Shri Shaktikanta Das: Please keep in mind that the interest rates have just moved into positive territory. We had negative interest rates for the last 3 years. The continuation of negative interest rates for far too long can create instability in the financial system and it has a lot of risks which have to be avoided. Secondly, when interest rates are rising, there is also somebody called the depositor, his interest has to be taken into account. The larger point is that we are mandated under the law to maintain price stability, which is an important component of financial stability. As a part of price stability requirements, the monetary policy committee is taking various decisions and our interest rate increase is a part of that process. The rest of it, the deposit rates and the lending rates, as you are aware, are deregulated and it is left to the banks to decide their rates. Market competition will decide what should be the rate both on the deposit side as well as on the lending side. Yogesh Dayal: Thank you, sir. I will call now Shri Siddharth Upasini of Moneycontrol. Siddharth Upasini, Moneycontrol: This is for both the Governor and Madam. This is regarding the new income tax regime. You said it is not up to the Government to decide whether the taxpayer should spend or save. Assuming they spend more, could that lead to a greater mismatch between savings and investments, which could perhaps widen India’s current account or balance of payments deficit? Smt. Nirmala Sitharaman: On the one hand, there are people, who tell me that I have done this to pep up consumption. On the other, there are some who say that this might hurt saving and therefore investments. This is a simple step towards giving more money, particularly in the hands of the middle class, the income brackets that I have covered, so that they decide how they want to use it. I am not blaming anybody here, just leads to a lot of inference, each according to his inference, a certain opinion gets generated. This measure of the Government was purely to reduce the tax burden on the middle class and to make sure that the promise which was given earlier, a couple of years ago which got delayed because of COVID and other reasons, that we will simplify the direct taxation, not only just simplify it for compliance sake, but also reduce the rate so that tax does not become a burden on the shoulders of particularly the middle class. That’s where it is. Shri Shaktikanta Das: On the balance of payments, I have touched upon it in my monetary policy statement wherein I have said that the BOP situation, particularly the current account deficit, the financing of the current account deficit or the management of the external sector, it is eminently manageable because the service exports are doing extremely well. The remittances have gone up. The growth in remittance is 27% as per the latest data. The merchandise exports, there is a talk that it is moderating, yes, there has been some amount of moderation, but the annual target of US$400 billion seems to be very much getting achieved by the year end. So, the balance of payment situation is eminently manageable. Yogesh Dayal: Madam, with your permission, we may take the last two questions. I will call now Mr. Asit Ranjan Mishra from the Business Standard. Asit Ranjan Mishra, Business Standard: Good afternoon, sir and madam. After the budget, madam, in one of the interviews you had said that the inflation decline is not momentary and the RBI should not be under pressure to continue increasing interest rates. Smt. Nirmala Sitharaman: Did I use these words? Asit Ranjan Mishra, Business Standard: I will read it out, Madam. Smt. Nirmala Sitharaman: Yes, it might benefit me, quote me. Asit Ranjan Mishra, Business Standard: You said that when the question was asked whether the RBI can take a more relaxed view on monetary tightening, you said, “I suppose yes. The fall in inflation does not seem to be just a momentary or 1-month affair. It should sustain itself in the process of coming down and therefore there should not be that much pressure on the central bank to keep the pace of increasing the rates but the MPC will take a call.” Smt. Nirmala Sitharaman: Lots more words in it, right, than what you brought it down in a reductionist fashion! Asit Ranjan Mishra, Business Standard: So, with that background, madam, how did the discussion go in the meeting? Smt. Nirmala Sitharaman: Even without that background, it went very well. Asit Ranjan Mishra, Business Standard: Is there a divergence in the view of the Government and the RBI on the rate cycle trajectory? Smt. Nirmala Sitharaman: I want to ask you, in the last 4-5 years, has there ever been a divergence between the RBI and the Ministry of Finance? Asit Ranjan Mishra, Business Standard: We did not know. It seems that it is happening for the first time. Smt. Nirmala Sitharaman: I am asking you; did you see anything in the last 5 years? Asit Ranjan Mishra, Business Standard: It seems that it is happening for the first time. Smt. Nirmala Sitharaman: The first time it is happening now. Who gave you the information? Asit Ranjan Mishra, Business Standard: I am only asking. Yogesh Dayal: Thank you, Madam. Shailesh Yadav from ANI. Shailesh Yadav, ANI: Madam, in this budget, there has been no mention of cryptocurrency. There were talks going on about regulation in this. So, is there any update on that, like when can the regulations come? Smt. Nirmala Sitharaman: You should just relate it to one thing, nothing was said in the budget this time. Before this, I told you something about it once. I have not said anything different from what I had said before, but you have to relate to one issue with it. In crypto, the share of technology is almost 99%. It is not human interaction but technology is there, therefore, in the G20 discussion, we are talking with all the countries that if there have to be regulations, then one country alone cannot do anything. So, we are talking with all countries about whether we can make some standard operating procedure, where all go on the same path. If we make a regulatory framework, will we be effective? So, these discussions are going on. Since there was nothing new to tell in the budget, so I did not tell. Discussions are on with G20. Yogesh Dayal: Thank you, Madam. Friends, with this, we come to the end of today’s press conference. Thank you, Honorable Finance Minister and Honorable Ministers of State, Dr. Karad, Shri Chaudhury and the Governor. Thank you all for being here. Have a good day. Shri Shaktikanta Das: Thank you.

Participants from RBI: Shri Shaktikanta Das – Governor, Reserve Bank of India Shri M. K. Jain – Deputy Governor, Reserve Bank of India Dr. Michael D. Patra – Deputy Governor, Reserve Bank of India Shri M. Rajeshwar Rao – Deputy Governor, Reserve Bank of India Shri T. Rabi Sankar – Deputy Governor, Reserve Bank of India Dr. O. P. Mall – Executive Director, Reserve Bank of India Dr. Rajiv Ranjan – Executive Director, Reserve Bank of India Moderator: Shri Yogesh Dayal – Chief General Manager, Reserve Bank of India Shaktikanta Das:Good morning. You have already heard my statement. So, I would request our media head, Yogesh Dayal, to take over. Yogesh Dayal: Welcome everyone to this post-policy press conference. This is the last for the year and we will be today interacting with media friends who all have come from media agencies and representing media houses. So first of all, I will welcome the Governor and Deputy Governors, Shri. M. K. Jain; Dr. Michael D. Patra; Shri. M. Rajeshwar Rao; Shri. T. Rabi Sankar; Executive Directors, Dr. O. P. Mall and Dr. Rajiv Ranjan along with my colleague from the MPD, Shri Muneesh Kapoor and media friends. Welcome to this press conference. Before we go ahead, sir, I would request you for opening remarks so that we can get started with the press conference. Shaktikanta Das: Thank you. What I have done is that as I have been doing in earlier Monetary Policy Committee press conferences, the detailed statement which I made, I have tried to summarise them. In this context, I would like to highlight seven points, which basically emanate from whatever is there in the statement, just to put things in perspective, I would like to say as follows. Firstly, the Indian economy remains resilient. It has withstood successive global shocks over the last 3 years. Each shock came with unprecedented suddenness and spillovers. Major economies are still reeling under their pressure. However, the Indian economy, amidst all this, remains resilient. Second, inflation has shown signs of moderation. I repeat, inflation has shown signs of moderation and the worst is behind us. But there are concerns around core inflation. We cannot take our eyes off inflation. Third, we are now witnessing conducive conditions of macroeconomic stability as reflected in moderation in inflation, fiscal consolidation, and the expectation that the current account deficit is likely to narrow in the coming quarters. Fourth, the Indian rupee has remained one of the least volatile currencies among its Asian peers in 2022 and continues to be so this year also. Fifth, the real policy rate has moved into positive territory, and the banking system has exited from the Chakravyuh of excess liquidity without causing any disruption. Monetary policy transmission is also picking up. Sixth, on liquidity, the Reserve Bank will remain flexible and responsive to the requirements of the productive sectors of the economy. Seventh and the final point is that we, in the Reserve Bank of India, stand resolute to deal with all future challenges. I will stop here. Thank you. Yogesh Dayal: Thank you, sir, for those opening remarks. I will start the press conference. I will invite Mr. Govardhan Rangan from The Economic Times to ask his question. M. Govardhan Rangan, The Economic Times: Thank you, Yogesh ji. Good morning, Governor. With this policy, probably you have not surprised, you just met the expectations. But in terms of the future outlook, your inflation forecast for next year is 5.3% and 5.6% for Q4 of next year. When there is a consensus among all the central bankers that inflationary pressures are easing and you also mentioned that then what is the reason for forecasting the inflation at 5.6%, which is higher than what the MPR has forecasted in the last edition? What is that, that has made you increase the forecast for next year’s fourth quarter, and what is the message with 2 of the MPC members already saying that we have done enough? So how does one read this in terms of messaging as to what is that in store? Shaktikanta Das: I would request DG Dr. Michael Patra, to take this question. Dr. Michael D. Patra: As you mentioned, the average inflation is lower in 2023-24 than in 2022-23. You specifically mentioned the second half of the year. That is because of the base effects of this year playing out. That is why it is higher. M. Govardhan Rangan, The Economic Times: In terms of the widening differences within the MPC, the external members are saying that, okay, we have done enough and the inflation is easing. So why is still there a kind of an indication that there may still be rate hikes and okay? Shaktikanta Das: Ultimately the MPC decision is the majority decision. With regard to indication, it is not possible to say anything. I have said it earlier also that in the current tightening cycle especially with regard to rates, we have refrained from giving any forward guidance because sometimes it can be and may become counterproductive. So we are not giving any forward guidance. We have said that we will be extremely watchful of the incoming data, as well as the outlook on inflation as well as what is happening in the overall economy. Based on that, we will decide going into the future months. Yogesh Dayal: Thank you, sir. I will invite Mr. Anand Adhikari from Business Today to ask his question. Anand Adhikari, Business Today: Sir, I have done some analysis of these three food items, viz., cereals, eggs and spices. I was looking at the CPI basket and they have been on a consistent rise since May, month-on-month in the case of cereals and spices. In the case of eggs, prices are high, and we have seen at least a 5% rise in the last 2 months. I just want to know what is your assessment of these 3 items in the food basket and if will they remain sticky. Shaktikanta Das: Each component of the headline inflation and beyond that each component of the food inflation, the core inflation and the fuel inflation, each of the components, the momentum that is the month-on-month momentum are very closely examined by the MPC and by our research teams within the RBI. Based on that, we give out certain statements. For example, I have said that the moderation in vegetable prices in the last 2 months, that is in November and December, was more than the price momentum in cereals. I have mentioned a couple of items there. We examine all these components and the future trajectory of each of these components, the month-on-month momentum etc., all are built into our projections. Yogesh Dayal: Thank you, sir. I will invite Mr. Vishwanath Nair from BQ Prime to ask his question. Vishwanath Nair, BQ Prime: Good afternoon, Governor. In your statement, you mentioned that banks have come out of the Chakravyuh of excess liquidity. You also pointing out that the deposit rates are rising between May and December. You mentioned 213 basis points increase on weighted average fresh deposits. Having said that, since the last policy, the gap between credit and deposit growth has reduced but it still remains quite wide. As the prospects for credit growth are rising sharply still, how long can banks continue having this 400, 500 basis point gap between the credit and deposit growth rates? Shaktikanta Das: I think I would request DG Michael Patra to take that question, and DG Jain can supplement thereafter. Dr. Michael D. Patra: As you point out, the difference has narrowed, but there is still a difference. It is really up to the banks to mobilise deposits and make up the gap. They are doing so through certificate of deposits and reducing non-SLR investments but they need to mobilise deposits on their own to meet the gap. M. K. Jain: I will supplement what Dr. Patra has talked about it. There is an increase in the deposit side also. The sources of funding we have analysed and we have seen that the sources of funding are coming from deposits as well as the borrowings. The CD ratio as of now for the banking sector has increased a little bit, but still reasonable within the range. The liquidity coverage ratio is still at a very comfortable level, much higher than the regulatory prescription of 100%. Yogesh Dayal: Thank you, sirs. I will invite Ms. Latha Venkatesh from CNBC-TV18 to ask a question. Latha Venkatesh, CNBC-TV18: Thank you, Yogesh. Well, Governor, 2, 3 questions, please. Shaktikanta Das: It will be good if you can ask one. Latha Venkatesh, CNBC-TV18: The real policy rate you said that now 5.6% inflation and 6.5% repo rate, but the 1-year T bill is trading at 6.95%. So effectively, if you take 5.6% inflation, the real rate is already about 140 basis points, 130 basis points. Will you be guided only by the pre-COVID, which was I think 230 basis points difference real positive rate? So, what will guide your decision to pause? Or will it be also the actions of other central banks? And if I may, sir, what is the total exposure of the banking and the NBFCs to the Adani Group because we just heard that REC has ₹7,000 crore. So, is there a number that you will have already assessed? If you can tell us whether you would be cautious that the number should not increase. Shaktikanta Das: The first part of the question relating to the real rates and all, Dr. Patra can take, and then I will take over the next part of the question. Dr. Michael D. Patra: As you pointed out, we have nudged the real policy rate into positive territory. What its level will be, will be decided by the evolving macroeconomic configuration. So, it is not necessarily guided by pre-pandemic levels or anything, but by the evolving growth and inflation trajectory. Latha Venkatesh, CNBC-TV18: But 130 is a big, real rate. Dr. Michael D. Patra: No. Actually, we are talking about the real policy rate, right? So you take the policy rate and adjust it for inflation 4 quarters ahead, as we have always done, and you get less than 1%, (0.9 per cent). About foreign banks and all that, we take into account all developments in the world, but monetary policy has an exclusive domestic orientation, it will react to domestic developments. Shaktikanta Das: Now with regard to the other part of the question about the exposure of the banking sector to one particular business conglomerate. We have issued a press release on last Friday. I have nothing more to add to that. Individual cases and their numbers, as you are aware, we do not discuss in the public domain. Having said that, let me mention in addition because so many questions are being raised in the public domain. In the last 3 to 4 years, the Reserve Bank has taken a number of steps to strengthen the resilience of Indian banks. We have come out with clear guidelines to regulate the governance in Indian banks. We have issued guidelines about the functioning of the audit committees. We have issued guidelines for the functioning of the risk management committees. We have now made it mandatory for appointment of Chief Risk Officer in banks. We have also made it mandatory for appointment of Chief Compliance Officers of the banks and we have given through our regulations, the desired level of autonomy to the Chief Risk Officer and the Chief Compliance Officer with regard to his functioning within the bank. The Chief Risk Officer, for example, reports directly to the Audit Committee. And there are so many other regulations which I am not going into. We have also rationalised in the last 2 years, the large exposure norms and all that. I would like to add at this point of time that the Indian banking sector, including the NBFC sector since you referred to a couple of them, continues to be resilient and strong. Yogesh Dayal: Thank you, sir. I will move on to Mr. Anup Roy from the Bloomberg. I request him to ask his question. Anup Roy, The Bloomberg: Sir, a couple of countries in the Southeast Asia region are now warning about inflation and the resurgence of inflation. And you are also seeing the core inflation to be sticky. Do you fear a resurgence of inflation back, sir? Shaktikanta Das: No, we have given our roadmap, and we have given our projections for 2023-24. We have factored in and we have also highlighted all the upsides and the downsides. Beyond that, it is not possible for me to say anything else. As regards the level of inflation in other countries, that does not impact our decision-making. Our decision-making will be governed by domestic factors. One more point that has to be kept in mind is that the gap between the inflation target in several countries and where their current inflation is, the gap is much wider compared to our target and where our inflation is. Anup Roy, The Bloomberg: Today, you have hiked by 25 basis points and a lot of analysts were thinking that maybe you will give a clear tone that we are going to pause, but you are in no mood. So, inflation is very much there in your mind. So, will you ever give an indication that we will pause here? Shaktikanta Das: Currently, our mood is the mood of optimism. Yogesh Dayal: Thank you, sir. I will move on to Ms. Anshika Kayastha from The Hindu Business Line. Anshika Kayastha, The Hindu Business Line: Sir, you mentioned that you will be issuing directions on penal charges for financial institutions. Just wanted to understand what prompted this and what has the RBI observed so far? And second, just a quick question, what is the sort of preparedness level? I know you have started getting feedback on the ECL draft framework. What has been the feedback and comments so far and by when could we expect the final guidelines? What is the general preparedness level of banks as of now according to you? Shaktikanta Das: I would request DG Rajeshwar Rao to take both the questions. M. Rajeshwar Rao: Regarding the first issue of penal charges, the supervisory reviews, which have been conducted by RBI, have revealed that most banks use a penal rate on top of the nominal interest rate in case of payment defaults and non-compliance with the terms and conditions sanctioning the credit facilities. The reviews indicated there are diverging practices and there were excessive charges in some cases and they were leading to grievances and disputes. We are trying to frame guidelines which will ensure that there is a transparent and uniform approach to this issue. That is the background under which we are proposing to issue guidelines on the penal charges. Now, as far as the ECL norms are concerned, it is generally assumed that the ECL norms may be higher than what is there under the current approach, but that may not be necessarily the case in all situations. That is first point. Secondly, if you look at the position of the banks, the current position is that in terms of the financials, the banks are well prepared to absorb it. In fact, the PCR ratios have improved to about 71.5% in September 22 as compared to 68.1% last year. And the discussion paper has been placed in public domain, we are expecting the comments to come in by February end and maybe shortly thereafter, we will propose to issue the final guidelines taking into account the feedback being received from the public. Yogesh Dayal: Thank you, sir. I will move on to Mr. Ajay Ramanathan from The Financial Express. Ajay Ramanathan, The Financial Express: Good afternoon, Governor. This is regarding the national financial information registry. It was announced in the budget and we believe that the draft is ready. I just want to know how this will differ from the credit information bureaus that we already have? Shaktikanta Das: DG Rajeshwar Rao can take that question. M. Rajeshwar Rao: There have been consultations between RBI and the Government on this NFIR Bill 2023. Further course of action will depend once the bill is passed. As far as the NFIR’s role is concerned, we expect it will contain ancillary information over and above what is already being held by the credit information companies. Shaktikanta Das: There will be lots of additional information, which will be part of this new registry that we are envisaging and it is under discussion with the Government. A lot of discussions have already happened based on which the Government has announced it in the budget. Yogesh Dayal: Thank you, sirs. I will invite Ms. Chloe Cornish from The Financial Times to ask a question. Chloe Cornish, The Financial Times: International banks were key financiers of the Adani Group. Moody's and other agencies have said that the Indian banking system is not badly exposed to the Adani group unless they start to become major lenders to the group which may become less able to avail financing from international lenders. Fitch actually said there is a tail risk that fallout from the controversy could broaden and influence India's sovereign rating. Will you be giving any guidance to domestic banks about their exposure to the Adani group going forward? Shaktikanta Das: Different agencies make their own assessments. We, in the Reserve Bank, have made our own assessments and whatever I just said a little while ago and whatever we said in the press note based on our assessment; the large exposure guidelines prescribed by the Reserve Bank are fully complied with by all the banks. So far as the Indian banking system is concerned, the strength, the size, and the resilience of the Indian banking system are now much larger and much stronger to be affected by an individual incident or a case like this. The banking system is strong. This whole perception is coming because of the market capitalisation of the shares of the group. When banks lend money to a company or to a group of companies, the banks do not lend on the basis of the market capitalisation of that particular company. The banks lend on the basis of the strength of their company, the fundamentals of their company, or the strength and the fundamentals of their analysis if it is a greenfield project, the anticipated cash flows, and so many other things that go into the appraisal of the banks. The appraisal methods of Indian banks have significantly improved over the years. I would just reiterate again that the banking system is stable and continues to be strong. DG, Jain, would you like to add anything? M. K. Jain: Governor has already explained that our domestic banks’ exposure is against the underlying assets, the operating cash flows and the projects under implementation and not based on the market cap. The exposure as of now is not very significant across all the banks and the NBFCs as well. The exposure against shares of the domestic banks is insignificant. Yogesh Dayal: Thank you, sirs. I will move on to Mr. Ben Jose from the Press Trust of India. Ben Jose, Press Trust of India: Is 6.4% an achievable target given the external risk? Last time you lowered the target many times. Are you in a comfortable position to repeat the same? Even with the nominal GDP growth, the budget has been pegged at 10%, down from 15.5% this year. Shaktikanta Das: Last year, we had initially given 7.8%. Then, of course, the war started in Europe and so many other developments took place. I will leave it to Dr. Patra to take that question. Latha Venkatesh, CNBC-TV18: Sir, if I may just add, that first quarter, we are up from 7.1% to 7.81%. Dr. Michael D. Patra: We recognise that the global situation may result in net exports becoming a drag on growth and therefore if you see 2023-24 relative to 2022-23, there is a deceleration from 7.0% to 6.4%; that factor in a drag from net exports. As of now, given current projections of world trade, world output by international agencies, which are factored in here, it is achievable. These are year-on-year forecasts. So, they have momentum and a base effect. Some of it is coming from the base, that is 2022-23. Yogesh Dayal: Thank you, sir. I will invite Gopika Gopakumar from Mint to ask a question. Gopika Gopakumar, Mint: This is with respect to liquidity. You have said that the liquidity remains surplus, although it is lower compared to last year, and you are looking at different liquidity operations on both sides of the LAF. Where would you want to see the liquidity? Is there some level, you are looking at before it starts normalising? Shaktikanta Das: In the beginning of this financial year (in April 2022), the liquidity was about ₹7.87 lakh crore to ₹8 lakh crore. Now, the average daily LAF is ₹1.6 lakh crore. During this period, on a couple of occasions, we undertook variable rate repo operations for very short periods when there was a little bit of stress in the liquidity situation. Our effort and as my colleague, Deputy Governor, M. K. Jain pointed out, the LCR, the liquidity coverage ratio of the banks is more than our LCR norms. They have that much of liquidity to support their lending. The CD ratios are also at reasonable levels, so there is a lot of capacity with the banks to continue with their lending operations. What is your next question? Gopika Gopakumar, Mint: What kind of levels do you see because we have the TLT redemptions? Shaktikanta Das: It is difficult to pinpoint and give out a number, it will depend on the evolving situation and the credit offtake, the needs of the economy, we will be responsive to the needs of the productive sectors of the economy so far as liquidity is concerned. Under that broad principle, we will act. It is difficult to give an exact number because there are several moving parts. Yogesh Dayal: Thank you, sir. I will move on to Mr. Manojit Saha from the Business Standard. Manojit Saha, Business Standard: Thank you, sir. Monetary policy acts with a lag, we all know. 250 basis point hike in a matter of 6 months, 8 months, is a large hike. And some of the external members have suggested, we can step back and see how the previous hikes span out. What is holding you against that? Is it core inflation that you are not bothered about and that is why you are not indicating any future guidance on a pause or something? Shaktikanta Das: I have said in my statement, and the MPC resolution also says so, that at this point of time taking into account where the mix of factors and the data that we have ahead of us, a 25 basis points hike is considered as appropriate. But data is always backward looking. We have also looked at the outlook, which is more forward looking. So at the current juncture, the MPC felt that a 25 basis point hike is warranted very much. I have also said that since we have moderated the pace of hike, 50, then we did last time 35, now we have done 25. This gives us an elbow room to assess the impact of the actions undertaken so far. It is a constant exercise which is going on and we will continue to assess that and take an appropriate call as we go into the future. I can reply only on the basis of the MPC’s decision, which is based on a majority decision. So far as individual members who have given a different point of view, you have to wait for the minutes, the respective minutes of each of the members to come to draw your conclusions. Manojit Saha, Business Standard: Do you think that the bank should be proactive and prudent to increase standard asset provisioning to that particular group because they are in a position to do that? Generally, the RBI’s stance is that when the going is good, you should increase your provisioning. Shaktikanta Das: We have given our regulatory guidelines. The first question, when you say that banks should be more prudent, presupposes that the banks are not prudent. Let me make it very clear that Indian banks are very prudent. During the COVID time, most of the banks, both public and private sector banks, built up their capital. It was a suggestion made by us and the banks utilised the opportunity of liquidity surplus in the market. Most of the banks have built up additional capital. They are all well capitalised. They are prudent. The banks’ management will take their own decisions wherever they feel there is a need for additional provisions to be made. Why do you see it only in the context of this case? There are so many cases, where the bank assesses the situation. I am not talking about the case you are referring to. There are so many other cases where the banks proactively make advance provisions. It is a part of the regular risk management on the part of the bank. Let us look at things objectively. Yogesh Dayal: Thank you, sirs. I will move on to Ms. Swati Bhat Shetye from Reuters. Swati Bhat Shetye, Reuters: Governor, you are remaining focused on withdrawal of accommodation going ahead and you said the liquidity surplus has come down significantly, it is just at about ₹1.6 trillion, with the Government has announced a record market borrowing for next year. Do you think you are going to be able to manage it effectively and would you require open market operations or purchases going ahead to manage the borrowing? Are you open to that? Shaktikanta Das: I will request DG Rabi Sankar will take that question. T. Rabi Sankar: The market borrowing last year was considered high and it was managed smoothly. It will be managed smoothly this year also. We are jumping the gun talking about two OMOs and all at this point of time. There is adequate demand, markets are deep enough so we should not have any problem irrespective of the liquidity conditions. Shaktikanta Das: If you look at the net borrowing number, it was about ₹11.08 lakh crore last year, this year it is ₹11.80 lakh crore on an expanded nominal GDP base. T. Rabi Sankar: Both the net borrowing is slightly about 7% high, gross borrowing is about 8% higher compared to last year. If you look at the increase last year vis-a-vis the previous year they are moderate. So, we are fairly confident that there would not be any problem in mobilising government borrowings this year. Latha Venkatesh, CNBC TV18: But sir you all have announced a measure that you are proposing to allow lending and borrowing of G-secs, is that a new thing? Now lending and borrowing those who are in the CSGL can do, other parties also can do, is that the new step? T. Rabi Sankar: Lending and borrowing of securities can be done in many ways. One of the simple ways of doing it is through repo markets, which happens even today, but some particular entities are not permitted to borrow money, like insurance companies and all that, and they have a lot of stock of securities. So, allowing lending and borrowing directly against securities and not through the repo market will enable them to lend. All these will add liquidity into the market, will add efficiency into the market, and will improve price discovery in the market. Swati Bhat Shetye, Reuters: Sir, just one clarification, from when will the market timings move back to 9.00 am to 5.00 pm? Shaktikanta Das: The notification will be issued today itself, you will know. Yogesh Dayal: Thank you, sir. I will move on to Mr. Mayur Shetty from The Times of India. Mayur Shetty, The Times of India: Governor, is to allow lending and borrowing of government securities aimed at enabling short selling? On the government borrowing programme, are you hoping to widen and deepen the market considering that most of the banks, we speak to, are saying that they will liquidate SLR to beat the gap between deposits and lending? Dr. Michael D. Patra: DG Rabi Sankar answered that question; the idea is to add depth and liquidity to the market to allow efficient price discovery and that is the enabling conditions which will allow all the programmes to go through smoothly that is the idea. Mayur Shetty, The Times of India: And short selling? Dr. Michael D. Patra: Short selling is part of the market. We have allowed short selling a long time ago, so it is part of the market, but what we are trying to do is to encourage depth in liquidity and price discovery in the market. Yogesh Dayal: Thank you, sir. I will move on to Mr. Pankaj Aher from the Informist Media to ask his question. Pankaj Aher, Informist Media: Why is core inflation so sticky, is the RBI thinking of any specific measures to bring this under control including perhaps advising the Government of India on this and does one understand that as long as the core is sticky, RBI will continue with the tighter monetary policy? Dr. Michael D. Patra: Yes, the core is sticky and typically core inflation is associated with excess demand which is why monetary policy acts to bring down the core. That is why we have been raising rates so far. We expect our rate actions, as they pass through into the economy, to modulate demand and modulate core. If you see our projections embedded in the headline is a core trajectory which is going to be slightly lower than what it was in 2022-23. It will be sticky, but slightly lower. Pankaj Aher, Informist Media: So, one does expect that the tighter monetary policy will continue for a longer time? Dr. Michael D. Patra: No, you cannot expect that because you are seeing the headline moderating to 5.3%, so, obviously core is also moderating not at the pace which we would like, but it is certainly moderated. Pankaj Aher, Informist Media: With the projection of 5.6% for next year's fourth quarter, does that not give the comfort that you are seeming to continue to communicate? Dr. Michael D. Patra: Yes, we are in an extraordinary situation with overlapping shocks as the Governor terms it and, therefore, these effects have not been seen in the past. We will expect the core to reflect those concerns, but the core will moderate if monetary policy remains resolute on its course. Shaktikanta Das: There is also the base effect in the next year’s fourth quarter inflation, which Dr. Patra talked about earlier. Yogesh Dayal: Thank you, sirs. I will move on to Mr. Ankur Mishra from the ET Now. Ankur Mishra, ET Now: Sir, my question is regarding the stance part you have continued to remain on withdrawal of accommodation. One of the expectations was that you may shift to neutral, but I want to understand how far or near we are from that shifting of stance part and what will be the favourable conditions? Shaktikanta Das: I have answered this but you may put it in your words now. Dr. Michael D. Patra: Please look for a decisive moderation in inflation and a propensity to align with the target. Ankur Mishra, ET Now: Recently the government has taken some stringent steps on lending Apps. Whether it has been done in consultation with the Reserve Bank of India? Further, the RBI had also issued guidelines on digital lending and there were some concurrent issues which were to be discussed with the government, what is the progress over there? M. Rajeshwar Rao: We have not asked to ban any Apps for digital lending. What we have done is we have shared the list of Apps, which are used by the entities regulated by RBI, with the Ministry. The Ministry has requested the Playstore to remove these apps which are not operated by the regulated entities. That is the position as it stands today. Latha Venkatesh, CNBC TV18: So, what is not on the list is green? Shaktikanta Das: These Apps are not RBI-regulated entities. Our regulated entities that have got the Certificate of Registration of RBI are primarily NBFCs. In turn, NBFC uses many Apps. We took the list of Apps from the NBFCs that they are using because there are many illegitimate and illegal Apps which are not appointed by any NBFCs but they promise to lend by sending mobile messages. So, on behalf of the NBFC sector, those who are in the lending business and doing digital lending, whatever Apps they are using, a list of the same was shared with the government, and the government has taken these steps on that basis. Yogesh Dayal: Thank you, sir. I will move on to Mr. Hitesh Vyas from the Indian Express. Hitesh Vyas, The Indian Express: I want to know the progress on the retail digital rupee, what is the volume and value of transactions that had happened in retail CBDC? Shaktikanta Das: I will request DG Rabi Sankar will take that question. T. Rabi Sankar: In retail CBDC, there are more than 50,000 users now, and more than 5,000 merchants who are participating. There are 8 banks that are participating, we are planning to increase it further to another 5 banks. Over time we will increase to all major banks. There are 5 cities in which it is being done now. We are going to add another 9 cities and gradually we will be increasing that. The total number of transactions, a couple of days back, was roughly about 7,70,000. I do not have the exact fixed amount, but these are small value transactions. Having said all this and the risk of being tried let me just reiterate that we want the process to happen gradually and slowly. We are in no hurry to make something happen very quickly. We have our targets in terms of users, in terms of merchants and all that. We will go through it slowly. As I have already told we do not want to do something without actually understanding what the possible impact is and that impact is rightly managed. Yogesh Dayal: Thank you, sir. We will take the last three questions if you permit because there are four, five people who have not yet asked the question, so, I will start with Mr. Brajesh Kumar, Zee Business News. Brajesh Kumar, Zee Business News: Sir, my question is about the overseas borrowing limit of mutual funds, which is US$7 billion. Are you planning from your side to increase this limit or have you received any requests from other regulators or industry participants? The second question is about the penal charges which you are talking about. Will you set the limit from your end or will those entities be free to set that but in a transparent way? Shaktikanta Das: The draft circular on penal charges will come very soon and I do not wish to prejudge that. Let the draft circular come then you will come to know what is there. If you see in the last few years, RBI usually issues principle-based guidelines. We do not give any set numbers, except for the regulatory guidelines like CET1, Tier-1 Capital should be this much, GNPA should be lower than this, etc., Apart from this, we issue principle-based guidelines only, but I will request you to wait for the draft guideline it will come soon. The second question about mutual funds, we have got requests from some of the market players, we have examined them and we have not taken any decision yet, and when any decisions are taken, you will get to know. As of now, there is no such proposal to increase the limit. T. Rabi Sankar: This issue of increasing the overseas borrowing limit of Mutual funds has come earlier also around a year back and at that time it was decided to let it be like that only. The remaining is what the Governor has already said. Yogesh Dayal: Thank you, sir. Maybe the last question to Shri Manish Suvarna from Money Control. Manish Suvarna, Money Control: So, I have two questions, one is on the stance. Governor, as you said in your statement that overall monetary conditions remain accommodative and hence the MPC decided to remain focused on the withdrawal of accommodation. What will come first – the MPC changing its stance of withdrawal of accommodation or the monetary conditions not being accommodative? The second question is about the coin vending machine. What is the rationale behind it? Why has there a need been felt for you to announce this? Shaktikanta Das: The question you asked on monetary policy is a kind of chicken and egg question, so my reply is let the chicken decide. But on a more serious note, we cannot give any forward guidance of this nature. I have said it earlier also. We watch all the incoming trends and we will take appropriate decisions at the appropriate time. Beyond that I will not be able to give any forward guidance. We are quite open about our unwillingness and there is a reason for it. We do not want to create unreasonable or unnecessary expectations in the market. I would request DG Rabi Sankar to reply on the coin vending machine. T. Rabi Sankar: Regarding coins, we have a peculiar situation where the supply is very high. It is taking up a lot of storage space and it is not getting properly distributed. At the same time, there is demand in pockets. So, one way of increasing the absorption of coins into the system is to make coins available in places where there is demand. Now for that purpose, we had earlier placed coin vending machines strategically at marketplaces like vegetable markets and so on, where there was a large demand. The problem then was that the currency that was being fed into these machines was found to be very often fake and all of that became an issue and those could not be checked at that point in time. So, the way out is something that we can plan which is to get rid of feeding in the currency entirely. Since we have UPI available with us and everyone can use a cell phone and there can be a simple QR code, therefore, instead of feeding in currency and getting your change, you just transfer money from your bank account to the concerned bank and withdraw your change. We took some time to develop that machine, we are trying it out in the pilot stage and we will expand that. We expect that this will improve the distribution of coins in the system. Vishwanath Nair, BQ Prime: You had pushed cash withdrawals from ATMs as well apart from maybe the largest bank in India and nobody else has made any major announcement on that front. Since you are focusing on coin withdrawal through UPI, I just want to ask you whether cash withdrawal from UPI is also going to be a reality soon. T. Rabi Sankar: There are other models that we are looking at, but let us not go into those at this time. If we come up with anything we will let everyone know. Yogesh Dayal: With this, we come to the closure of today’s press conference and, of course, questions will continue and we will be interacting and meeting again. So, thank you all, especially our media friends for having made it to the press conference and thank you to the top management, Governor, Deputy Governors, Executive Directors and my colleague for making this press conference a success. Thank you so much.

It is my pleasure to be part of the Annual FIMMDA1-PDAI2 Conference today. I would like to place on record the Reserve Bank’s appreciation of the critical role played by FIMMDA and PDAI in the development of financial markets in India over the years, and more recently, in partnering with the RBI in guiding the markets and the economy through the turbulent times of COVID-19, the war in Ukraine and the turmoil in financial markets. 2. Today, as I speak before keen market players, veterans and experts, I thought this would be an opportune moment to recapture the journey of our financial markets in the last decade or so and reflect on where we are and what we think about the course ahead. An attempt to draw from the past and forge ahead, so to speak. 3. From the global financial crisis to the Eurozone sovereign debt crisis; from the taper tantrum to Brexit; from unprecedented quantitative easing to among the most accelerated monetary tightening in recent memory; from a pandemic which brought humankind to a standstill to a geopolitical crisis which threatens the world order as it exists today - it would not be an exaggeration to say that the world has moved from one storm to another in the years since the global financial crisis. 4. Against this backdrop, the journey of Indian financial markets has been driven by two key objectives – stability and development. Crisis management has been a key component of this journey. Nonetheless, the pursuit of developmental reforms, with the key objective of widening and deepening of financial markets was continued even amidst the worst storms. The Journey so far 5. Let me take a moment to reflect on the journey of Indian financial markets over the past few decades. Right up to the end of the 1980s, the Indian economy was characterised by an administered interest rate regime, fixed exchange rates, a captive government securities market and current and capital account restrictions. Policy measures during the decade of the 1990s set the stage for a transition to market-determined interest and exchange rates, shift to a multiple indicator approach and eventually to flexible inflation targeting in the conduct of monetary policy, convertibility in the current account and gradual liberalisation of the capital account. The policy measures were bolstered by several key legislative changes: the Foreign Exchange Management Act (FEMA), 1999; the Government Securities Act, 2006; the amendments to the RBI Act in 2006 to give explicit regulatory powers to the Reserve Bank over government securities, derivatives, and money market instruments; and the Payment and Settlement Systems Act, 2007. The Clearing Corporation of India Ltd. was set up in 2001 to provide clearing and guaranteed settlement for money, government securities, forex and derivative markets. A Real Time Gross Settlement System (RTGS) and the NDS-OM platform were operationalised. A Trade Repository was put in place for derivatives. Some of these initiatives became important at a global level only after the G20 rolled out its reforms agenda in the 2009 Pittsburgh Summit. 6. After the global financial crisis (2008), the Indian financial markets were nascent but growing. The approach to foreign participation in most market segments was cautious. Derivative markets, the markets for the purpose of hedging risks, were limited in terms of participants and products. Meanwhile, the BIS Triennial survey published in 2013 showed that there was growing interest in the Indian Rupee overseas. The onshore and offshore markets for the Rupee, however, remained segmented, with the spreads between the onshore and offshore forex and interest rates being wide. Headwinds and Tailwinds 7. Coming to more recent times, many of our policies over the last decade have been guided by the learnings from crisis management as well as the developmental objectives our country aspires to achieve. As the world moved through one storm after another, we were compelled to navigate through the spillovers of major global headwinds. 8. Equally compelling in guiding policy were the needs of the economy. As the real sector grew over the last decade, expectations from the financial markets also grew. The needs of the economy reflect these developments. To place this in perspective, let’s look at some figures. Nominal GDP increased four-fold from ₹64 lakh crore for FY 2010 to ₹273 lakh crore for FY 2023.3 External trade also increased over four-fold from ₹29 lakh crore to ₹137 lakh crore during the same period.4 The ratio of trade to GDP5 has risen to 45% in 2021 from 25% in 2000. Foreign Direct Investment (FDI)6 in the country has risen sharply by two and a half times since 2010. The flow of resources to the commercial sector in India almost doubled from ₹12 lakh crore in FY 2012 to ₹22 lakh crore in FY 2022.7 While banks continue to be a dominant source of financing, market borrowings8 of the commercial sector increased from ₹74,000 crore in FY 2012 to ₹3,16,000 crore in FY 2022. As our economy and financial markets grew, the integration with the world economy and global financial markets has also risen. The growing economy and our aspirations to be and remain among the fastest growing economies has expanded our funding needs. All these necessitate larger and deeper financial markets. The policy response to headwinds 9. It is relevant to look at some of our policy responses in recent times, especially to major global headwinds. Each successive episode of turmoil over the last decade and half has posed a specific set of challenges for the economy. Each has warranted a specific response. 10. In 2008, policy actions were aimed at ensuring comfortable system liquidity; augmenting forex reserves and maintaining a crisis management framework to support the economy through the global financial crisis. Conventional tools such as policy interest rates and cash reserve ratio (CRR) were used. Measures to manage forex liquidity included, inter alia, relaxing the interest rate ceiling on foreign currency deposits by non-resident Indians and external commercial borrowings (ECB) for corporates. Unconventional measures included a rupee-dollar swap facility for Indian banks, a refinance window for mutual funds and a special purpose vehicle for supporting nonbanking financial companies. 11. Post the announcement of early taper of quantitative easing by the Federal Reserve in 2013, the need for restoring confidence of market participants and containing the pressure on the Rupee guided the Reserve Bank’s policy responses. Monetary conditions were tightened through unconventional tools. Forex market measures included both direct intervention and administrative measures to manage capital flows. These included import restrictions of non-essential items, opening of a special dollar swap window for PSU oil companies, a concessional swap window for Foreign Currency Non-Resident (FCNR-B) deposits, increased overseas borrowing limits of banks, enhanced foreign investment limits in government debt and restrictions on outward investment flows, Liberalised Remittance Scheme (LRS) entitlements as well as exchange-traded derivatives. 12. The outbreak of the COVID-19 pandemic in March 2020 necessitated swift and focussed policy responses to address the emerging or potential market dislocations. As in the past, policy rates were reduced and systemic liquidity was expanded. But, this time, the policy corridor was asymmetrically widened and the fixed rate reverse repo became the effective anchor for the evolution of short and longer-term interest rates. To improve transmission of policy rates and ensure flow of credit to the affected sectors, unconventional measures were used viz., the Long-Term Repo Operations (LTROs), targeted LTROs and special refinance facilities to All India Financial Institutions. A special liquidity facility for mutual funds aimed at assuaging redemption pressures was also instituted. For the first time, the Reserve Bank pledged its balance sheet to revive the economy through a Government Securities Acquisition Programme (G-SAP) which provided an upfront commitment on the amounts to be purchased. Special open market operations involving simultaneous purchase and sale of securities (Operation Twist) were undertaken for orderly evolution of the yield curve and liquidity management. Forward guidance gained prominence with the emergence of time and state-contingent guidance, with assurances on the Reserve Bank’s commitment to maintain congenial financial conditions. Communication became a significant part of our monetary policy toolkit. 13. The onset of the war in Ukraine again weakened risk sentiment, with commodity prices and inflation rising to multi-decade highs. As major central banks accelerated policy rate hikes and tightened liquidity to tackle inflationary pressures, financial market volatility spiralled, and the Rupee came under considerable pressure. The policy response this time eschewed administrative measures to contain outflows and instead focused on measures to enhance inflows through incentivising non-resident deposits, foreign investments in debt instruments and ECBs. To promote exports and support the increasing global interest in the Rupee, an additional arrangement for invoicing, payment and settlement of exports/ imports in Rupees was put in place. 14. The point I want to emphasise here is that while there were clear common strands in the Reserve Bank’s response to various episodes of turmoil, the response was customised to each episode in terms of policy objectives and choices, and use of toolkits. Every response was a function of the underlying macroeconomic conditions and reflected learnings from earlier crises. In this context, I would like to mention three distinctive features of our policy responses. First, all liquidity management operations by the Reserve Bank, including measures for mutual funds and NBFCs, have always been through banks which are the liquidity conduits for the Reserve Bank even in peace times. Second, the measures entailed no dilution of collateral standards and ensured that the central bank remained cushioned from counterparty risks. Third, most of the measures this time around were time-bound and expired as per their originally defined maturity. Illustratively, the G-SAP was discontinued, relaxations with respect to CRR were allowed to normalise and the liquidity management framework was tweaked in April 2022 to operationalise the standing deposit facility (SDF). This approach has enabled us to get out of a potential liquidity trap, the Chakravyuh. 15. Interestingly and perhaps paradoxically, the measures to reform and develop financial markets have taken place at an unprecedented pace during a decade of unprecedented challenges. The reforms were aimed at deepening onshore financial markets and increasing the efficiency of price discovery. The more recent reforms sought to (i) remove market segmentation by simultaneously easing access of non-residents to domestic markets and permitting residents to access offshore markets; (ii) expand the participation base by encouraging non-resident participation in financial markets and retail participation through the provision of easy access, for example through the Retail Direct and FX Retail platforms; (iii) facilitate more sophisticated users to access markets for their hedging needs and to express their views on market movements; (iv) promote innovation through the introduction of a larger suite of products which can be customised to the needs of individual market participants;9 and (v) ensure fair user conduct through protection of the retail user and a sound, receptive and a customer suitability framework. A robust infrastructure and conduct framework has been put in place through efficient clearing and settlement arrangements, benchmark reforms, transparency requirements and stipulations on market abuse, among others. 16. India has also come a long way towards achieving higher levels of capital account convertibility. Liberalisation of Foreign Direct Investment (FDI) flows continued over the last decade, with FDI becoming unrestricted except in certain sensitive / strategic sectors. Limits for non-resident investments in domestic market markets were liberalised. The Voluntary Retention Route (VRR) was introduced to facilitate non-resident investment in government and corporate bonds. A Fully Accessible Route (FAR) which places no limit on non-resident investment in specified benchmark government securities was introduced as part of further liberalisation of portfolio debt inflows. The ECB framework was comprehensively liberalised and is now subject only to an overall soft limit and a few “end use” restrictions. Regulations for Overseas Direct Investments (ODI) have also been rationalised and liberalised. The LRS is now available for both current and capital account transactions. Where do we stand today? 17. In the aftermath of multiple shocks, the global economy is projected to contract significantly in 2023. The worst for the global economy, both in terms of growth and inflation, seems to be behind us. Lately, with some ebbing of COVID-related restrictions and cooling of inflation in various countries, though still elevated, central banks have started what appears to be a pivot towards lower rate hikes or pauses. At the same time, they continue to emphatically reiterate their resolve to bring inflation down closer to targets. High policy rates for a longer duration appear to be a distinct possibility, going forward. On the growth front, projections are now veering around to a softer recession as against a severe and more widespread recession projected a few months back. 18. In this hostile and uncertain international environment, the Indian economy remains resilient, drawing strength from its macroeconomic fundamentals. Our financial system remains robust and stable. Banks and corporates are healthier than before the crisis. Bank credit is growing in double digits. India is widely seen as a bright spot in an otherwise gloomy world. Our inflation remains elevated, but there has been a welcome softening during November and December 2022. Core inflation, however, remains sticky and elevated. 19. On the external front, de-globalisation and protectionism are gaining ground as witnessed during the recent global supply-chain shock. It is thus necessary to build and strengthen bilateral trade relations to deal with such challenges. India has recently signed bilateral trade agreements with the UAE and Australia and more such agreements are works in progress. The average current account deficit to GDP ratio stands at 3.3 per cent during H1:2022-23. The slowing global demand is weighing on merchandise exports; but our exports of services and remittances remain strong. The net balance under services and remittances remains in a large surplus, partly offsetting the trade deficit. Consequently, the current account deficit is eminently manageable and within the parameters of viability. 20. On the financing side, net FDI flows remain strong and foreign portfolio flows have resumed since July 2022, with intermittent outflows from time to time The size of forex reserves is comfortable and has gone up from USD 524 billion on October 21, 2022 to USD 572 billion as on January 13, 2023. Further, India’s external debt ratios are low by international standards. This has enabled the Reserve Bank to eschew measures to control capital flows and take steps to further internationalise the domestic currency, even during episodes of significant capital outflows. 21. Every global risk-off episode resulted in an appreciating US dollar imposing downward pressures on most other currencies. Comparison of the performance10 of the Rupee across successive crisis episodes tells its own tale. During the global financial crisis, the Rupee witnessed its worst depreciation - between April 1, 2008 and March 3, 2009 - when it lost 23% against the US dollar. Similarly, it depreciated by 22% during the taper tantrum between May 01, 2013 and Aug 28, 2013. However, the extent of Rupee depreciation was lower in each subsequent episode of turbulence. In the initial days of the pandemic, i.e., between February 17, 2020 and April 21, 2020, the Rupee depreciated by only 7%. Even during the period of geopolitical tensions emerging out of Ukraine in 2022, while the Rupee lost 9% against the US dollar between February 24, 2022 and October 19, 2022, it outperformed the currencies of most advanced and many emerging market economies. 22. Importantly, the Rupee’s performance in terms of volatility remained impressive. For example, the 1-month implied volatility of the Rupee touched a high of 25% during the global financial crisis on October 10, 2008 and 20% during the taper tantrum period on August 29, 2013. During the COVID-19 pandemic, however, the implied volatility peaked at 10% on March 24, 2020 and has remained well anchored11 thereafter, despite the uncertainties associated with the war and monetary tightening by major central banks. The Government bond market has also remained resilient, with average bid-ask spreads being the lowest among peer nations. The yield curve has also evolved in an orderly manner without any undue volatility, despite the significantly higher government borrowing. Looking ahead 23. Today, when we look ahead, we still see challenges, but we can prepare for them with optimism and confidence. The Indian financial markets have developed appreciably over the years. Liquidity in the government securities and the overnight money markets have grown. Bid-ask spreads remain narrow, reflecting efficiency in price discovery. In the forex market, overall trading volumes have grown, and a suite of hedging products have emerged. Volumes in the interest rate swap market have grown consistently and new products in these markets are also developing. Onshore and offshore markets are getting increasingly integrated with narrowing of forex and interest rates across the markets. Non-resident participation in markets is growing, albeit gradually. 24. The global economy is still marred by shocks and uncertainty. Financial markets remain volatile and the geopolitical situation continues to be tense. International food, energy and commodity prices have eased but uncertainties do remain. Inflation remains high and broad-based across countries. The IMF has projected contractions in over one-third of the global economy. 25. In India, we have come a long way in the development of financial markets, but this remains work in progress. The Reserve Bank and stakeholders like FIMMDA and PDAI need to work together and focus on certain specific areas. Secondary market liquidity in g-secs is concentrated in a few securities and tenors. The MIBOR-based OIS remains the only major liquid product in the interest rate derivative market. A term money market remains absent, notwithstanding a host of facilitative policy measures. Access of the retail segment to markets, especially derivative markets, needs to improve further. In the forex markets, while corporates benefit from the tight bid-ask spreads, smaller users continue to face pricing disadvantages notwithstanding regulatory requirements for fair and transparent pricing. Likewise, there remains a need for improvement in ensuring liquidity for retail investors in the government securities markets. Conclusion 26. The journey of Indian financial markets through the last decade has been a story of steady progress with stability. We have been steadfast in our commitment and consistent in our approach to keep the ship stable while continuing to move ahead. Going forward, greater challenges will emerge as the footprints of Indian banks increase in the offshore markets, the range of products expand, non-resident participation in domestic markets grows and as capital account convertibility increases. Market participants will have to prepare themselves to manage the changes and the risks associated with globally integrated markets. The achievement of desired outcomes is contingent on financial institutions and market participants taking forward the reform agenda so that we have more vibrant and resilient financial markets. Thank you. 1 Fixed Income Money Market and Derivatives Association of India (FIMMDA) 2 Primary Dealers’ Association of India (PDAI) 3 Source: Ministry of Statistics and Programme Implementation 4 Source: Ministry of Statistics and Programme Implementation, RBI Balance of Payment Statistics 5 Source: World Bank 6 Source: Reserve Bank of India 7 Source: RBI Handbook of Statistics 8 Market borrowing includes public & rights issues by non-financial entities, gross private placements by non-financial entities and net issuance of commercial papers subscribed to by non-banks. 9 The directions on market making in OTC derivatives which came into effect from January 2022 permitted market makers to offer a variety of derivative products to residents to efficiently design strategies to hedge their risks. Subsequently, several new products, e.g., FX barrier option, binary option, targeted range forwards in the forex market and swaptions and total return swaps in the interest rate market have been introduced. 10 Source: Data from Bloomberg has been used to evaluate the performance of Rupee. 11 Daily average 1-month implied volatility of Rupee was 5% between January 1, 2022 and January 20, 2023 and reached a high of 8% on March 7, 2022. Source: Bloomberg

Moderator: Hello, ladies and gentlemen, I don't think I need to introduce the RBI Governor to you. All of you know him, so we can get started straight away. Mr. Das, thank you very much for finding the time today. Has it been the most challenging year of your tenure or would you say the COVID year 2020 was more challenging? Shaktikanta Das: Every challenge in a particular context looks more challenging than the previous one. There were so many situations when I was a part of the government and we dealt with a lot of challenges. When I came to RBI in December 2018, the entire 2019, the primary focus was not just one of the areas where we concentrated from RBI, but the primary focus in the financial sector was on the NBFC segment. Post IL&FS, liquidity had dried up. There was a considerable undermining of market confidence in the NBFC sector. In that context, we had to focus and see that the NBFC sector makes a comeback. We were very intensively focused on the liquidity situation in NBFCs; the bad assets situation in NBFCs. By the end of 2019, we were almost coming to an end of that problem, then, COVID came in 2020, 2021 was the delta wave, and 2022 was the war. So, it has been one challenge after the other. Moderator: Exciting times for you. Of late, there has been a lot of talk of monetary policy failure, the letter that you have written to the government, which none of us has seen. But I want to ask you if you think in hindsight, you could have done anything differently. It is a hypothetical question. Hindsight is always 20:20, but do you think you could have done anything differently or would have done anything differently in the last one year? Shaktikanta Das: Our assessment is that we have been on the right path. People can hold different opinions. I will tell you why. The inflation even during 2020 later part, around October 2020, had gone up. It had touched 6% and there was an expectation in some segments of the market that RBI will probably increase the rate. Some people were also saying that RBI should now turn the focus to inflation and increase the rate. But our assessment showed that by January 2021, the inflation will come down and indeed it came down. In the latter part of 2021, inflation was gradually going up. In the February’s MPC, which was very critical, the inflation projection for 2021-22, our assessment of the average inflation was that it was going to be 4.5%. The forecast of the professional forecasters in the market ranged between 4.6% to about 5.2%. Whatever it is, inflation was going to be around in the worst situation around 5%. We had done our scenario analysis assuming crude at even higher prices at US$95-100 per barrel and we found that the inflation in the worst situation would be around 5%. Now, growth was recovering. We wanted a safe landing of the economy during the year 2021-22. In February, contrary to what somebody may say that RBI probably should have increased around December 2021 or February 2022. The point is that we wanted the economy to have a safe landing, the GDP to be above the pre-pandemic levels and 2021-22 growth was about 1.6% above the pre-pandemic levels of 2019-20. I am giving a long answer but it is necessary. So, the economy was recovering. We wanted a safe landing for the economy in terms of the growth figures, and today looking back, it gives us great satisfaction that during 2021-22, the economy recorded a growth of 8.7% and for the current year 2022-23, our projection in RBI is 6.8%, the National Statistical Office projected 7%. So, the economy has not only landed safely, but the economy has also remained resilient notwithstanding the huge amount of global spillovers, which are emanating because of the effect of the war, geopolitics and the synchronised monetary policy tightening, especially by the US Fed and other advanced economies. Inflation did go up to 7%, after reaching a peak of 7.8% in April 2022. In between, it went up once for 7.4% or so. Now, December figures were released yesterday; it was 5.7%. It has come down from 5.8% to 5.7%. It is mainly due to softening of food inflation, I do concede that point. The law mandates that RBI has to maintain price stability that is to maintain inflation around 4%, keeping in mind the objective of growth. Therefore, looking at this, I think we have kept the objective of growth, which had to be given primacy during the pandemic times and thereafter, we have not lost sight of the need to focus on inflation. When the war started, and the international prices of commodities and food prices went up, prices of edible oil, prices of cereals also went up because of the war in Ukraine. We did not hesitate to take a decision in an off-cycle meeting last year in May. We were criticised for that, but it was necessary because we didn't want to give a big shock in our June’s monetary policy. So, we split it. We did 40 basis points increase in May and we did another 50 basis points increase in June. So, even looking back, I think we have been on the right course and I think the earlier theories and discussion of being behind the curve etc., are over. Moderator: In this long answer, have you just paraphrased your letter to the government? Shaktikanta Das: I have said it earlier. It is an intelligent guess, which I am sure anybody else can make in this room. But broadly, yes. Moderator: You spoke about this inflation-targeting band. Would you go as far as to say that given the way inflation is moving and the kind of volatility in prices, we are seeing globally, that whole notion of that target band needs to be revisited today? Shaktikanta Das: I would not think so at this point in time. The inflation targeting framework did facilitate the maintenance of the average CPI inflation at about 3.9% from 2016 when it started to the pre-pandemic position in February 2020. So, for almost three years, the average inflation was 3.9% or close to 4%. After the pandemic, of course, the situation changed. Now, we have had one after the other major shocks, the COVID, then the war, monetary policy tightening, the current volatility in the financial markets, etc. But it is too early to shift the goalpost. The 4% has a certain meaning and let me add that our target of 4% plus/minus 2% is to declare it as a failure, if you exceed that, then only it's a failure. I think that gives us sufficient flexibility in our monetary policy decision-making. The Monetary Policy Committee (MPC) utilises this flexibility embedded in the inflation targeting framework to tolerate higher inflation of 5%, 5.5% and even more than 5.5% up to 6% because the requirement of the time when we were undergoing mostly the COVID impact during those two years, slightly higher inflation had to be tolerated because the economy required support. We had to infuse a lot of liquidity, we had to also do a substantial reduction in policy rates. The current target of plus/minus 2% gives enough policy flexibility to the monetary policy committee. So, keeping that in mind, I would feel that the 4% target with plus/minus 2% is very robust in the Indian context. I don't think there is any need for any change. Moderator: Okay. You say that you would not have done anything differently looking back. But when you look at the Federal Reserve's actions – I am not asking you to pass judgment on them – but as one central bank observing another central bank, would you say they made a mistake? Shaktikanta Das: It would not be fair on my part to comment on another central bank. Moderator: There are no Americans in the audience. Shaktikanta Das: We have a central bank community also. We meet every two months in Basel under the aegis of the Bank for International Settlements. Last weekend, I was in Basel and we had a very free and frank exchange of views and thoughts and how we look at each other. Moderator: You don't think the Federal Reserve should have pressed the trigger earlier? Shaktikanta Das: I would not like to comment on that. I think he's the best judge, where he is sitting. We can assume so many things from the outside. We can form our own opinion, but ultimately, it depends on the person who is in the chair. He knows so many inside details and so many other angularities and details. He is much better positioned to take a decision. So, whether he was right or he was wrong, it is not proper for me to comment. Moderator: Now, the whole focus has shifted, I mean, earlier, everybody's focus was when the Fed will stop raising rates and when they will pivot and start cutting rates once again; but now everybody is saying it will be higher for longer, maybe rates will remain at this elevated level in the US for a very long time, and that is probably material to us as well because we cannot function immune of what the US Federal Reserve is doing. So, what is your expectation or what may pan out there? Shaktikanta Das: I will talk about the global situation, and let me also qualify by saying that, I am not giving any forward guidance or any indication about what the MPC is going to do in the first week of February. If the current geopolitical crisis continues in the way it is, it could be a situation of high for a long with regard to interest rates the world over, not just in the United States. India is part of the world. I would also like to add that notwithstanding the geopolitical tensions persisting, every country, every system, and human society knows how to adjust to a new situation. So, global supply chains have considerably eased out, compared to the supply chain bottlenecks, which were there. New alignments are being developed, countries are looking at new sources of supply. The United States is looking at a situation where they can develop an alternate source for the semiconductor supply, alternate to China. Countries will find their way of improving the supply situation. In this event, there could be a moderation in the inflation numbers, going forward. It all depends on the depth of the slowdown that countries are going to experience. Six months ago, the expectation around global slowdown and global recession was much grimmer than it is today. Six months ago, everybody thought that there will be a recession in the European Union. I am not ruling out that possibility, but it has improved considerably. The United States also looked as if it will face a recession, but the United States also may avoid a recession and perhaps just have a growth slowdown at best and maybe a mild or a softer recession for a very, very temporary period. There are so many uncertainties. The possibility of high for long is very much there, but these are the uncertainties, which one has to factor in. The bottom line is that, given the uncertainties, one has to be prepared for all eventualities. Moderator: So, if it is high for a long, you have not said it for India, I accept that. I want to ask you if you have raised repo rates five times, how long do you think it takes for the cumulative interest rate hikes that you've done; a) to be translated by the banking system and b) to have the kind of effect that you had in mind while raising those interest rates, how much time does it take in your eyes? Shaktikanta Das: Normally, it takes about a minimum of seven to eight months for the impact to really play out so far as inflation or all of the outcomes of any monetary policy tightening or monetary policy easing. In the easing cycle, because injecting liquidity is much easier, the actual impact plays out faster. In a tightening cycle, pulling out liquidity takes time, therefore, it takes that much more time. So, it takes at least seven to eight months for the impact to be felt. Our researchers in RBI; of course, it does not reflect the views of the RBI; the report on currency and finance, which was done two years ago, concluded that it will take about four quarters for the impact to be felt. Moderator: One full year? Shaktikanta Das: That is their view. They did not say it in that way, they said it in the context of the definition of failure of monetary policy, instead of being three quarters, it should be four quarters. But I would say that it would take at least seven to eight months for the impact to be felt. Moderator: Should I infer that it could remain high for that long for you to have the desired effect? Shaktikanta Das: No, let us say, we take a decision today. The impact of that decision will be felt seven months down the road. Moderator: But, do you think this is the right instrument, Mr. Das? This is an important question because I was just reading an article by Joseph Stiglitz. I am sure you have read the same, where he invokes Maslow’s saying, to a man with a hammer, everything looks like a nail, and he says that central banks across the world are using a sledgehammer approach to tame this variety of inflation, and this is not the right instrument because it will have the opposite effect, it will not bring down this kind of inflation, on the other hand, it will bring down growth. You may disagree with him, but is there a grain of truth to what he's saying? Shaktikanta Das: I would like to add two points. Given the fact that the current inflation, to a great extent, is supply-side driven. Given that being the real situation that is prevailing today, coordinated action between the monetary and fiscal authorities is very important. In the context of India, I am happy to mention that there has been coordinated action between the monetary and fiscal authorities. The government has reduced the taxes on petrol and diesel twice during this period, and the import duties on the import of pulses, edible oil and several other food items have also been reduced. There were some restrictions put on steel exports. There have been measures taken by the government to deal with supply-side issues. On the monetary policy side, we have taken out a lot of liquidity. We are out of the Chakravyuh of liquidity. We have increased the policy rates by 225 basis points. The central bank has to do it for two reasons: one is to sober down the demand side. Let me not say compression of demand, let me just say that rebalancing the demand and supply. If the prices are more, obviously, the demand is in excess of the supply and you have to balance supply and demand. That is the first thing the central bank’s monetary policy action does. The second thing which is very important is that it provides an anchor to inflation expectations. Inflation expectations do play a major role in the future inflation trajectory. If the stakeholders in the economy feel that the central bank is tolerant of higher inflation, what will it mean? It will mean, everybody will start pricing their products, assuming that the inflation will remain at the current level or will go up further and the central bank will do nothing. Inaction on the part of the central bank will fuel further inflation expectations, which in turn will be self-fulfilling, it will give a further push to inflation. The central bank has a primary role in this. Coming to your point that it will lead to a contractionary situation; it will slow down growth. Some amount of growth slowdown can happen, but there is a policy challenge for each central bank depending on their domestic context to keep in mind the requirements of growth. To what extent you can push the envelope in the sense that it should not be detrimental to the growth objectives and detrimental to your employment and your growth situation? I use the word, 'employment,' because in the United States, mostly it is they go by the employment numbers, in countries like India, we go by the GDP numbers. Moderator: How much sobering of demand are you expecting, Mr. Das, because the new credit cycle for the banking system has just begun, do you think it will be thought it, or reined in by this kind of moderation in demand? I was speaking to a banker this morning who made the point that they are still not seeing that kind of enthusiasm on the part of corporates to take up credit in a large way; it is largely still retail. Shaktikanta Das: You are right. The credit growth so far has been largely retail in India in this cycle. But my sense from our interaction with bankers is that they have started receiving proposals for wholesale credit. I do believe that given the importance which is being given by the policy authorities to let us say to renewables and several other sectors, there will be a big demand for credit from the domestic banking sector. A lot of credit was availed by our domestic corporate houses, particularly, during 2020 or 2021 from the overseas markets. They made their funds requirement by going to overseas markets at that time. Now, the focus is turning more towards the domestic segment because the rates overseas have started going up and there is also the uncertainty of how much of an increase in the US and other countries will do. So, there are signs that wholesale credit is picking up. Given the fact that our economy has held up very well and remains resilient, going forward, we should see more wholesale credit demand coming up. The current GDP growth is sustained mostly by consumption and investment demand, but investment demand till now has come from government capital expenditure. The private capital expenditure cycle is showing some signs of improvement and going forward, it should pick up further. Our last survey for Q2 showed that seasonally adjusted capacity utilisation for the manufacturing sector is around 75%. Services exports are doing very well, the domestic services sector is doing very well. So, going forward, we should see some pickup in wholesale credit also. Moderator: You mentioned services, which reminds me that I wanted to ask you a lot of focus on imported inflation in discussions on inflation, but I think people speak less about core services inflation. Do you think that could be a fairly significant part of the problem? Shaktikanta Das: Core inflation is certainly an area of concern. We have highlighted in the last monetary policy statement. If you see the minutes of the resolution of the last monetary policy committee meeting, the focus was on core inflation. In my policy statement, I had given the focus on core inflation. Core inflation still remains sticky at around 6%. The number which came out yesterday, core inflation is about 6.1%, the previous month was about 6%. Although the momentum of core inflation within that seems to have slightly moderated, the point remains that core inflation remains sticky at 6%. That is not a very comfortable number to deal with. So, as I said earlier in my last monetary policy statement, we have to be very resilient and we have to keep the focus on the core part of the inflation because that is becoming sticky and that is something that has to be dealt with. The supply-side measures taken by the government, the easing of supply chain bottlenecks internationally and also within India, all these factors will probably have their impact and the monetary policy action taken, which we started in May. Going forward, they should start working in a more visible or pronounced manner so far as core inflation is concerned. At the moment, we have to continue the focus on core inflation or as I said Arjuna's eye has to be kept on core inflation. Moderator: Back to growth, you spoke about the moderation in demand. Now, if there is a significant sobering of demand in the coming year, plus the cost of capital goes up for companies, could we be saddled at the end of this credit cycle with another set of bad assets like we had in the previous round, NPLs go up again over four, five years? Shaktikanta Das: You see the cost of capital if you have to see it in real terms. Real terms would be taking into account inflation. We cannot just go by the nominal number of interest rate. You have to see it as what is the real interest rate taking into account net of inflation. Now with regard to your point on bad assets. A number of steps have been taken by the RBI over the years. But especially in the last three years post ILFS and post all those bad asset problems, which the banks faced, we have tightened our supervision and the kind of things which we are now looking at in the banks, in the NBFC sector, we didn't do it earlier. We have developed early warning signals. We are looking into the business models of banks. Our information system in terms of the data that we get from the banks has been further improved. So, we get information almost on a near real-time basis. I would say that supervision by the RBI is an ongoing process now, where we keep on monitoring not only the numbers but within each bank, within each NBFC, particularly the bigger ones; we look at where the credit growth is happening. What is the buildup in bad assets, if any? for example, retail credit has picked up over the last one year. We are always mindful of within retail credit. What is the stress level? What is the bad asset level? The bad asset level is 91 days or more. But within that, we have in our system, over dues which are more than 30 days; over dues of more than 60 days. We monitor that. The moment we see that some stress is developing in a particular sector or a particular bank, we immediately sort of become alert and we have internal red flagging systems. We have early warning signals, and we immediately flag them to the banks concerned. Moderator: Is it at a micro level? Is it at a bank level also? Shaktikanta Das: It is at the individual bank level. It is also at the level of individual large NBFCs. So, we immediately flag the issue to the banks concerned. We have also advised the banks to make their risk management committees and their audit committees more functional and more robust. We have issued some guidelines for that, and we just convey them to the banks and request that you examine it, go back, discuss it with your board, take a view of what is happening, and take whatever mitigation measures are required. Please do take it and inform us. There is a great awareness even among the banks. I am happy to point out that banks, today, themselves are much more concerned about the problem of rising bad assets. Overall, the whole banking culture, if I can say, that the prudence, the culture of prudence has developed in the Indian banking sector over the last few years. Moderator: Going by the metrics that you just spoke about, would something like the ICICI Bank/Videocon case have propped up as a red flag alert with the RBI, that too many loans are going to one group not backed by enough kind of assets? Would it have shown up? Shaktikanta Das: I don't want to comment on a specific case. Moderator: But it is a very large case. Shaktikanta Das: It is not proper for me being the regulator to comment on a specific case. I am not commenting on the specific case but in general terms, I would like to say that RBI is monitoring each and every check payment, and loan sanction. It is not our job. Each bank has got a risk management committee. The bank has a credit sanction committee. The bank has a Board of Directors. The bank has senior management, and a qualified professional CEO assisted by a lot of senior management. It is their responsibility to do due diligence. We cannot be looking into the kind of loan appraisal and the due diligence that a bank does in each and every case. That's not our job, and that's not desirable. If RBI or any regulations in any country gets into those areas, it will be highly detrimental to the credit effect. Individual cases of failure could be due to business failure also but, it is not possible for the Reserve Bank to monitor individual cases, we cannot put ourselves into the chair of the credit sanction committee of the bank. So, we monitor the overall numbers. We monitor the sectors. We do not look at individual cases of how the loan was sanctioned, but yes, if there is slippage in a large portfolio that over-dues are building up, we would certainly flag it to that bank to focus on this. Moderator: I was hardly blaming you, sir. You seem to have taken it personally. I was asking whether it would show up in your searches. I was not blaming the RBI for the ICICI Bank/Videocon case at all. Shaktikanta Das: Not that way. I think it needs to be examined. Did I sound as if I was trying to? No, I didn't see it that way, at all. What I am saying is we cannot become the appraisal authority in any bank. To that extent, I just clarified the RBI's role. We look at individual portfolios, and if there is a very large loan, and if it is showing signs of stress, naturally it will be noticed. It is the first line of defence in any financial system and the first line of defence has to be the bank management itself. Moderator: Sure. Let me rephrase the question in a different way on the same subject. There is a report which came out last week authored by Sucheta Dalal where she points out that in the IDBI Bank case, almost all the loans which were made to a group called the Seva Group came from public sector banks. Do you think, or would you agree that public sector banks are more susceptible to such kind of dubious loan practices, which end up in scams, and therefore lead to large NPLs? Or is it an unfair assessment? Shaktikanta Das: I don't want to comment on individual cases, what happened in this case or that case. The improvement in the banking sector over the last few years is both in the public and private sectors. So, it will not be fair to just pick up the public sector and say that this has happened in the public sector. Today, the functioning in prudent management and the improvement in terms of governance are visible both in public and private sector banks. So, it will not be correct to generalise and put all the public sector banks in one bracket. There might have been individual instances in individual banks and it will not be correct to generalise on that basis. Moderator: My colleagues have a few questions. Before that, I want to ask one question about your recent comments on cryptocurrencies. You made a statement that they might be triggering the next financial crisis. It could come from there. Do you think they should be banned? Shaktikanta Das: RBI's position is very clear. It should be banned. Moderator: In all of them, no activity should be allowed in cryptocurrency? Shaktikanta Das: The technology of blockchain needs to be supported because the technology has got so many other applications. Apart from the commonly known dangers of money laundering and terror funding, what are the principal concerns that we have? The first thing is: what is crypto? Some people call it an asset. Some people call it a financial product but you will agree that every asset, every financial product has to have some underlying. In the case of crypto, there is no underlying, and I have said in some press conferences that not even a tulip, alluding to the Dutch tulip mania. The increase in the market price of various kinds of crypto, which start at a particular place, then multiplies over in a matter of few weeks or few months is based on make-believe that this is worth so much or it will go up to such and such level. So, anything without any underlying whose valuation is dependent entirely on make-believe is nothing but 100% speculation, or to put it very bluntly, it is gambling. In our country, we do not allow gambling. If you want to allow gambling, treat it as gambling and lay down the rules for gambling, but that's not a financial product. Therefore, crypto masquerading as a financial product or financial asset is a completely misplaced argument. The bigger and more macro reason for what we are saying is that so-called crypto assets or cryptocurrencies have the potential and characteristics of becoming a means of exchange for doing a transaction, and most of it is dollar-denominated. Assume a situation where 20% of our transactions in the economy, 20% I am mentioning an ad-hoc number, are taking place through cryptos which are not issued by the central bank. It is issued by private companies which are placed all over the world. The Reserve Bank, being the monetary authority of the country as the central bank, will lose control over the money supply in the economy and will lose control over 20% of the transactions in our economy. Reserve Bank's ability to decide monetary policy, to decide on the liquidity of, the level of liquidity that needs to be maintained, the level of money supply M3 that has to be maintained in the economy, to that extent will get undermined. It will lead to a dollarisation of the economy. Believe me, these are not empty alarm signals. This can happen. One year ago in the Reserve Bank, we had said that this whole thing is likely to collapse sooner than later. If you see the developments over the last one-year climaxing in the FTX episode; I think I don't need to add anything more. Moderator: My colleague Sourav Majumdar from Business Today magazine has a question for you, Mr. Das. Sourav Majumdar: Good evening Governor. You spoke about your views on crypto which you just elaborated on is very well known. RBI has just rolled out the CBDC. You know, there is some confusion yet about what the CBDC will do and how it will play out. It will be great if you can just throw some light on what the CBDC exactly will entail. Another little question attached to this is, not strictly related to CBDC, but is about the digital initiatives of banks. They are hugely under pressure in terms of core banking. What are the risks you see as the regulator in terms of banks going increasingly digital? As the regulator, what are you telling them to do because digital is a given? Shaktikanta Das: So far as the digital part is concerned, the basic IT systems of banks will have to be very robust. Data privacy is an issue. There must be adequate safeguards. There are a large number of bankers here. They are in a much better place to reply to this question, but let me say that the focus should be on the issues of data privacy, issues of the robustness of the technology and the IT system itself. Many banks are also actively engaged with many big tech companies. So, the challenge to the banks is that it should not lead to a situation where the big techs come and sort of start dominating the banks. The banks should take their own decisions. The bank should not be swallowed by the big techs, but the bank should utilise the technology and the service provided by the big techs. They can develop various kinds of partnerships or arrangements, etc. Coming to CBDCs, CBDC is a currency system. People compare it with UPI. UPI is a payment system. CBDC is a currency system. It is just like cash and paper currency. You go to a shop, you pay money to the shopkeeper. He gives you whatever you are buying. Your settlement is done. In the case of CBDC also, it is an instant settlement. The money, the currency, digital currency, and the e-rupee will flow from your wallet to the wallet of the merchant without the intermediation of the bank. So, it will become faster apart from issues of saving on logistics and cost of printing, etc. CBDC is the future money. A large number of countries are working on CBDCs. Technology is becoming more and more robust in this area. We cannot be left behind. We have to be there and it is going to be the shape of future money. Settlement is going to be quicker but the technology will have to be very robust and very safe. We have to ensure that it is not cloned or it is not counterfeited. Therefore, the trial which we have launched, we have been very careful about it. There are many experiences and many learnings which are coming and will come out of the wholesale and retail trials which we are doing. So, we are sort of getting ready for the future. Moderator: One question, Mr. Das, I should ask you quickly before I ask my colleagues to join in is about the last quarter's current account deficit and the fact that the rupee was doing quite well against other currencies. But by the end of the year, if you look at it versus many other emerging market currencies, it has not done that well. Should one be worried about the current account deficit (CAD)? And what it could do to the rupee this year? Shaktikanta Das: It is a common way for people to say the day the rupee depreciates or at the end of the year they say that the rupee is the worst performing currency and all. China grew on the back of a weak currency and reached where they are today. So, whether the currency is strong or weak, has to be seen in relative terms. It has to be seen in a proper context. So, I don't enter into that weak or strong and good or bad. I am not entering into that. So, far as RBI is concerned, the exchange rate is market driven. Your question is on the current account deficit. The first quarter number this year is very easy. Incidentally, the numbers are quite easy to remember, because, in the first quarter, the current account deficit was 2.2%. The second quarter became 4.4%, and the average for the first half is 3.3%. So, it is quite easy to remember. But on a more serious note, the CAD for the first half of the year is 3.3%. Having said that, in October and November, the situation is showing a great amount of improvement. The merchandise trade deficit is moderating. Imports have come down benefiting also from the decline in commodity prices. On the other hand, services exports have picked up and they are doing very well at the moment. So, we do expect the CAD of the current year to be eminently manageable so far as RBI is concerned and so far as the financing of the CAD is concerned, remittances are doing very well. The World Bank projects that India will receive US$100 billion of remittances this year, and the growth of the World Bank has been projected at 10 or 12%, but in the first half itself, the growth is almost 20%. So, remittances are doing very well. FDI, net FDI up to the end of October has been about US$22 billion. Net FPI up to the end of December has been about US$11 billion or so. The figures may be little here and there, but broadly, these are the numbers. To sum it up, I would say that the improvement in the CAD is visible. It will be eminently manageable. Financing it also will be fairly comfortable. I should also add that our foreign exchange reserves, which had gone down to US$524 billion, have again come back to US$562 billion. The figure for last Friday is US$561.5 billion or so, but that's mostly because of reevaluation, but taking into account all parameters of measurement of adequacy of reserves is very comfortable. Moderator: You have been RBI Governor for more than four years now. If you look at the previous stints of your predecessors, the one thing, which was common is that almost every six months or so there would be some signs of strain between the RBI and the government, pulls and pressures, and differences in opinion. None of that seems to be visible right now. So, your admirers or supporters would say that is because you have mastered the art of relationship management with the Finance Ministry. It is a compliment, but your critics would say that you are too compliant with the government, and you have sacrificed some of the Central Bank's autonomy. What is the truth between these two? Shaktikanta Das: It is for you to judge. Somebody has to tell specifically where the central bank has compromised its autonomy. Making sweeping statements is not fair. Somebody has to say where we have compromised on our autonomy. Initially, there was this talk of surplus transfer and all that, but the surplus transfer was determined and decided by the recommendations of the Bimal Jalan Committee, which has been accepted by everybody. So, it was the calculation that our accounts department did place before the audit committee – that is a surplus number is coming. I have no discretion to increase the surplus transfer or decrease the surplus transfer. It is audited and the numbers are placed in the public domain. Everybody knows about it. Autonomy basically means autonomy in decision-making. I am not commenting on any other. I will just focus on my tenure. I think in any institution whether it is central bank vis-à-vis the government or it is between, let us say, management of a company with its Board of Directors, in any institution, in any organisation, interface with others requires consultations, requires active engagement. So, without proper engagement, that could be the areas of communication gap. So, we should not allow that situation to develop. In my first press conference, when I took over in December 2018, I had said that my approach would be consultative and I will constantly engage with the government to explain why we have done what we have done. That does not mean that I have compromised our position but the government should know the background of important decisions. When we do, for example, the monetary policy increases, we have been able to do it. Nobody has prevented us. Nobody has stopped us from doing it contrary to what may be the perception outside. We have done what we wanted to do. The Monetary Policy Committee, constituted by the government, took decisions. So, ultimately, at the end of the day, what is important is to maintain good communication and to constantly engage. The engagement and communication between the government and the RBI are very important. Having said that, it's not as if there have not been any differences of opinion on certain individual issues, but all those issues have been internally resolved through discussions. Moderator: One question from my colleague, Siddharth Zarabi. Siddharth Zarabi: Thank you very much. Governor, you spent a lot of time in North Block and now at Mint Street as we call it and you covered a lot of ground in this interaction. My question is very simple. Going forward, is the monetary policy going to be a T20, a one-day or a test match? And I ask this question because many in the audience may perhaps know you have some interest in cricket. So, I used this opportunity to pose that question to you. Shaktikanta Das: I have a great interest in cricket. So, we can hold another session on cricket if you wish but having worked in the North Block, what is also important is that I know the corridors of North Block. I know which corridor takes a right bend where or a left bend where. Now I am familiar with the Reserve Bank. So, I can close my eyes and enter into the Reserve Bank and reach my office. I know where we have to take a turn. So, on a more serious note, I think you cannot classify it as a T20 or a limited over 50. You see Virat Kohli is good in T20. He is good in limited over one-day cricket. He is also good at test cricket. So, the RBI has to function and perform both in a T20 match, in a 50-over match, as well as in test cricket. Our effort and endeavour are always to optimise our performance to the best extent that we can. We put our best foot forward. Moderator: Governor, we are out of time but thank you very much for a great session and thank you very much for accepting our invitation today. A great pleasure talking to you today. Thank you very much. Shaktikanta Das: Thank you very much, and thank you very much for your patient hearing. I think we have overshot the time primarily for my long answers, but I thought it was necessary. Thank you once again for inviting me. Moderator: Thank you so much, Governor.

I am delighted to have been invited by the IMF to join this distinguished gathering here today to discuss pathways to resilient, sustainable and inclusive growth in South Asia. I am happy to note that the conference proceedings will be anchored by the research findings and policy recommendations of the book titled “South Asia’s Path to Resilient Growth”. In the current international setting, global trade and growth outlook appear uninspiring, and policies have to be conducted amid a whirlwind of uncertainty. At such critical times, conferences of this nature can help us better understand the evolving scenarios and policy trade-offs. In my address today, I shall briefly cover some of my thoughts on South Asia’s Current Macroeconomic Challenges and Policy Priorities. 2. Looking back into history, the South Asian region has been a key hub of ideas, commerce, art and culture, etc. The Indus Valley civilisation was among the three earliest civilisations on earth and was the most extensive. In the so called middle ages, trade and commerce flourished in a variety of commodities such as spices, precious metals and other minerals, handicrafts and food items. Overall, the South Asian region has had an outsized influence on the progress of civilisation and trade in the world. Currently, the region accounts for about 25 per cent of world population. With a median age of 27 years, it is one of the youngest regions in the world. The average growth rate of the region has accelerated from 3 per cent in the 1970s to about 7 per cent in the latest decade (pre-pandemic). Consequently, per-capita income levels have risen alongside notable progress on key development parameters. As per the IMF estimates, South Asia contributes nearly 15 per cent to global growth, led by India and Bangladesh. The region also receives one-fifth of total remittance flows in the world. 3. The South Asian region has grown, responding to formidable global challenges in the past. Following the food crisis of the 1960s, the region successfully implemented the Green Revolution. After the oil shocks of the 1970s, emigration from South Asia to West Asia became one of the largest market-driven labour flows. This, in turn, led to a significant increase in remittance flows to the region. The Asian financial crisis of 1997 impacted the South Asian countries in terms of surges in capital outflows and exchange market pressures. Over the years, as a crisis prevention strategy, the South Asian countries prioritised sound macroeconomic policies and embraced financial sector reforms focusing on competition, prudential regulation, enhanced transparency, audit and accounting standards. These measures helped in preserving macro stability while sustaining integration of domestic economies with the global economy. 4. In recent years, multiple shocks, in particular the COVID-19 pandemic and the war in Ukraine, have dampened the economic prospects of the South Asian region, as in other parts of the world. Some countries in the region have also been contending with the ramifications of unsustainable debt and climate change induced events. Consequently, they have been seeking recourse to the IMF’s financing facilities. Notwithstanding these challenges, as per the World Economic Outlook database (October 2022) of the IMF, India, Bangladesh and Maldives would be among the fastest growing economies in the world in 2022 and 2023. According to the Asian Development Bank’s December 2022 outlook, the South Asian region’s GDP is projected to grow at 6.5 per cent in 2022 and 6.3 per cent in 2023. 5. The World Bank estimates that regional co-operation could be a win-win situation for all countries of the region1. For example, intra-regional trade is currently only one-fifth of its potential, implying an annual shortfall of US$44 billion. The World Bank assessment also suggests that a common electricity market for Bangladesh, Bhutan, India and Nepal can yield savings of US$17 billion in capital costs. Investment in transport and logistics could help reduce the cost for container shipments in South Asia. According to a study by the IMF (2019) on South Asia, more than 150 million people will enter the South Asian labour force by 2030. The dependency ratio is expected to continue ebbing for almost two decades, indicating the strong demographic dividend the region is set to reap. Policy Priorities I would now like to focus on some of the desirable policy priorities for the South Asian region. I have identified six such policy priorities. Taming Inflation 6. Multiple external shocks in the form of COVID related global supply chain disruptions, food and energy crisis following the war in Ukraine, and financial market volatility arising from the aggressive monetary policy tightening have exerted sustained price pressures in the South Asian economies, as in other parts of the world. During the first three quarters of 2022, food price inflation in South Asia averaged more than 20 per cent. The region’s heavy dependence on imported fossil fuels has made it vulnerable to imported fuel inflation. For successful disinflation, credible monetary policy actions accompanied by targeted supply side interventions, fiscal, trade policy and administrative measures have become the key instruments. While the recent softening of commodity prices and supply chain bottlenecks should help in lowering inflation going ahead, risks to growth and investment outlook may rise if inflation persists at high level. Prioritising price stability, may therefore be the optimal policy choice in the current context for the region. The approach to disinflation, however, needs to be mindful of the rising risks to the growth outlook in an environment of deteriorating prospects for global growth and trade activity. Containing External Debt Vulnerabilities 7. The surge in external debt in recent years and associated vulnerabilities have undermined macroeconomic stability in several countries of the South Asian region. External debt, which was already elevated in low- and middle-income countries (that include all South Asian economies) in the pre-pandemic period, surged to US$ 9.3 trillion in 2021 from US$ 8.2 trillion in 2019, an increase of US$ 1.1 trillion. 8. The Debt Service Suspension Initiative (DSSI) was set up by the G20 in May 2020. Up to December 2021, an estimated US$ 12.9 billion of debt service was deferred. According to the World Bank, 60 per cent of the 73 DSSI-eligible countries are at high risk of debt distress or are already experiencing it. It is estimated that total external debt service payments on public and publicly guaranteed debt by poorest countries may rise by 35 per cent to over US$ 62 billion in 2022 and to remain high up to 2024 due to rising global interest rates and the compounding of interest on DSSI debt service deferrals. 9. Even though the participation of private creditors was encouraged in the DSSI, their response has not been encouraging. There has been a notable shift in the creditor composition of low- and middle-income countries between 2010 and 2021. The share of lending by private creditors in long-term public and publicly guaranteed debt was 61 per cent in 2021 (46 per cent in 2010) and the share of debt owed to bondholders was 47 per cent in 2021 (29 per cent in 2010). 10. A distinct shift in the creditor base over time in favour of private lenders and non-Paris Club official creditors has added a new dimension to debt restructuring processes for the low-income International Development Assistance (IDA)-eligible debtor countries. The share of debt owed to non-Paris Club creditors rose to 68 per cent in 2021 from 42 per cent in 2010. The increasing reliance on private creditors has raised debt servicing costs and complicated creditor coordination in debt resolution efforts. During 2010-2021, the average maturity on loans from private creditors was 12 years as compared with 26 years for loans from official creditors, and the average interest rate on loans from private creditors was 5 per cent vis-à-vis 2 per cent on loans from official creditors. 11. The role of multilateral organisations, particularly the IMF and the World Bank, becomes crucial in making debt treatment efforts more effective, while also strengthening the mechanism of recording, reporting and analysis of debt data so as to enhance transparency and preserve debt sustainability. The IMF’s role in capacity building in the region, with a focus on region specific macro dynamics, policy effectiveness challenges, and economic aspirations of the nations would also be helpful. Raising Productivity 12. While sustained and broad-based economic recovery remains the current policy focus, it is necessary to undertake deep structural reforms to raise the potential growth trajectories of the economies in the South Asian region. Ongoing global realignment of supply chains, green transition and advances in technology offer new opportunities for investment and growth, but policies would need to create the congenial climate for attracting new private investment, with public sector taking the lead in areas that can create large positive externalities, such as infrastructure, education, and health. 13. In this context, let me highlight some specific areas of policy priority. First, undertaking desirable structural change would require an improvement in resource allocation – moving production from low productive sectors to high productive sectors and promotion of innovation. Second, skill mismatches – a major constraint to resource reallocation –would warrant policy focus on education and skill upgradation. This is particularly important to the South Asian region, as the favourable demography of the region would require that production processes must be labour-intensive while being globally competitive. Third, while free trade and FDI have been conventionally congenial for diffusion of technology and augmentation of productivity, the region’s investment on R&D must also increase from the current low levels, and the policy environment for scientific research and start-ups must be made more rewarding. Fourth, investment in physical infrastructure – energy, transportation, telecommunication – which are prime drivers of productivity growth have to be enhanced. 14. Infrastructure in the contemporary world of digital revolution would also include digital infrastructure – data centres, cellular towers and fibre connectivity, with an emphasis on scalability and resilience. Fintech, E-commerce, Ed Tech, Health Tech and Food Tech are the new age growth propellers and need quality internet connectivity and reliable digital payments. Strengthening Cooperation for Energy Security 15. The South Asian region has a high reliance on fossil fuels and imported energy, making the region vulnerable to volatile oil, gas and coal prices. In view of the dominating influence of geopolitical factors in driving global energy market dynamics, the region needs to strengthen energy cooperation arrangements so as to enhance resilience to external shocks. 16. India and Bangladesh have already agreed to enhance the sub-regional connectivity in the energy sector by linking the power grids of the two countries synchronously. The India-Bangladesh Friendship Pipeline Project (IBFPP) – a 130 km pipeline joining Siliguri in West Bengal and Parbatipur in Bangladesh – would have a capacity to export petroleum products of one million metric tonnes per annum. Other examples of cooperation include transportation of petroleum, oil and lubricants across national jurisdictions. Similarly, cross-border petroleum products pipeline and joint venture hydroelectric projects are testimony to the immense scope for energy cooperation in the region. 17. Harmonisation of testing processes, performance and conservation standards, and labelling criteria for electrical appliances in the region can contribute to regional energy security by promoting cost savings and by boosting efficiency and trade. Integration of national power systems in the region could facilitate leveraging of untapped surplus hydropower while giving a fillip to development of solar and wind resources. Programmes of bulk procurement and distribution of energy-efficient appliances can be adopted by countries in the region. India, for example, has the UJALA (Unnat Jyoti by Affordable LEDs for All) scheme for distribution of LED bulbs at an affordable price. Cooperation for a Greener Economy in the Region 18. South Asia is one of the most vulnerable regions to climate change because of its large population and degradation of natural resources. Extreme climate events – floods, droughts, heat waves and unseasonal rains – have increased over the past century. As per the estimates of the International Finance Corporation (IFC), between 2018 and 2030, the funding requirements for investment in renewable energy, greening the vehicle fleet and making future building stock green and resilient to climate change risks in South Asia alone would be over US$410 billion, US$670 billion and US$1.5 trillion, respectively. Besides financing, access to technology and key minerals would also be critical for successful green transition. Robust regional disaster management systems could help in ensuring timely and effective response to devastating climate events. India spearheaded the global initiative and launched a Coalition for Disaster Resilient Infrastructure (CDRI) in 2019. Another initiative, the International Solar Alliance (ISA) in partnership with the Global Energy Alliance for People and Planet (GEAPP) aims at solarising the world. The South Asian region must strengthen cooperation to make green transition of the region faster and at reasonable cost. Promoting Tourism 19. Tourism is one of the major contributors to the GDP of some of the South Asian nations such as Maldives, Nepal, Bhutan and Sri Lanka. As a sector, tourism is a huge creator of employment. The entire region has rich untapped potential in tourism. In the recent period, the tourism sector has somewhat revived in the region, but is yet to reach pre-COVID levels. Intra-regional tourist flows also remain below potential. Regional initiatives such as religious tourism circuits spanning countries that have common historical and cultural footprint, adventure tourism circuits and medical/spiritual/Ayurveda circuits can help boost the tourism industry and create a vibrant regional value chain. Conclusion 20. With the global trade outlook for 2023 overcast, greater intra-regional trade in South Asia can enhance opportunities for growth and employment in the region. At the central bank level, a key dimension of cooperation in the region has been learning from each other on common goals and challenges, such as infrastructure financing, digital financial inclusion, reducing the cost of cross-border remittances (by linking with UPI system) and unconventional monetary policy, to name a few. Rupee settlement of cross border trade and Central Bank Digital Currency (CBDC) where the RBI has already started moving forward, can also be areas of greater cooperation in the future. 21. The book to be released today provides plenty of new ideas for forging cooperation in the region and seeking solutions to common problems through right policy interventions. I appreciate the efforts of the authors whose contributions made this book possible. I do believe that the discussions during the day on policy choices will help us in reshaping the future prospects of the South Asian region. Thank you. 1 Source: https://www.worldbank.org/en/programs/south-asia-regional-integration/overview

1. Year-ends are usually a time for introspection and 2022 clearly offers a lot of food for thought. On the bright side, humanity seems to be finally putting the horrors of Covid behind it. The rest of the story is not so bright. The specter of war and geopolitical tension has reared its head again. We were told in the late 1990s that business cycles were dead and inflation has been conquered. After the financial crisis in advanced economies, the focus shifted to deflation. When 2021 was drawing to a close the consensus among policymakers was that rising prices was a transient episode. That changed fast as inflation zoomed to multi-decade highs and was back in contention as the primary macroeconomic problem to be fixed. Rising interest rates, volatile exchange rates led by a strong Dollar and the consequent rise in debt burden has turned the narrative on its head. Inflation, it would appear, is giving a reality check to economists and policymakers alike. 2. In the much narrower world of fintech, with a much shorter history, one story- the story of cryptocurrencies, runs in parallel. We were closing 2021 with a narrative that ‘TradFi’ (Traditional Finance) was slow, inefficient and clumsy and ‘DeFi’ (Decentralised Finance) and DAOs (Decentralised Autonomous Organisations) was the path forward, riding on cryptocurrencies with their blockchain technology. Crypto prices, in their own jargon, were mooning and investors were HODLing. Since May 2022, cryptos have lost more than two-thirds of their value, and the ecosystem is unravelling. The technology that was designed to herald the end of Governments and regulators and intermediaries is frantically seeking to be regulated! Arthur Clarke, the science-fiction writer, said, “any sufficiently advanced technology is indistinguishable from magic.” He would have perhaps used the word ‘voodoo’ if he were to go by the promises peddled by crypto boosters. 3. But crypto-technology, of which cryptocurrencies were but one use case, is just one strand of the wider field of fintech. Financial sector has been going through a process optimisation using technology throughout its history. Over the course of the 1980s and 1990s, banks in India have evolved through Advanced Ledger Positing Machines (ALPM) to Data Base Management Systems to Total Branch Automation and finally to Core Banking Solution (CBS). A logical extension of this journey, as internet and mobile phone connectivity exploded, were internet and mobile banking. As of October 2022, there were approximately 33 crore active users of mobile banking services and approximately 7.5 crore active users of internet banking services. The revolution in data storage and processing capabilities has enabled non-banks to offer financial services such as peer-to-peer (P2P) lending, crowdfunding, alternative credit scoring, open banking etc. In the area of payments, the transformation has been particularly striking, with 24*7*365 RTGS/NEFT, UPI, digital pre-paid instruments, QR Scan & Pay, Bharat Bill Payment System (BBPS), AePS ushering in a new era of digital payments. New information technologies like cloud computing, APIs, big data and AI/ML methods will ensure that FinTech would be the dominant theme in delivery of financial sevices in the future. 4. Fintech is generally described as an industry that uses these technologies to make financial systems and the delivery of financial services more efficient. The rise of fintech – lending platforms, open banking, payment apps - is a major source of disruption to the banking industry. But these new business models and the transformation of existing businesses have brought new challenges for regulation. Regulators need to ensure that non-bank entities lying outside the regulatory perimeter for banks do not undermine the role of banks, raising financial stability concerns. At the same time, there is the need for these efficiency-inducing new technologies to be incentivised. Clearly, the entity based regulation of banks with its focus on health parameters like capital adequacy, leverage, liquidity or financial integrity requirements like KYC, AML/CFT requires to be adapted to the presence of fintech entities that are not subject to the same regulatory requirements. The concept of activity based regulation with the basic theme of ‘same activity same regulation’ has gained currency. The fundamental point is that any entity providing banking services needs to be subject to similar regulation as banks. An arrangement where regulation of non-bank fintechs are not aligned to the regulation of banks (or their subsidiaries) offering similar services will create inefficiencies and risks associated to regulatory arbitrage. Simultaneously, new risks associated with use of information technology like cyber crimes and frauds also need to be addressed if the wider population is to be encouraged to adopt digitisation. 5. How do we at RBI seek to address these challenges? RBI plays a dual role – as a developer of the financial system as well as a regulator. Its regulation is premised on three principles. First, innovation is to be encouraged. Second, innovation should be assimilated in the financial system in a non-disruptive manner. And third, the course of digitisation should at every step ensure customer protection. Encouraging Innovation 6. In the payment space RBI has played a role that is well recognised. Introduction of RTGS, NEFT, CTS have been achieved with its own initiative. Extending RTGS and NEFT to 24x7 has opened up scope for the growth and internationalisation of financial markets. Setting up appropriate institutions has been another prescient move by RBI. IDRBT, set up in 1996, and focused exclusively on banking technology has led the initial stage of technology adoption in the banking system through the creation of INFINET, National Financial Switch etc. NPCI, founded in 2008, has been the pioneer in digitisation of retail payments system in India, with its UPI, RuPay cards, AePS, BBPS and many other systems establishing India as the leading country in retail payment innovations. RBI came up with the guidelines on Account Aggregator as early as in 2016. With the traction that this ecosystem is witnessing, AAs are poised for bringing in the next set of innovation in the financial services segment. P2P regulations came in 2017 when the sector was relatively at the nascent stage in India. A Regulatory Sandbox framework was created in 2019 to incentivise adoption of innovative financial products or services in a controlled environment. The Reserve Bank Innovation Hub (RBIH) was set up for collaborating with financial sector institutions, technology industry and academic institutions for exchange of ideas and development of prototypes related to financial innovations. RBI, as well as the institutions it has created hold regular competitive events like the Hackathon to provide a channel for the fintech and start-up sector to showcase innovations. Non-Disruptive Innovation 7. No regulator has the luxury of letting innovation disrupt the financial system in the hope that market might reach its own equilibrium eventually. For instance, we cannot afford to let loose DeFi technologies on the financial institutions with virtually no understanding of how a bank-less system would operate. Apart from the unacceptable financial stability risks, this would amount to a regulator working towards its own irrelevance. It is necessary that a regulator controls the manner and pace of absorption of new technology. Allowing disruptive technology without clarity on whether the alternative is even feasible, let alone desirable, would be an unacceptable gamble. A key element for smooth absorption of new technology is to ensure a level playing field. If offering credit cards requires a banking (or similar) licence, allowing a non-licensed entity to offer them would amount to undermining the banking system, as it would be placed at a competitive disadvantage. Similarly, digital payments are essentially a banking service in the sense that they involve movement of funds from one deposit account to another. Deposit accounts are a necessity, technology merely a tool; deposit accounts can be used to make payments even without technology, but not the other way round. Facilitating a non-bank to use its technology to move bank deposits would amount to creating a competitive edge for the non-bank. It may be argued that non-banks could avoid use of bank deposits by maintaining deposit like funds, say, wallets. Then non-banks would be deposit taking entities, that is, they would be effectively banks which would require a banking licence. A less disruptive and more efficient mechanism is to facilitate banks to collaborate (or acquire) the new technology. Banks could also outsource or internalise the new technology. Would it disincentivise innovation? Not likely, if the non-bank technology is appropriately priced. 8. This brings us to the key issue of regulatory arbitrage. If we want to avoid the inefficiencies caused by differential regulations for similar activities, a non-bank undertaking banking functions, needs to be licensed and regulated like a bank. Without the license, it should not be allowed to undertake banking activities. This for example, is what RBI did recently when it clarified that PPIs (Prepaid Payment Instruments) cannot be funded out of credit lines, because it enabled an entity to undertake a licenced business without a licence. That regulation clearly established the principle of ‘same activity, same regulation’. 9. More generally, as long as innovations are compensated with appropriate market determined pricing, maintaining consistency in regulation would encourage innovation and enable absorption of new technology non-disruptivly. Customer Protection 10. Experience has taught us that market forces are unsuited to protect consumer interest in the absence of regulation. Whether it is the derivatives market or the LIBOR setting, unregulated markets eventually lead to outcomes that are inefficient for customers. RBI’s guidelines on storage of payments data are intended to secure users’ payment data. RBI’s warnings on cryptocurrencies and its public stance were guided as much by policy sovereignty as by the need to protect uninformed investors from being soaked. RBI was perhaps the first central bank to openly call for complete prohibition of cryptocurrencies in India. It is now recognized globally that a total ban is a valid policy option. It is a distinct possibility that ambiguous or equivocal stance of regulators globally has contributed to the surge in demand and valuation in crypto products in recent years. RBI’s caution has perhaps contained the damage in India. 11. In the payments space, India is one of the few countries that protects users through two-factor authentication. Although now it is recognised as an innovative regulation, at the time RBI introduced it, about a decade back, there was a push-back and criticism. Similarly, the recent measures such as better customer control on card usage, shorter Turn-Around-Times for transaction failures, tokenisation are all initiatives intended to protect the customer. 12. Regulation of digital lending apps is another example of regulations aimed at responsible practices and customer protection. A key innovation for financial inclusion and providing credit to entities that lack access to the traditional financial system, these apps nonetheless raised a host of business conduct issues such as unfair business practices, opaque interest rates, and unethical recovery practices. As a percentage of overall loan portfolio of banks and NBFCs, digital lending represents 0.31%2 and 0.55%, respectively in FY 2017. While still rather small, their potential needs to be realised, but in a responsible manner. RBI had earlier, in June, 2020, advised banks and NBFCs to adhere to fair practices codes and outsourcing guidelines. Given the emerging concerns, comprehensive directions were issued in September, 2022. These regulations specified the entities that were permitted to lend, transparent loan and pricing norms and fairness in treating customers. 13. In this context, an unexpected regulatory challenge has been what one might characterize as compliance-aversion. Financial entities traditionally subject to regulation understand that regulation serves the larger objective of systemic stability and development. Entities outside the financial space are still learning to adapt to a regulated environment. Consequently, their initial reaction to a regulation is objection. Ironically enough, the narrative created to justify such objection is usually customer inconvenience, even by industry bodies. The norms prescribed for recurring payments were criticised as inconvenient to customers until a survey3 revealed that more than 80% of customers welcomed the move. Although to a lesser extent, similar friction is occasionally exhibited even by regulated entities as can be seen in banks’ shunning of the FX Retail4 platform which would significantly improve the price for retail buyers/sellers of forex. RBI’s approach to regulatory aversion is to patiently ease in regulations, giving the eco-system adequate time to adjust. Global Coordination 14. A unique challenge for regulating fintechs is the need for global coordination. Since these services are on-line, and as in case of cryptocurrencies they span across national boundaries, effective regulation would require global coordination. Since technology by its very nature evolves faster than regulations, regulators would usually be lagging behind. A global common understanding of the risks involved and about the nature of regulation is necessary for it to be effective. The issue is further complicated by differential impact of such technology for different countries. For instance, stablecoin would not pose as much of a threat to the country whose currency is used as a peg, as it would to other countries. Evolving common understanding on the risks posed by fast mutating technology is likely to remain a major challenge. Internationalisation of Innovations 15. RBI’s developmental role has prodded it to not only take many technology initiatives itself, it has also started the process of extending the global reach of India’s premiere innovations. Internationalisation of Indian Payment Systems is a policy objective of RBI. After successful enablement of QR Code based payments through UPI at merchant locations in Singapore, UAE and Bhutan, RBI is collaborating with Monetary Authority of Singapore to enable cross-border person to person remittances in an instant and cost-effective manner. Additionally, we have allowed to deploy a UPI-like system for Nepal. Engagements are ongoing with multiple countries for UPI QR based payments, person to person payments, and developing UPI like systems. 16. To provide a more efficient alternative to private cryptocurrencies, RBI has embarked on the journey to introduce CBDC (Digital Rupee). It is expected to work as another efficient choice along with existing payment products. Digital Rupee can facilitate transactions in locations with limited or no internet connectivity and therefore, further financial inclusion. Going forward, it can be effectively used for delivery of Government subsidies and benefits using the feature of programmability which will lead to targeted or specified use of funds. Among the various benefits of CBDC, perhaps the most important is its potential to make cross-border payments faster and cheaper. Here again, a necessary precondition is that other countries develop their own CBDCs and there is a global understanding on the need to make CBDCs interoperable (basically by linking the various CBDC systems) and develop standards for effective interfacing. Conclusion 17. Being a regulator, as well as a central bank, RBI’s regulations focus on safeguarding national interests as well as being responsive to user needs. In the area of Fintech, creating an ecosystem to incentivise and harness innovation is a prime driver of our regulatory approach. In this era of global financial markets and fintech revolution, RBI’s mandate is to protect sovereignty and serve public interest. Our efforts are aimed at making regulation consultative and collaborative, and maintain policy independence. 1 Speech delivered by Shri T. Rabi Sankar, Deputy Governor, Reserve Bank of India at the Business Standard Summit on December 21, 2022 in Mumbai. Inputs from Shri Suvendu Pati, Chief General Manager, Fintech Department, Shri Chandan Kumar, General Manager, Department of Regulation and Shri K Vijaykumar, General Manager, Department of Payments & Settlement Systems are gratefully acknowledged. 2 RBI report on Working Group on Digital Lending including Lending through Online Platforms and Mobile Apps released on November 18, 2021 3 https://economictimes.indiatimes.com/industry/banking/finance/banking/more-than-80- indians-support-rbi-move-to-stop-auto-debit-localcircles-survey/articleshow/87314836.cms 4 RBI Circular dated June 20, 2019 on Rollout of the foreign exchange trading platform for retail participants – FX-Retail (https://rbi.org.in/Scripts/NotificationUser.aspx?Id=11597&Mode=0)

Tamal Bandyopadhyay: A very warm welcome to this fireside chat. I am a bit nervous sir. You always wear a different kind of tie. What is the brand that you prefer? Shaktikanta Das: It goes with the season and a Central Bank has to be for all seasons. Tamal Bandyopadhyay: Somebody told me that if you want to speak to someone and make them feel at ease, you start talking about ties. Mr Dave, CEO, HSBC India is sitting here. He was trying to excite me to ask all sorts of difficult questions. Mr. Dave, you do not know how good a communicator Mr. Das is. Last Sunday, there was the World Cup. Just for a moment, you think that we are not at Jio Global Centre, but we are at Lusail Stadium Qatar. If that is the case, just think about that and I am facing Messi on the Central Banking turf. Shaktikanta Das: I do not mind it but was Messi also a post-graduate in History. I am sometimes reminded by people that I am supposed to have done History. Tamal Bandyopadhyay: But your work and policy speak for you. Shaktikanta Das: On a serious note, let’s get going. Tamal Bandyopadhyay: I remember, in November last year, we had a fireside chat with you that was in the Reserve Bank of India, 18th floor. Very strongly then, you wished a war, if I may say so, against cryptocurrency. So, do you think that you have won the battle because the Finance Ministry has all along been ambivalent till recently? So, the cryptocurrency war is over, do you think you are a winner? Shaktikanta Das: No, there is no war or anything like that. We firmly believed then and do firmly believe even now that cryptocurrencies have absolutely no underlying. Cryptocurrencies have certain huge inherent risks for our macroeconomic and financial stability. We have been pointing it out and its developments over the last one year, including the latest episode that was built around the FTX. We do not need to say anything more about our stand. Time has proved that cryptocurrencies are worth what they are today. According to some estimates, the total value of cryptocurrencies was about US$180 billion, but now the value has come down to about US$140 billion or so, and about US$40 billion value has really got wiped out. The change in value in any product is a function of the market, but unlike any other asset or product, our main concern about crypto is that it doesn't have any underlying, whatsoever. The term cryptocurrency, private cryptocurrency is a fashionable way of describing what is otherwise 100 per cent speculative activity. There is a talk that it should be regulated. How it is to be regulated? Somebody needs to explain. I would like to mention three points. One, the origin of the cryptocurrencies, the private cryptocurrencies is to bypass the system, to break the system. They do not believe in the central bank currency; they do not believe in the regulated financial world. They want to bypass and beat the system. Second, they have absolutely no underlying. Not only that, I am yet to hear any credible argument about what public good or what public purpose, it serves. There is still no clarity about it. Third, it is a 100 per cent speculative activity. I still hold the view that it should be prohibited. Countries have been taking different views, but our view is that it should be prohibited. If you try to regulate it and allow it to grow, please mark my words, the next financial crisis will come from private cryptocurrencies. Tamal Bandyopadhyay: You are reiterating what you said earlier. I have a series of questions. I do not want to get into only GDP and inflation. So, a little different thing. You launched CBDC pilot projects. Can you very briefly explain to us, what's the use of CBDC? You said it is a currency, it is like currency notes and it is anonymous. But what is new there? I am happy using UPI and all, why do I shift to CBDC? Is it just an optic to fight crypto or there is something meaningful for me if people here use CBDC for retail? Shaktikanta Das: In the post-monetary policy statement press conference, I had explained the difference between UPI and CBDC. The first difference is, UPI is a payment system while the CBDC is the currency itself. Secondly, UPI involves the intermediation of banks, you pay somebody through mobile, then the message goes to the bank, your account gets debited, the bank transfers the money to the recipient’s bank account and the recipient’s bank account sends a message that so much money has been received. So, there is an intermediation of the bank. CBDC is like currency notes. You go to the bank, you draw it, you keep it in your purse and you spend it. What is more about CBDC is that there is an automatic sweep-in and sweep-out facility. 24 hours, you can draw CBDC and if you are carrying excess CBDC, you can put it back into your bank account. So, there is an automatic sweep-in and sweep-out facility. The third is the huge logistics, the cost of printing notes that is not there. Manufacturing paper, getting the ink, and having a printing press, all these things will become outdated over a period of time. Logistics-wise, CBDC will be much simpler, and it will be much faster. The next point is for international transactions. When two countries have their own CBDCs, it can be an instant money transfer between one country to another country. The whole world is becoming more digital. Almost in every sphere today, you have digital activities happening. Many central banks are still in the experimental stage. They are still analysing. Some central banks have started pilot projects. You will see in days to come; more and more central banks will embrace digital currencies and India has been at the forefront of the digital revolution in the current century. It is not a question of fear of missing out or it is not a question of offering competition to a private cryptocurrency rather that it is how the world is going to evolve and the digital world is going to take shape in the days and years to come and we have to be ready for that. So, it's a currency of the future. Tamal Bandyopadhyay: Sir, you said that you are a student of history, but let me take the liberty of asking you about economics which you know better than many economists. How decoupled is India from the rest of the world? How long the US Federal Reserve will continue to be the big daddy? Whether we want it or not, our eyes are on the FOMC meeting. One or two members of the MPC can dissent, but collectively the Reserve Bank of India and MPC’s eyes, you use that Arjuna's eye, what is FOMC doing, is it slowing down, etc., so, there is no escape from that? Shaktikanta Das: Being the largest economy in the world, naturally what the US Fed does, matters to everyone and a large part of global trade is also dollar denominated. Therefore, what the US Fed does is definitely important for everyone. So far as our monetary policy making and other decisions are concerned, we are largely guided by our domestic inflation growth dynamics and several other international factors. The actions of the US Fed are considered and studied, but that's only one of the factors. It is not as if something the Fed does, and we will have to follow that line. I have said earlier also, our monetary policies are governed and driven primarily by our domestic growth inflation dynamics. Actions of the US Fed do impact our domestic situation because if there is a tightening, let's say, the dollar becomes stronger, naturally the price of our imported goods will go up. Nobody is anybody's big daddy. In the current world, everybody has their own space. The days of big daddy and all that thing is 19th century, it is no more the case. But yes, the US is a major player. Let me reiterate that primarily, we are governed by our domestic factors. When I say it, I mean it. Tamal Bandyopadhyay: You brought in the two words, which are inflation and growth. 10 months in a row, the Reserve Bank of India failed to contain inflation within the band, which is nothing new, everybody knows and as we speak, it has gone within the band, etc. However historically, very often RBI's estimate of inflation is off the mark, actual inflation is higher than RBI's estimate. So, do we need to take a look at the composition of inflation or it could be the Reserve Bank of India needs to take a look at its assessment of inflation, where are we? Shaktikanta Das: We constantly keep on fine-tuning our models of inflation forecasting. Any forecast, whether it is of inflation or it is of growth by any central bank, not just the Reserve Bank, is always conditional to so many factors. Now, if the underlying conditions change or do not happen the way you had assumed, then naturally, the numbers will be different. However, in the last few prints, our expectations both on inflation and growth, we are almost getting it to the second decimal or the first decimal if not the second. Our estimate for the growth of the second quarter was 6.3%, and we got 6.3%. The last inflation print, which came at 5.88%, our expectation was about 20 or 30 basis points higher than that for November. So, sudden developments do take place. We keep on fine-tuning our model. What is important to see in the context of inflation forecasting is not whether you are getting the number right but essentially whether you are getting the direction of inflation right. Not only the direction but also the force of the direction. Whether we are able to read correctly that inflation is going to go up very fast or is going to go very steadily? So, it is the direction and the speed of the inflation movement while it is going down or while it is going up or if there is volatility. So, it is the direction and speed, underlying the inflation momentum, which is important; not just getting that number right because monetary policy is based on the direction of inflation, the broad speed of inflation and rise or decline of inflation. We do not go by that the inflation will be 6.34% or 6.48%, or something like that. Tamal Bandyopadhyay: So, talking about growth, Governor, you seem to be pretty conservative. In fact, in your latest assessment of growth, you pared it a bit, the World Bank assessment is higher than that. Why this sudden conservatism? Typically, you seem to be less bullish. Shaktikanta Das: The World Bank, in its latest projection, has projected a growth of 6.9% for the current year. We have given 6.8%. Primarily, it is because of the global headwinds. Europe and other large countries are facing a very serious growth slowdown. Five months ago, the talk of a global recession was much more intense. Now, the expectations built around recession have slightly moderated, but the fear of recession in many parts of the world or the fact of slowing growth is quite visible in large parts of the world. They will affect the external demand and external demand do contribute a lot to our growth calculation through our export performance, etc. So, it is primarily the international factors, the slowdown in growth all around, and the tightening of financial conditions the world over, all these external factors will have an impact on the domestic growth scenario, but the underlying economic activity in India continues to be strong. Most of the fast-moving indicators – RBI monitor about 70 fast-moving indicators – are in the green box during the last month. That means they are all picking up and they are still growing, but external factors are important and they will cause some dent in our economy. So, we have considered those aspects and, therefore, we have adopted this 6.8%. Tamal Bandyopadhyay: The latest bulletin, which was released yesterday, also spoke about what exactly you are saying. So, let's get from macro to micro. All these gentlemen, sitting here representing a large part of Indian banking –foreign, private and public sector banks – would love to hear your views. This kind of credit growth that we are seeing year-on-year, is it sustainable? Do you think that these gentlemen sowing seeds of troubles ahead? Will we again get into a bad loan or you think that Indian financial system and the bankers now know risk management, underwriting, etc.? Anecdotally, we hear private bankers saying that risk pricing is not exactly correct and probably, we are going overboard and all. Are you concerned about this or is everything fine? Shaktikanta Das: There are two aspects. Number one, the credit growth of 17.5% – the latest number as of December 2 – reflects the underlying fundamentals of our economy. The credit growth in the previous two years was very modest. In the first year of COVID, the credit growth was just about 6%; in the second year, it was slightly better. So, the current 17.5% is on a low base of the previous two years. There is a base effect which is also playing its role here. Secondly, the current credit growth is reflective of the underlying fundamentals of the economy, and it is also a reflection of the pent-up demand for credit over the last two years. So, considering all these factors, the credit growth at the current point is certainly far away from, what you call, exuberance or something like that. It is definitely very steady. We are monitoring it very carefully. On this point, let me also mention, because this question comes up again and again in any public discourse that deposits are not growing and credit is growing, are we heading for an unsustainable situation? I do agree that deposits must grow to sustain credit growth in the medium or the long term, but also certain facts will have to be kept in mind. The credit growth looks very high because of the low base of the previous year. The deposit growth also looks pretty low because of the base effect of the previous years. The deposits were growing by about 10% or 11% during the COVID period, so, the deposit growth – the latest data of 9.9% – is on a slightly higher base. Looking at the absolute amount over a period of the last one year, the credit growth in absolute numbers is ₹19 lakh crore and the deposit growth is ₹17.5 lakh crore. So, it is not as if there is a big gap between deposit growth and credit growth. The base effect of those is making it look much more divergent. At the current moment, I would like to say that credit growth is reflective of the underlying economic fundamentals and growth of the economy. Tamal Bandyopadhyay: Do you think that the banking system is pretty unfair to the saving community because you also spoke about the negative interest rate? You have an external benchmark for the loan rates; for deposits, it's free. So, what needs to be done if you want to attract savers to the bankers’ fold? Shaktikanta Das: All the leading bankers are here. Most of the banks have already started raising the deposit rates. Going forward, they will take a commercial call as they do need deposits. The banks also have a considerable amount of surplus SLR holdings, which they have the option to dip anytime they wish to. The weighted average lending rate on fresh loans has gone up by about 117 basis points. I remember 117 because during my student days, there was a DTC bus number 117. The last time when I read the number I visualised that particular DTC bus, that is how I remember 117. For the fresh deposits, both retail and bulk deposits, the deposit rates have gone up by 150 basis points. Deposit rates are picking up, going forward. It's a function of the market. Both lending rates and deposit rates are a function of the market and the Reserve Bank's policy rate. Deposit rates are picking up and they may even go up a little bit more or further. Tamal Bandyopadhyay: Thanks, Governor. You spoke about DTC bus number 117. I was wondering if Mr. Dayal sitting here, Chief Communications Officer, CGM, Reserve Bank of India, probably kept an invisible teleprompter for you. The way you are rolling out numbers. Shaktikanta Das: I will share my experience. The best thing to remember certain numbers is to relate something to your own experience. So, that is the best way to remember even a number like 117. Tamal Bandyopadhyay: The Reserve Bank of India has two roles. One is the developmental role, meaning the financial system stability, etc. There is supervision and all. Of late, the private bankers say that you are becoming a bit of a micro-manager and that you are running the banking system, not the bankers themselves, but the RBI. Whatever we are doing, we have to tell them, anything we need to do we have to tell them. They call it “micromanagement.” Is there any validity to what they're saying? Shaktikanta Das: I do not know; this is the first time I am hearing that. I do interact with the MDs and CEOs of the banks. I have not got that sense. Apart from the official engagement, I do know a lot of people who work in the banking sector at various levels, and personally, I know several people and get a lot of feedback from them about various banks. You have your friends, relatives or their children working in various banks. So, you get a lot of feedback from them. I have not heard anything of that sort. Perhaps, what you are referring to is the intense and deep supervision that we are doing. Over the last 3 to 4 years, we have deepened our supervision. In the United States, the failure of banks is nothing unusual. There are cases of bank failures, it happens, everybody takes it. In India, failure of a bank is not acceptable to the public or anyone and everybody looks at the RBI. So, it is our responsibility as the regulator and as the supervisor of the banking system to ensure that the banking system is stable, the banking system is robust and it is ready to cater to the emerging requirements of the Indian economy which has aspirations of becoming a US$5 trillion economy in the next few years and aspiring to be an advanced economy by 2047. Our focus is to ensure that the banks are stable and robust and keeping that in mind, we intensified and deepened our supervision methods. Our supervision approach is very constructive and friendly dialogue. Wherever we have difficulties and we are worried, we do have a meeting with the CEO of the public sector or the private sector bank and share with them our concerns. We are now looking at the business models of banks. For example, if we find that the unsecured retail portfolio, the loans, the unsecured loans, retail loans are rising very fast, and they occupy a larger space in the entire portfolio, the lending portfolio of the banks, we immediately flag our concern to the bank but we do not interfere. All we tell them is that please place it before your risk management committee. Have your risk management committee considered it? Have your Board considered it? We leave it to the Board. Our effort is to ensure that the banking system is robust and stable. It is nobody's intention to do micromanagement and/or macromanagement of banks. We do not interfere with that at all, but we keep on raising it wherever we feel some signs of worry or discomfort. We do raise those points with the bank and it is an ongoing exercise. Supervision of RBI is no more a year-end exercise. It is an ongoing and around-the-year exercise. We follow a very consultative approach with the banks. Right from the beginning, on the day of my joining the Reserve Bank four years ago, I had said that we will follow a consultative approach. The first meeting I held after taking over as RBI Governor, which I announced on the day of my joining, was a consultation meeting with the chief executives of both public and private sector banks. So, we follow a consultative approach, whether it is banks or other players in the financial sector. It is a very constructive relationship that we have. Tamal Bandyopadhyay: Now talking about IBC. IBC came into the picture in 2016. In the first lot, where Essar and others quite a few, there was a pretty good recovery then started slowing down. Now, NBFCs are also coming under IBC. There were at least two cases. I will not name them. The kind of offer they are getting is much less than the liquidation value. So, something needs to be done when you bring IBC for NBFCs also. It is a complete disaster. Prima facie, it seems, going by the numbers, something needs to be done. Shaktikanta Das: First thing is that we should not look at IBC as a mechanism for loan recovery. It's a new law. It was enacted in 2016. It is already 6 years old, but still, it is a new law. The legal jurisprudence around the new law develops. A lot of Supreme Court judgments have come and the jurisprudence around the IBC is now fairly well settled. The main challenge for IBC has been the time that is being taken. The initial idea was that certain things will happen in 15 days and certain things will happen in 90 days or 6 months. That has not happened and there are multiple reasons for that. So, there is the factor of delay. The second factor is, it is not a recovery mechanism. Nonetheless, how much money you are realising, how much recovery you are doing is very important, that cannot be wished away just like that. It is an important thing. When I say it is not a recovery instrument, it should be seen in the proper context. Recovery is important, I'm not denying that, but if you compare with what was getting recovered in the earlier regime – when the BIFR framework was there or the other frameworks which have been in place over the last so many years – compared to that, the recoveries under IBC, in terms of numbers, are far better. What is important is to make a timely invoking of the IBC. Traditionally, the approach has been that you wait for an asset to deteriorate up to a point and then you put it before IBC. What is important now is to identify the early stress in a particular portfolio and refer it on time to the IBC so that not only the recoveries of the credit are better, but also the company revives far better. So, a timely invoking of the IBC provision is also equally important, and it is improving. Under Section 227 of the IBC, we were given powers to apply it to NBFCs. As soon as we got the powers in July 2020, along with the regulatory powers with regard to housing finance companies, we referred the first case within 2-3 months. Thereafter, there were two cases, which have now been referred before the IBC. Let us wait for the outcome. It is in a very advanced stage. Both cases are in a very advanced stage. Tamal Bandyopadhyay: The 2024 budget is just months away. Reserve Bank of India will have its MPC meeting immediately after that. This is the last budget before the elections. Let us accept that the approach to the entire economy gets a different kind of shift in the run-up to the elections. The administration would love to talk more about growth than inflation. Do you think that your job will be more difficult now in the run-up to the elections? You spoke about the deposits are growing and the banks are having enough excess SLR which they can liquidate to support the Government borrowing programme. If you go by the media reports, they are talking about a fiscal deficit of around 5.0%-6.0%. We had a historically high Government borrowing programme this year, which you have pulled through almost, but the yield has gone up because there is a credit demand. Earlier during past 2 years, we could manage the yield because there was no credit demand and enough liquidity was available. Now liquidity is on balance with plus and minus depending on how the Government is spending. So, you do not have the advantage of that since the credit demand is there. So, the Government borrowing programme will not be as easy as you have managed till now. Probably, you need to allow the yield to go up. This is the sort of macro background. As a Governor, do you think that it will be more difficult now? Till now, you continued to say that inflation is enemy number one and even your latest bulletin also spoke about inflation, etc. So going forward, whether the growth-inflation dynamics will change because the election is knocking at the door only down the line. Shaktikanta Das: What will change I cannot say. The next Monetary Policy is still one and a half months away. So many things will happen by then. In any case, what we have in mind will be determined as we move closer to the MPC date. Many things can happen in between and we will take a decision at that stage. In any case, it is not possible for me to comment on what we will do in the next MPC. However, I would like to make it very clear that the fact of elections coming up in 2024 is not a factor at all so far as monetary policy making is concerned. Monetary policy making is for checking and controlling inflation. The Government is also equally serious about controlling inflation. I must say that to check inflation, there has been a very coordinated approach between the Reserve Bank and the Central Government in the sense that we have done our bit, we have taken a number of measures with regard to the rates, stance and liquidity. The Government has also undertaken several supply-side measures, like cutting down the taxes on petrol and diesel and reducing import duties on several other imported food items. Everyone is interested in bringing down inflation and I am sure that the Government would also be equally keen that inflation is brought down. But what matters for monetary policy? You use the term Arjuna’s eye. Arjuna only looks at inflation and growth. Arjuna is not looking at whether there is an election coming up. In other words, what I am trying to say is that in India, elections happen almost every year. There will be a combination of States also undergoing elections. So, the election is not a consideration so far as monetary policy making is concerned and monetary policy will do whatever is in the best interest of the economy. Tamal Bandyopadhyay: My last question, everybody would like to know about India's presidency at G20. So how do you see this? What are the opportunities you see? Shaktikanta Das: It is a great opportunity for India. It gives India a much bigger role in the international arena. India has now a much bigger role at the world stage. India will be chairing all the G20 meetings. It is a place for India to play a bigger role. The biggest task for the world community, not just for India, and for G20 is to restore the trust and efficacy of multilateralism. After all, G20 represents 85% of the world's GDP and about 75% of the world trade. The G20 as a group does matter a lot to the rest of the world. Over the last few years, multilateralism appears to be losing its efficacy, whether in the context of fighting COVID or in the context of dealing with various other global problems. The whole underlying theme of India is ‘Vasudhaiva Kutumbakam’, which is One Earth, One Family, One Future. So, it is one future which is important. The G20 as a group needs to address collectively that the most important thing is to restore the efficacy and trust built around multilateralism. India today; whether you look at it from the point of view of the way the world is growing or you look at it from the point of view of the current geopolitics that is happening today in the world; is uniquely placed to play that role effectively. Tamal Bandyopadhyay: Any message for this audience comprising bankers, NBFC, insurers, and mutual funds as the microcosm of the entire Indian financial system is present here. Apart from YouTube and other channels, there is a big screen and the other room also being live. Any last one-sentence message for them. Shaktikanta Das: Not one sentence, but maybe 3-4 sentences. One thing I would like to say is that in the last 3 years, the world has seen in succession multiple shocks of extreme severity, 3 black swan events one after the other. I have talked about it earlier. The Indian economy and the Indian financial sector today remain resilient and much better placed. For that the credit goes not just to the regulators, the credit goes to all the participants and the players in the financial sector, together all of us have done it. As we enter 2023, let us not think that the problems are over, there could be new challenges and there could be new battles, which we have to work on. We should all remain optimistic and together as we have done in the last 3 years. I am quite sure that we will work together, notwithstanding your comment on some banks having differences and feeling the heat. Notwithstanding all that, I am quite confident that the financial sector players and the regulators, not just RBI but the other regulators will be working together to maintain and strengthen the inherent resilience and capacity of the Indian economy. Thank you. Tamal Bandyopadhyay: Thank you, sir. It is confidence, optimism, and caution. I do not want to summarise and take a longer time. Like every good thing, this also has come to an end. Thank you for being so candid and not taking any offence to seemingly critical questions and observations. What I overheard in the corridors of bankers, etc., I took the liberty of asking you in the presence of everybody. Mr. Das has completed his 4 years. Last week, he started his 5th year. As and when he completes his 6 years, presuming that he is not getting another extension, in the Reserve Bank of India's 87-year history, he will be the second Governor to have 6 years. So, give him a big hand. Thank you, sir.

1. A very good morning to all the distinguished dignitaries and participants at this BFSI Insight Summit being organised by the Business Standard. I am very happy to be amidst you today albeit virtually. In recent times, this event has become a well-regarded platform for debate and deliberation on contemporary issues in finance and has generated useful insights from the wisdom of distinguished speakers who have graced the previous summits. 2. As we look back over the past decade and a half, what is really striking is the fact that the financial sector has been buffeted by several financial storms which it has bravely weathered. After each episode, the endeavour had been to ensure that the institutions emerge stronger and more resilient, so as to support the continuing narrative of recovery and growth. The episodes of crisis of late have become more frequent with lesser breathing space afforded to the institutions to recover, recoup and be future ready. The evolving situation demands that both the regulators and the regulated entities remain ever ready and well equipped to face the emerging challenges, be it the growth of fintech, digitalisation of financial services, customer service or the challenges of cybersecurity in the financial services sector. But the key risk which I would like to discuss today is the impact of climate change and what it can mean for the financial services industry. In a way I am revisiting a topic on which I spoke about a year back2 - climate risk and green finance. While this issue may still be the new kid on the block as far as the deliberations in such financial gatherings are concerned, it is fast becoming a key issue which is being discussed globally and the urgency of the situation is more apparent to one and all. 3. The recent Conference of Parties (COP-27) Summit in Egypt and the United Nations Environment Programme’s ‘Emissions Gap Report 2022 - The Closing Window’ released in October 20223 have once again brought to fore global attention on the measures required and the need for urgent action. The hierarchy of actions and the agencies responsible for the same is getting crystallised while there is a greater degree of agreement on the manner in which to proceed further starting from taking effective steps for reducing carbon emissions, to fostering sustainable patterns of production and consumption and transitioning to a sustainable lifestyle in a cleaner and greener earth. It is also clear that there is no room for differences on the issue and only our collective efforts can address the challenge of climate change. 4. Having said that, the question that emerges is what would be the role of different institutions in achieving these objectives? While the overarching policy approach would be guided by sovereign efforts and coordinated by decision-making bodies such as the COP, the financial world needs to ask the obvious question to itself - how can we help? As custodians of financial stability, central banks and policymakers would also be required to evaluate and examine the instruments or strategies they should leverage or focus upon to meet sustainability goals without compromising on their existing policy mandates. These are some of the dilemmas that I would like to highlight today in my remarks. 5. Given its wide ranging economic and financial implications, climate-related financial risks are already engaging the attention of international standard setting bodies, central banks, and supervisors globally with the focus on the need to promote the transition to a sustainable global economy. The Reserve Bank too had come out with a Discussion Paper4 on Climate Risk and Sustainable Finance earlier this year. Besides, RBI had also undertaken a Survey on Climate Risk and Sustainable Finance among leading scheduled commercial banks. There is a general consensus that banks and financial institutions will play a key role in financing the transition to a low-carbon economy and supporting the national climate commitments. 6. While no entity is immune from climate risks, we in India are particularly vulnerable to the climate change related physical risks5 and hence there is a need to be more alive to the urgency of action6 given our long coastline, high share of fossil fuels in energy systems, and relatively high dependence of rural livelihoods on agriculture. Climate trends and events have a direct bearing on the economy and resultantly have an impact on the financial institutions and the financial system. According to a report7, the transformation of the global economy needed to achieve net-zero emissions by 2050 would be universal and significant, requiring $9.2 trillion in annual average spending on physical assets, which is $3.5 trillion more than what is being spent today. In the case of India, the Council on Energy, Environment and Water8 has already estimated that a total investment of US$ 10.1 trillion would be needed to meet our net zero commitments by 2070. This underscores the urgency of efforts for transitioning to a low carbon economy. Ensuring access to adequate transtition finance and supporting technology would be critical in this process. 7. Going forward, there are two key aspects which banks would need to focus on - first, relying on their time-tested expertise in financial intermediation by acting as an effective conduit for channelising finance to carbon efficient sectors and industries in alignment with national policies and goals; and second, improving the management of financial risks in their books which may originate from climate change. Such risks range from the direct physical risks emanating from adverse climate-related events to loss of reputation and legal risks. Obviously, the strategies for mitigating these risks would have to be encompassed by sound public policy objectives and all stakeholders would need to play their role in helping the country traverse and transform into a climate-resilient economy. Challenges for Financial Intermediaries and Banks 8. Estimating the timing, frequency and severity of climate-related events is a challenging proposition given the uncertainties involved in the process. While significant progress has been achieved globally on developing scenarios and forward-looking approaches for modelling climate risks, the requirement of past data and the unpredictable nature of climate change makes estimation of climate events and their financial impact a challenging endeavour. Nonetheless, there is no alternative but to continue working on this path of self-discovery and slowly gaining momentum as we cannot afford to be inactive anymore. 9. The work at a global level which is being co-ordinated by the Financial Stability Board (FSB) and endorsed by the G-20, rests on four building blocks needed for addressing Climate-Related Financial Risks. These four building blocks, viz., Disclosures, Data, Vulnerabilities Analysis and Regulatory and Supervisory Practices and Tools which to my mind are pre-requisites for a resilient financial system when augmented by informed decision making. Let me discuss a bit further on these aspects. 10. An appropriate and adequate disclosure framework must have three key attributes - first, it should have inter-temporal consistency, second, it should be comparable and the third and most important is that it should be useful for decision making. Climate-related disclosures by firms, that largely contain these attributes, would help policymakers in understanding the enormity of the task ahead in terms of the transition funding requirements. Further, this would help banks understand the level of carbon intensity in the business ventures in case they are to fund them so that they are able to differentiate and appropriately price in such risks. 11. Internationally, a significant body of work has been done on disclosures. The FSB’s Task Force on Climate-related Financial Disclosures (TCFD) and the International Sustainability Standards Board (ISSB) under the IFRS Foundation have been leading this work along with other standard setting bodies. In March 2022, the ISSB published Exposure Drafts on its first two proposed standards. The first sets out general sustainability-related disclosure requirements while the other specifies climate-related disclosure requirements. Given the global nature of funding markets and cross-border flows of capital, the idea is to agree upon a common global baseline disclosure requirement which is interoperable among jurisdictions for comparability and consistency. The Reserve Bank, as a part of standard setting bodies has also been contributing and learning from global discussions and experiences. In our recently published Discussion Paper on Climate Risk and Sustainable Finance we have elaborated on how climate-related disclosure is an important source of information for different stakeholders (e.g., customers, depositors, investors, and regulators) of REs to understand relevant risks faced by them and their approach to addressing such issues. 12. For the corporates, beginning from the current financial year FY 2022-23, SEBI has mandated Business Responsibility and Sustainability Reporting (BRSR) for the top 1000 listed companies (by market capitalisation) in India. The disclosures under the BRSR framework would incentivize green financing and help banks and financial institutions in estimating their climate-related exposure to these listed companies. 13. While consistent and comparable disclosures, the first building block, would enable financial institutions make firm level risk assessments, the second building block, data, is required for making macro level assessment of risks. Like any financial risk, reliable and comprehensive data on climate risk related exposures would aid in making sound policy interventions and undertaking climate scenario analysis and stress testing for the assessment of risks from climate events. This however is, easier said than done. While global efforts are underway to create data repositories and provide guidance on collection of data for better comparability; availability of high quality, granular and sufficient data remains a challenge as of now. Availability of granular data also remains crucial for modelling the forward-looking nature of climate events and developing metrics for monitoring climate-related financial risks. 14. The third building block, vulnerabilities analysis, is again a macro level exercise to understand the financial stability risks arising out of climate events and their impact on financial systems. It is focused on analysis and stress testing using various scenarios to help in better assessment of potential pressure points in the financial system and in understanding interlinkages between financial sector and real sector. While the development of climate scenario analysis, stress testing scenarios and analytical tools are still in their infancy, the need for integrating them with regular monitoring exercises and overall financial risk assessment has been well recognised. One particular challenge in modelling climate-related risks is the long time horizon which has to be considered. The climate events may often span across decades, if not centuries, and this may make the data collection exercise quite difficult and the outcomes more uncertain. 15. The fourth and final building block consists of initiatives which are being undertaken or planned by the regulators and supervisors to facilitate transition. In a way, this is a culmination of the work taken up under the three building blocks discussed above. The regulators may need to fine tune the existing prudential policies to integrate the climate risks into the regulatory frameworks. At the same time, from a supervisory perspective, the expectations may have to be set and communicated to all regulated entities regarding climate-related risks, encompassing organisational strategy, governance, risk management and assurance functions. The global efforts undertaken so far seem to suggest that integrating climate-related risks and capturing them by fine tuning existing prudential frameworks may be possible. 16. The Basel Committee on Banking Supervision (BCBS) has published Principles for the Effective Management and Supervision of Climate-related Financial Risks in June 2022. In October 2022, the Financial Stability Board (FSB) published its Final Report on Supervisory and Regulatory Approaches to Climate-related Risks. Earlier in March 2022, the NGFS published a ‘Statement on Nature-related Financial Risks’, which acknowledges that failure to account for, mitigate, and adapt to nature-related risks could have significant macroeconomic implications and become a source of financial stability risk. While guidance has been made available, regulated entities may need time, resources, and capacity to integrate climate-related considerations into their decision-making frameworks and customer facing business lines. Private Sector Initiatives 17. In the private sector, decarbonization and digitalization are emerging as megatrends that could compel sectors and corporates to undertake structural changes and fundamentally alter their traditional business models. It is heartening to note that some of the leading Indian companies in the hard to abate sectors like steel and cement9, for example, are working on an ambitious decarbonization agenda aimed at reducing the carbon footprint in their production process. 18. Banks and financial institutions may have to to step up their engagement with their corporate customers on ensuring sustainability-focused financing and other support services to help them transition towards a low-carbon economy while reducing their own carbon footprint. The financial sector can channel resources towards green projects / businesses by offering suitable and customised products to businesses. 19. Over the past three years, the Sustainability-Linked Bonds and Sustainability Linked Loans (SLBs and SLLs) market has been a fast-growing segment globally in the sustainable finance market10. India too, has seen the introduction of sustainable finance instruments such as sustainability-linked loans. Liberalised External Commercial Borrowings (ECB) norms have also enabled Indian companies to raise offshore finance through green bonds, social bonds, sustainable bonds, and sustainability-linked bonds. In line with global trends, the issuance of sustainable debt has risen sharply in India during Calendar Year 2021 taking it to the 2nd place among emerging economies in cumulative Green Bond Issuances11. Mechanisms such as blended finance12 and risk-sharing facilities are also being utilised to finance climate and sustainability-related projects. 20. The above initiatives from the financial sector in India and across the globe make one believe that the private sector is very much alive to the challenges ahead of us. Public Sector Initiatives in India 21. To move the needle towards net zero, we must progressively decarbonise all sectors of the economy, including the hard-to-abate ones. This means that we would need to incentivise banks to provide support in terms of transition finance for businesses and sectors that are not so green, to adopt cleaner technologies, increase energy efficiency and become greener over time. Green finance can play a crucial role in making India’s economy resilient to climate change impacts. During the COP26 Summit in November 2021, the Hon’ble Prime Minister had announced that by the year 2070, India will achieve the target of net-zero. This would necessitate creating an enabling ecosystem for financing India’s transition to a green economy. 22. In India, both the Government and Reserve Bank of India have been participating in the global discussions on climate risks and have already taken quite a few initiatives in this regard. The Government, in the Union Budget for 2022-23 announced that climate action would be a key priority and proposed that as a part of its overall market borrowings in 2022-23, Sovereign Green Bonds (SGBs) will be issued for mobilizing resources for green infrastructure. The proceeds will be deployed in public sector projects which will help in reducing the carbon intensity of the economy. This is by no means a small step. Over time, the SGBs would provide a pricing reference for the private sector entities in India for their INR denominated borrowing for ESG linked debt. Thus, the issuance of SGBs would help in creating an ecosystem which fosters a greater flow of capital into green projects and entities undertaking such projects. 23. Recognising the need for concerted efforts in the area, the Reserve Bank has concomitantly set up a Sustainable Finance Group (SFG) within its Department of Regulation in May 2021 to lead the regulatory initiatives in area of climate risk and sustainable finance in the Indian context. As I mentioned previously, RBI had already released a Discussion Paper on Climate Risk and Sustainable Finance in July 2022 covering a gamut of issues on the RBI’s website for comments of stakeholders. It is heartening to mention that we have received comments from a large number of regulated entities and other stakeholders. These are being carefully examined before we frame any regulatory guidance on climate risk and sustainable finance. 24. Along with the Discussion Paper, we had also released the results of a survey undertaken to assess the approach, level of preparedness and progress made by leading scheduled commercial banks in India for managing climate-related financial risk. The survey, which covered 12 public sector banks, 16 private sector banks and 6 foreign banks, provided useful insights and the feedback from this exercise will help in shaping our regulatory and supervisory approach. 25. Another notable feature for our financial ecosystem is that while rest of the world is still grappling in developing new instruments to funnel funding to green and sustainable companies and projects, we already have a well-accepted incentive-based instrument in the form of Priority Sector Lending (PSL) norms to encourage lending to such projects. Over the years, we have been taking various policy measures to promote and support green finance initiatives through this route. For example, renewable energy projects have been included as a part of Priority Sector Lending (PSL). In 2012, Reserve Bank included loans sanctioned by banks directly to individuals for setting up off-grid solar and other off-grid renewable energy solutions for households and in 2015, the PSL criteria was expanded to bank loans up to a limit of ₹15 crore to borrowers for purposes like solar / bio-mass based power generators, windmills, micro-hydel plants and for non-conventional energy based public utilities, viz., street lighting systems, and remote village electrification. In 2020, this limit for bank loans was doubled to ₹30 crore. It is heartening to note that in recent years, leading banks in India have also begun stepping up their exposure to the renewable energy sector. Enablers for Scaling up Green Finance in India 26. Banks and financial institutions have always been the backbone of India's economic growth and as the country pivots to sustainable growth, they will have to take a lead and accelerate green lending. To support this acceleration, a number of structural changes may be needed in the traditional lending approach, including evaluation and certification of the green credentials of projects. In order to give focused attention to scaling up green finance, banks and financial institutions would have to invest in human resources and capacity building efforts as well as integrate environmental and social risk considerations into their corporate credit appraisal mechanisms. 27. A formal definition of green finance along with a taxonomy13 is the need of hour as it would enable more precise tracking of finance flows to green sectors in India, which in turn, would help design effective policy, regulations and institutional mechanisms directed towards increasing both public and private investments. A taxonomy would also help banks and financial institutions in better assessing the climate risk in their loan portfolio, scaling up green and sustainable finance and mitigating the risk of greenwashing. 28. Another key challenge in scaling up green finance is the availability of a robust ecosystem for third party verification / assurance and impact assessment and the green credentials of businesses and projects. This would also address potential greenwashing concerns and ensure unhindered flow of capital and funding to the entities. 29. The challenge regarding the availability of data and disclosures would also need to be addressed quickly. In this context, the disclosure standards prescribed by SEBI for top 1000 listed entities by market capitalisation is a welcome step. I am confident that the listed entities would not only adhere to the mandatory disclosures but would also not hesitate to follow those which are additional and voluntary in nature. 30. Green finance must be scaled up rapidly to meet India’s climate targets under the updated Nationally Determined Contribution communicated to the United Nations Framework Convention on Climate Change (UNFCCC) in August 2022. The enhanced ambition requires mobilization of green finance at a much faster pace. For example, green infrastructure investment trusts could help scale up green finance as also deepen the local bond market. But in the end, all these ideas need a clear intent from all stakeholders in order for it to be implemented and sustained. Concluding Remarks 31. To sum up, climate change may result in physical and transition risks that could have implications for the physical safety and financial soundness of individual regulated entities as well as for the stability of financial system. Thus, there is a need for regulated entities to develop and implement comprehensive frameworks for understanding and assessing the potential impact of climate-related financial risks in their business strategy and operations. 32. We need to be conscious that climate risk is the biggest challenge confronting us and addressing it decisively is our joint responsibility. Financial sector has a key role to play as it is the sector which finances businesses and can influence their activities. Banks would have their role cut out in handholding the businesses and arranging for the transition finance required by the firms as they try to shift their strategies to make them more sustainable and planet friendly. The central banks can play a significant role in shaping the response of financial sector to the challenges posed by risks emerging from the climate change through appropriate guidance and regulations. 33. The Indian economy is at a stage where we need to grow rapidly but the challenge before us is to think of ways to incorporate climate risk and ESG-related considerations into commercial lending and investment decisions while simultaneously balancing the needs of credit expansion, economic growth, and social development. Collective engagement would help build on our early progress and go a long way in addressing the challenges of climate change. Let me conclude now and leave you with these points to ponder as you continue with your deliberations during the course of the ensuing discussions at this event. Thank you for inviting me to share my thoughts at this summit and thanks for a patient hearing. 1 Remarks delivered virtually by Shri M. Rajeshwar Rao, Deputy Governor, Reserve Bank of India on December 22, 2022 at the Business Standard BFSI Insight Summit at Mumbai. The inputs provided by Sunil Nair, Brij Raj and Pradeep Kumar are gratefully acknowledged. 2 https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1127 3 The report can be accessed at https://www.unep.org/resources/emissions-gap-report-2022 4 Reserve Bank of India - Press Releases (rbi.org.in) 5 Physical Risks are economic costs and financial losses resulting from the increasing severity and frequency of: extreme climate change-related weather events (or extreme weather events) such as heatwaves, landslides, floods, wildfires and storms (i.e. acute physical risks); longer-term gradual shifts of the climate such as changes in precipitation, extreme weather variability, ocean acidification, and rising sea levels and average temperatures (i.e. chronic physical risks or chronic risks); and indirect effects of climate change such as loss of ecosystem services (e.g. desertification, water shortage, degradation of soil quality or marine ecology). (https://www.bis.org/bcbs/publ/d517.pdf) 6 The Global Climate Risk Index 2021 Report can be accessed at https://www.germanwatch.org/en/19777 7 https://www.mckinsey.com/capabilities/sustainability/our-insights/the-net-zero-transition-what-it-would-cost-what-it-could-bring 8 https://www.ceew.in/cef/solutions-factory/publications/investment-sizing-india-s-2070-net-zero-target 9 The steel and cement sectors are energy and emission intensive. They are also hard-to-abate, meaning that decarbonization of these sectors requires deep systemic changes in the way these materials are produced, used, and recycled. 10 https://www.linklaters.com/en/about-us/news-and-deals/news/2022/july/global-sustainable-bond-market-raises-442-billion 11 Source: Emerging Markets Green Bonds Report 2021, June 2022 published by the IFC. The report can be accessed at https://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/financial+institutions/resources/emerging+market+green+bonds+report+2021 12 Blended finance involves the use of concessional and catalytic capital to draw in private capital for financing projects with sustainable outcomes as also assist with technology transfer and institutional support, to reduce risk and enhance bankability. 13 A taxonomy is a classification system, establishing a list of environmentally sustainable economic activities. It plays an important role in helping an economy scale up sustainable investment and provides all stakeholders with appropriate definitions for the economic activities which can be considered environmentally sustainable.

Participants from RBI: Shri Shaktikanta Das – Governor, Reserve Bank of India Shri M. K. Jain – Deputy Governor, Reserve Bank of India Dr. Michael D. Patra – Deputy Governor, Reserve Bank of India Shri T. Rabi Sankar – Deputy Governor, Reserve Bank of India Dr. O. P. Mall – Executive Director, Reserve Bank of India Shri Saurav Sinha – Executive Director, Reserve Bank of India Shri R. Subramanian – Executive Director, Reserve Bank of India Dr. Rajiv Ranjan – Executive Director, Reserve Bank of India Moderator: Shri Yogesh Dayal – Chief General Manager, Reserve Bank of India Yogesh Dayal: Hello and welcome to the post policy conference. Today we are joined in this press conference by Governor Shri Shaktikanta Das; Deputy Governors Shri M. K. Jain; Dr. Michael D. Patra; Shri T. Rabi Sankar and Executive Directors Dr. O. P. Mall, Shri Saurav Sinha, Shri R. Subramanian and Dr. Rajiv Ranjan along with my colleague from the Monetary Policy Department. We have 21 colleagues from the media today. Before I invite them to ask questions, I would request Governor to kindly give some opening remarks so that we can start the press conference. Shaktikanta Das: Thank you. Good afternoon to everyone. Happy to have you here. This time in the statement, there is a particular para 15 where I have tried to summarise the key takeaways. Nonetheless, I would like to highlight six points as the highlights of today’s Monetary Policy. First, India's GDP growth is resilient. It is holding on and it is doing well in a world of slowing growth and possibilities of recession across several countries. Second, headline inflation is moderating. I would like to say that the worst of inflation is behind us. This point needs to be taken note of – the worst of inflation is behind us. Globally also the same trend is visible with the moderation in commodity prices, crude oil prices and several other prices. Third, while inflation is moderating and while we recognise and state that the worst of inflation is behind us, nonetheless, there is no room for complacency. We have to be extremely watchful and we will have to be nimble in our actions, should it become necessary. Therefore, the battle against inflation is not over. But let me reiterate, the worst of inflation is behind us and it is moderating we have given the inflation path till the second quarter of next year. Fourth, I would like to say about the liquidity. We are ready to undertake liquidity operations to inject liquidity, but we will look for durable signs of a turn in the liquidity cycle. Fifth, the story of the Indian rupee is one of resilience and stability. We remain committed to act to prevent excessive volatility of our exchange rate. Our focus will continue to be on the orderly evolution of the exchange rate. Sixth, the current account deficit is eminently manageable, and let there not be any doubt about it. To amplify further, the foreign exchange reserves have gone up from US$524.5 billion on October 21 to US$561.2 billion on December 2, 2022, that's an increase of US$36.7 billion. As I have stated, the external debt ratios of India are low by international standards. I would say that the overall status of the Indian economy is resilient. I think India stands out as an island of resilience in an otherwise volatile and gloomy world. Thank you. Yogesh Dayal: Thank you, Sir, for the opening remarks. To start the press conference, I will invite Mr. Anand Adhikari from Business Today to ask his question. Anand Adhikari, Business Today: Good afternoon, Sir. I just want to know about the RBI’s terminal rate in the current monetary tightening cycle, any estimate of the Fed terminal rate which RBI has, any estimate there? Shaktikanta Das: The first thing, I have to say, is that the Fed rate or the terminal rate is important for the whole world as also India because it impacts so many aspects, particularly with regard to the currency market. Our policies are primarily governed and determined by our domestic factors, the domestic scenario on growth and inflation. It is not a case that we look at the Fed policy rate and take our decision. We take our decisions on monetary policy rate stance based on our domestic factors. Yogesh Dayal: Thank you, Sir. I will move on to Mr. Govardhan Rangan from Economic Times. M. Govardhan Rangan, Economic Times: Good afternoon Governor. You spoke about inflation, the worst is behind us at the same time that we cannot be complacent about that. In your speech in the morning interaction, it will be data-dependent. So, if one puts all these three together if the data does not deviate from the path that you have projected; will they mean that you are closer to the peak interest rate cycle? Shaktikanta Das: We are living in an uncertain world. The outlook is extremely uncertain. Therefore, what we will do, if it doesn't match our expectations is something on which, it's not possible for me to comment at this stage. What we are saying is that we will keep on monitoring the overall outlook and, as and when necessary, we will act. Throughout, almost the last three years now, we have acted, whenever it was necessary, proactively, effectively, in all respects; not just with regard to interest rates. When we reduced the interest rates, our effort was to be as nimble as possible. Now, when we have been increasing the rates since May, we have also been guided by the incoming data and the outlook. From that, what conclusion you will derive and what it indicates is something which will be your interpretation. It is not possible for me to say whether it means this, or it means that. I hope, I have answered your question, but please understand that we will go by our domestic factors, and we will watch the incoming data because it cannot be backward-looking. We will also keep on assessing the future scenario and the emerging, evolving dynamics of inflation and growth and then act. Yogesh Dayal: Thank you, Sir. I will move on to Ms. Latha Venkatesh from CNBC-TV18. Latha Venkatesh, CNBC-TV18: Governor, at the current repo rate of 6.25%, your one-year down forecast inflation is 5.2%. If you take the average of Q1 and Q2 for next year. So, your real rate ex-ante is 100 basis points. When you shifted from neutral to accommodation, it was 2%. Shaktikanta Das: 85 basis points, exact arithmetic will be 85 basis points. Latha Venkatesh, CNBC-TV18: Yes. So, do you want that kind of a real rate, what do you have in mind, since you quoted that in past also in the previous policy? Shaktikanta Das: We have been discussing this at length internally, I would request Deputy Governor Dr. Michael Patra to take this question. Dr. Michael D. Patra: As you heard Governor, the real rate is just 85 bps. That will be achieved only in the second quarter. At that time, what will be the inflation gap, will inflation be at target, is the question that we need to ask. Latha Venkatesh, CNBC-TV18: You have brought a new phrase core inflation when you explained your stance, saying that the MPC will look at the calibrated increases and break the persistence of core inflation. So, do you have a trajectory? Do you want that also to come to the fore? Shaktikanta Das: Core inflation is not the first time that we are talking about it. We have talked about it earlier also. Over the last six to seven months, it has remained sticky at around 6% and that is what I have said. All that I have done this time is that we have placed it on the table as this also needs to be specifically addressed and kept in mind when we are decomposing and breaking up our inflation analysis. Yogesh Dayal: Thank you. I would now invite Mr. Brajesh Kumar, Zee Business News. Brajesh Kumar, Zee Business News: My question pertains to KYC. If a customer wants to open an account, the bank says that they will open the account online. So, if you can open a bank account online, KYC verification is done without going to the bank branch then on renewal of KYC, why do we need to visit the branch? Further, if your KYC is done in one bank, is there any centralised system that you don’t have to do separate KYC for the different banks? Shaktikanta Das: Re-KYC you can do it online, it is not mandatory that you have to visit the branch for that. Executive Director Saurav Sinha will explain it to you. Saurav Sinha: Thank you, Governor. As the Governor mentioned, you don’t have to go to the branch, if you are doing your Re-KYC. If there is no change in any of your KYC details then you can simply send one email or send a message from your registered mobile number to the bank and your Re-KYC will be done. If there is only a change in your address, with the same process you can send your new address to the bank and the bank will verify the new address. The verification will be done in two months. The bank will do that by sending a letter to the new address, etc. Regarding your second question, if one bank has done KYC, do you need to do the KYC for a different bank all over again, absolutely not. There is a Central KYC Registry (CKYCR). In CKYCR, an identifier number is given to you. If you share your identifier number with other banks then there is no need to resubmit KYC documents to another bank again. Brajesh Kumar: Sir, there is the feedback that the bank calls us and says you need to come to the branch, we will do KYC in the bank only. Saurav Sinha: For that, there is Ombudsman Office. There are different channels also that you can use. Possibly, such issues stem from the lack of knowledge and lack of awareness. You can bring that to the notice of the bank. In case you still have any difficulty, you can go through our non-legal fast resolution route. Shaktikanta Das: Our regulations are very clear and transparent in this regard. As you said, this might happen at some branches. Awareness is needed for this. We receive complaints through the Ombudsman. The Ombudsman intervenes and sorts out those things. It might be a sheer lack of knowledge and more awareness is necessary for this. We reiterate internally these instructions to all banks and follow up with them where we receive more complaints. Yogesh Dayal: Thank you, Sir. I will move on to Mr. Manojit Saha from Business Standard. Manojit Saha, Business Standard: Good afternoon, Sir. I have two questions if you kindly allow them. Firstly, when do you see core inflation coming down? You mentioned about core inflation many times in the statement today and markets have reacted to that. The second is some of the MPC members have given their views. I would like to know your view. Do you think MPC should consider the exchange rate movement while deciding on the interest rate? Shaktikanta Das: What the MPC considers and what aspects go into the MPC’s discussion, you will have to wait for the minutes. It will be published exactly two weeks from today. So, you will have to wait for that. Manojit Saha, Business Standard: I am asking do you think MPC should consider exchange rate movement while deciding on the interest rate, is that a consideration? Shaktikanta Das: Let me mention that the consideration is the growth and inflation and what is provided in the law. Monetary policy is for a different purpose. It's not for capital flows. It is not for exchange rate management. In exchange rate management, our focus is to prevent volatility and attract capital flows. If that is what you are implying, there are other instruments which have to be used. We used some of it. We made some announcements on 6th July of this year. So, the focus of monetary policy has to remain on domestic inflation growth dynamics. Manojit Saha, Business Standard: Can you use core inflation? Shaktikanta Das: Our target is headline inflation. We analyse the headline inflation and of course, as a part of that other aspects like food inflation, non-food inflation, non-oil inflation, and fuel inflation; all these things are analysed. We do not give what will be the future number for core, for fuel for food, separately. Our target is defined in terms of CPI headline, and that is why we give that projection, other projections we do not give. Yogesh Dayal: Thank you, Sir. I will move on to Mr. Shashank Didmishe from Financial Express. Shashank Didmishe, Financial Express: Sir, what steps is the RBI taking to resolve the differences between the foreign regulators on the settlement of trades? And what is the impact on the domestic operations of foreign banks in India? Shaktikanta Das: Deputy Governor T. Rabi Sankar will take that question. T. Rabi Sankar: I presume you are referring to the ESMA issue that is making the rounds. The discussions are continuing. We hope to achieve some sort of understanding by that. There is no disturbance as of now. We will see when it comes to that. We would prepare, should there be any possibility of a disturbance. We will be well prepared to handle those. Yogesh Dayal: Thank you, Sir. I will move on to Mr. Benn Jose from PTI. Benn Jose, PTI: The policy document is speaking about India being a bright spot, and India has decoupled from the rest of the global economy. For MPC, how bright is that spot and how long we can remain bright? Decoupling, many analysts say that we are mostly decoupled, most of our markets are decoupled from the rest of the world. Where does RBI see that? Shaktikanta Das: The phrase bright spot is not an RBI invention. It is IMF, which said that India is a bright spot. I was drawing from what the IMF said, that is with regard to the phrase. As I said, India is an island of stability in a very turbulent world. In this statement, if you go through it carefully, I have said at one point that in an interconnected world, we cannot be entirely decoupled from what is happening in the rest of the world. In certain aspects, yes, India appears to have decoupled, but when the world is so interconnected, we cannot be entirely decoupled. Therefore, it is not a question of black and white. There are lot of interconnectedness between what is happening globally, when we talk of spillovers. The spillovers affect all emerging market economies, including India. So, we have not entirely decoupled. Yogesh Dayal: Thank you, Sir. I will move on to Mr. Anup Roy from Bloomberg. Anup Roy, The Bloomberg: Sir, Finance Minister has said that growth is our top priority now. As per your assessment growth is dipping a little bit. Your commentary on inflation, the market interpreted it as very hawkish and they were expecting that you will give a good signal and there will be a pause after this or there will be a slowdown, but you said that the battle against inflation is not yet over. So, what kind of impact that will have on growth and is growth not a top priority for you now? Shaktikanta Das: No, I did not say that. What does the policy say? What does the legal provision say? The RBI is expected to maintain price stability keeping in mind the objective of growth. For the government, growth naturally has to be the top priority. In fact, in my statement in one paragraph, I have said that we have to also focus on growth. I have referred to the opportunities for investment coming out of the innovations in new technology. I have talked of climate change opportunities for investment. PLI also being an area, which will attract a lot of investment. These are the opportunities available for India to attract and undertake more investments. Why inflation management is so important? Inflation management is not important just for its own sake, the aspect of price stability is essential because that is needed for medium-term growth. If inflation goes very high, investors will stop investing. So, you have to manage inflation, price stability has to be maintained in the interest of growth. There is no contradiction between the two. Anup Roy, The Bloomberg: What would be your expectation from G20 meets, and what will RBI try to achieve? Shaktikanta Das: We are a part of the finance track of the G20 meeting. As you know in the G20 meetings, there are several tracks, but broadly there are two tracks, one is the Finance Ministers and Central Bank Governors’ Track, which is known as the Finance Track. Another one is the Sherpa Track, which takes into account a lot of the other aspects, like Climate Change, Health, Nutrition, Vaccination, etc. Finally, they all converge when the Leaders Summit takes place, and the Communique is issued. It is not possible for me to say, what will be the outcome at this stage, but as I said in my statement, it is a great opportunity for India to play a bigger role in the international arena. There is a lot of expectation from many countries. They are looking up to India to play a larger role in many aspects, whether it is with regard to innovations in Fintech, Digital Payments or in several other areas. Therefore, this is a big opportunity for India. We will participate in the discussions in the Finance Track. The government has already set out the agenda for the Finance Track separately. So, we will be participating in those discussions. Yogesh Dayal: Thank you, Sir. I will move on to Mr. Mayur Shetty from The Times of India. Mayur Shetty, The Times of India: Governor, the policy rate is now pretty close to where the inflation is. Do you see the rate being a neutral one right now, and also the inflation forecast for the next year within the tolerance band? So, if it remains within the tolerance band, would you say that the goal has been achieved of the monetary policy? Shaktikanta Das: Dr. Patra can take that question. Dr. Michael D. Patra: The Governor said that the battle against inflation is far from over, so we remain on guard, until we see a durable decline in inflation and it is staying within the tolerance band, but the good thing is what you are pricing in. We have lowered the size of the policy rate change. That is the most important thing, which unfortunately is getting priced in. This has come after a lot of deliberation. After a continuous 50 basis points increase, it has now moderated. It tells you of a shift in a way. As the Governor pointed out, we are open to the correction that the worst of inflation is over, but the moderation of inflation will be very grudging and uneven, so we must shepherd inflation first firmly into the tolerance band and then to the target. Yogesh Dayal: Thank you, Sirs. I will move on to Mr. Shayan Ghosh from Mint. Shayan Ghosh, Mint: Sir, I wanted to understand a bit about how are we factoring CBDC you have talked about that as you mentioned in one of your earlier speeches as well, also if you can give us an update on what kind of transaction has happened? Shaktikanta Das: I will address a different question on CBDC because a lot of people have been raising this question, so I will clarify that and then I will pass it on to Deputy Governor, Rabi Sankar to specifically address your question. A number of people have been asking RBI, to me and also questions have been raised in the newspapers, and in the electronic media as to what essentially is the difference between UPI and this CBDC. Any UPI transaction involves the intermediation of the bank. So, when I use a UPI app, the message goes to my bank, my bank account gets debited, money gets transferred to the recipients, to the receiver's bank, his account gets credited and he gets a message in his mobile phone. So, there is an intermediation of the bank in that process. In CBDC, just as paper currency, you go to a bank, let us say, you are drawing some ₹1,000 currency notes, you draw ₹1,000, keep it in your purse, you go to a shop, you have to pay ₹500, you take out ₹500 and pay. Here also, you will draw the digital currency and keep it in your wallet which will be basically your mobile phone and when you go and make a payment in a shop or to another individual, it will move from your wallet to his wallet. There is no routing or there is no intermediation of the bank. I thought this is necessary to clarify this point because a lot of people have this question about what is different between UPI and CBDC. With regard to your question, DG Rabi Sankar can answer. T. Rabi Sankar: Just to expand a little bit, what the Governor said, e-Rupee is money and UPI is their payment method. So, you can use any payment method to move money, so once that conceptual understanding is there, you will understand the difference. The key point is that UPI is the movement of money from one bank account to another bank account that is what the Governor has said. This is the payment of cash. It is possible that two private entities can provide wallets and the money can move between them. That is not possible. The UPI has to be necessarily between the bank and another bank. The fact that e-Rupee is money, its use cases can be many more as money has various functions. It can do any of those functions. Given that, it all depends on how much our startup ecosystem or fintech system innovates on this, and what kind of payment channel opens up using e-Rupee as the base. What actually will happen, we will have to wait and see. We will set up the base system, then the private sector can innovate. Coming to your question on anonymity – a fundamental feature of currency. One of the reasons cash is still being used in many developed countries to a large extent is that people love privacy, and people love their anonymity. So, for anonymity purposes, currency can be used. How anonymity is to be ensured in the case of a digital currency because the normal understanding is anything digital leaves a footprint can have various solutions. We are looking at the largely first technological solution. We understand there are technologies possible to do that. So, we can use any one of those. It is also possible to get a legal provision to ensure anonymity. So, what exactly will happen will depend on how things evolve, but anonymity is a basic feature of currency and we will have to do that and to that extent, it is again different from UPI. Thank you. Latha Venkatesh, CNBC-TV18: Is there legal cover coming, that is the crux. Technology cover can always be pierced by better technology. We have to look for a legal cover, otherwise, why would I use it? Shaktikanta Das: The amendment in the RBI Act with regard to the CBDC says that currency will also include digital currency. That is the amendment which has been brought. Therefore, in all respects, there is no difference in the eyes of law, and there is no difference in treatment between paper currency and digital currency. The income tax department has got certain limits for cash withdrawal, for cash payment. Beyond the certain limit, you have to give your PAN card number. The same rules will apply in the case of the CBDC also. Because both are currency. So, that is how. Latha Venkatesh, CNBC-TV18: There is a fear that the ED will one day come and tell the bank, to give me to whom it was transferred to. Shaktikanta Das: Let us be clear. When you pay in currency notes to another person, your identity is anonymous. Incidentally here also, you cannot find out because the information is not available to the bank, so therefore the bank doesn’t know. It goes from my mobile to somebody else's mobile. So, why should we create this kind of fear psychosis? There is a law of the land and these are early days. The pilot on retail has just started. The experience of the wholesale CBDC pilot has been very satisfactory. It has been very satisfactory outcomes, we have noticed. The technology has by and large worked. The processes have by and large worked, and market participants and others are very happy that there is no need for collateral while doing G-sec transactions. There is no need for collateral and it is an instant settlement. So, the feedback from the first pilot on wholesale CBDC has been very satisfactory, but there are some learnings and we are working on that. Coming to retail, it has just started from 1st of December, today just about one week. As we go ahead, there will be several learnings and we will try to fine-tune but let there not be any sort of fear psychosis that somebody is going to chase and all. I think that would be unfair to the whole exercise. Thank you. Yogesh Dayal: Thank you, Sir. I will move on to Mr. Ankur Mishra from ET NOW. Ankur Mishra, ET NOW: Sir, you have mentioned that the worst of inflation is behind us and speaking completely on data like crude you have assumed it to be over 100 which is around 80 now, so if the worst of inflation is behind us, is the rate hikes which have been done till now, most of the rate hikes are also behind us? Shaktikanta Das: That is for you to assess. Dr. Patra can take that question. Dr. Michael D. Patra: As I pointed out, we have moderated the size of the policy rate increase. That is the very fundamental guidance that we are giving to the market. If things pan out as we have projected then the rates of 50 basis points consecutive increases are over but, we cannot take a shoe off the brake because inflation is still averaging 5% to 5.4% next year. So, we must guide it to a place where it remains stable at those ranges and then move on to 4. Till then, we must be on our toes that is the thing. Ankur Mishra, ET NOW: Another question on the widening gap between credit growth and deposit growth is something which has been a concerning factor for banks. Has there been any communication with banks so far, is there any direction which RBI has given? Shaktikanta Das: No, RBI doesn’t give any direction to the banks with regard to their interest rates on either side, whether credit or deposit side. The credit growth and the deposit growth have to be seen from the proper perspective. The credit growth is on a low base. The deposit growth is on a high base. That is why it appears the divergence between the two, they look to be so divergent. During the whole period of the pandemic or even last year, there was hardly any credit growth which was about 5%, 6% or so, low base, but deposit growth had picked up in the first two years of the pandemic. Whatever is now happening based on the deposit side, the growth has to be seen in the context of the base effect. The banks do their asset liability management and depending on their funds' requirements, depending on their own asset liability assessment, they will take necessary action, both on the credit side as well as on the deposit side. We keep meeting banks. I had a recent meeting with bank executives. That is nothing to do with the interest rates because that is deregulated. That meeting is to take stock of the overall banking sector, where it stands, what are the challenges, and what are the possible risks. It is broadly an assessment of the overall banking sector and what is the outlook and we need to hear from the banks also. While we keep on making our assessment we would also like to hear what is the assessment of the banks. Yogesh Dayal: Thank you, Sirs. I will move on to Ms. Chloe Cornish from the Financial Times. Chloe Cornish, Financial Times: With regards to the confusion or the difficulties with ESMA, I was wondering what the remaining points of contention are and if RBI decided to concede anything at this point. Shaktikanta Das: Deputy Governor Rabi Sankar may answer that question. T. Rabi Sankar: Apart from what I responded to an earlier question, I do not think there are any further details that we have to give. The discussion is going on. This is the fundamental point of divergence remains the fact that an Indian entity that does not operate in European Union and operates entirely in India is being subjected to regulation by a European Union regulator, European union because you have cited this case, but this all suits a few others as well, like Japan, for example. We have an agreement with them, they simply went ahead, and they said they made an assessment, and it is good enough. It is equivalent, so similar things can be done. We are working towards that. The details are for the teams to discuss, but once this fundamental point of divergence, we reach some sort of an agreement, I think we will be able to sort out the details. Chloe Cornish, Financial Times: The fundamental point of divergence remains. They are not accepting your position on this. T. Rabi Sankar: We are discussing at this point in time. Shaktikanta Das: Let me just supplement. That is under discussion and we are quite hopeful that some resolution will be found. Let me also say that India today is different from what it was. I don’t want to mention when, 10 years ago, 20 years ago, 30 years ago. Our regulations today are very robust. In fact, we are fully compliant with the CPMI guidelines under the edges of the Basel framework. We comply with all the CPMI standards. We comply with all international standards. Our market infrastructure is very robust. It is also necessary for regulators on the other side to appreciate and trust the credibility and strength of the Indian regulations. That is what we are trying to impress upon them. It is under discussion and we are hopeful for resolutions. Yogesh Dayal: Thank you, Sirs. I will move on to Ms. Swati Bhat Shetye from Reuters. Swati Bhat Shetye, Reuters: Sir, you mentioned core inflation remaining sticky, can you please explain what are the factors which are keeping the core inflation sticky and is that also suggesting that there is a lot of demand-led inflation that is cropping up? Is that a reason why we are continuing with rate hikes? Secondly, just wanted to understand, forward premiums have crashed to a decade low, how long do you see premiums staying there and how will it impact the spot rate? Dr. Michael D. Patra: Just on core, there are many factors in the play out, one is for instance the passthrough of input cost, you saw the corporate results of the second quarter and you see that expenditure growth has been outpacing revenue growth mainly because of the passthrough of input cost. There is also an exchange rate pass-through that is going on, so imported inflation pressures get in. We are noticing that non-tradable, that is services, where inflation tends to stay and is very stubborn. Those prices are now started rising. Initially, it was the goods part of the core which was rising, now it is services. So, these three things warn us that we need to be on our toes about second-round effects because they can generalise. They can spread into other categories that are what we are trying. We are also trying to assure people that we are on the job and we will bring down the core and which has already been visible in the expectation survey, which is released today and shows that there is a perceptible decline in expectations. Swati Bhat Shetye, Reuters: What about the spot rate? Shaktikanta Das: What would be the spot rate, obviously, I cannot comment. Swati Bhat Shetye, Reuters: Sir, but the forward premia had earlier fallen to a decade low, how long will it stay there, it also complicates the exchange rate management for the RBI. Dr. Michael D. Patra: What it is telling us is that there is a cash shortage in the spot market, but that is now getting alleviated as the forward premium has started to correct today, so flows are coming back. There was a downward dip in the exchange rate to which people responded by holding back the proceeds coming in. Governor has given specific assurances on the exchange rate and on the external sector, we see the premiums rising. Yogesh Dayal: Thank you, Sirs. As I was mentioning, we will take the last few questions. So, I will invite Mr. Vishwanath Nair from BQ Prime to ask his question. Vishwanath Nair, BQ Prime: Governor, two questions, firstly, on one side, you are extending the date for these enhanced HTM limits, letting banks manage their investment portfolios better, but similarly, in your statement, you said that you should be off liquidity surpluses, this is also a time when credit growth is sort of picking up, it is at decadal highs, I am trying to understand how do you make sense of these two statements? Shaktikanta Das: ED, Saurav Sinha, you would like to take this question. Saurav Sinha: The two are a bit unrelated. The reason why this extension in date has been provided is to enable banks to better manage their investment portfolios. Because from the 1st of April 2023, they would then require to wind down their positions, so now that date has been extended by one more year to enable a smooth process for the banks. Vishwanath Nair, BQ Prime: The other question is on CBDC. Since you have expanded so much on it, I wanted to bring this up. Currently, no shop owner can refuse if you pay in rupees in hard cash, no shop owner can say I am not going to accept that money. Will that be extended to CBDCs? Can a shop owner say I do not want to accept payments in CBDCs or will they be legally required to accept that payment, if it is given? Shaktikanta Das: Currently, it is only a trial and it is a closed user group of a large number of merchants and customers. The trial is restricted to them as a closed user group. Going forward, there will be several challenges. We will deal with all those challenges. These kinds of questions and issues will come up before us and as we move forward, we will deal with them. Yogesh Dayal: I will move on to Mr. Hitesh Vyas from The Indian Express. Hitesh Vyas, The Indian Express: Sir, World Bank recently upgraded India's GDP forecast to 6.9% from 6.5%, while RBI has slashed the rate to 6.8% from 7.0%. I want to understand why there is a difference of opinion between the two entities in terms of the revision of GDP forecast. Shaktikanta Das: It is only a 10 basis points difference. I don’t know on what basis they have arrived at 6.9%, I don’t have their internal assessment. In our assessment, we have done this slightly mild adjustment mainly because there are certain developments in the external sector of the exports and taking the latest trends into account. It is a mild adjustment with risks evenly balanced and there are several possibilities. When we say risks are evenly balanced, that means 6.8% will also go up to 6.9% or 7.0%. In our current assessment, we have said that it is 6.8%. With regard to the external sector challenges, one point, which I have mentioned in the statement is very important, is that while merchandise exports have contracted in the last month, the services exports have picked up very strongly – 29.1% growth in services exports. So, it is a mild adjustment of 10 basis points that we have done. Yogesh Dayal: Thank you, Sir. I think the last person I will invite to ask the question is Ms. Pratigya Vajpayee from Informist Media. Pratigya Vajpayee, Informist Media: If one goes by the bond market reaction, your 35 basis points rate hike feels like a 50 bps. I would like to ask if a 50 basis points hike was even a consideration this time. Secondly, considering that India's growth is resilient and in a weak global environment this is going to aggravate India's external trade balances, so in this context, is demand curtailment a consideration for RBI? Shaktikanta Das: I explained in my statement that the current account deficit (CAD) is eminently manageable. The remittance growth rate for the first quarter was 22.6%. The World Bank says that we will get US$100 billion during the year. Going by the first quarter data, the World Bank is projecting a 12% growth, but our first quarter growth is 22%. The remittances are picking up. Services exports have also fundamentally picked up. There are data to show that global IT expenditure is also rising, therefore it will all depend on how the situation evolves. but what was your fundamental question? Pratigya Vajpayee, Informist Media: For external trade balances, is demand curtailment a consideration? Shaktikanta Das: We have given the numbers. We always keep in mind the objective of growth. The aspect of growth is always kept in mind. Dr. Patra, do you supplement anything on this? Dr. Michael D. Patra: Are you referring to the slowing down of imports? Pratigya Vajpayee, Informist Media: I am talking about the direction of net exports. Dr. Michael D. Patra: When monetary policy is withdrawing accommodation, it obviously wants to modulate aggregate demand to align with supply and that affects all categories including imports. But India's imports have a structural character. There are many parts of imports which are essential by nature, like crude petroleum, we don’t produce that. So, there are intermediates and machinery, which we have to import, just to grow. Also keep in mind the fact that if you want to grow faster than today's rate, you have to run a little higher CAD than in 2021-22. CAD in 2021-22 was 1.0 per cent of GDP. Now, if you want to step up the growth, you have to run a little higher CAD. There are aspects of demand which cannot be reduced by monetary policy in respect of imports, but as the Governor pointed out, we are not to be worried because we have buffers and as the growth rate changes the size of the current account, which is viable, also changes. Pratigya Vajpayee, Informist Media: Also, did you consider the 50 basis points constraint? Dr. Michael D. Patra: We consider every part of that, 50, 25, not acting at all, acting more than that and finally after much deliberation, choose that. Yogesh Dayal: Thank you, Sirs. With this, we come to the end of the press conference of this calendar year, the last one this year. I would want to thank the top management of RBI for being here and patiently answering all your questions and of course all the media friends having made it. Thank you so much and wish you a Happy New Year in advance. Thank you.

Chairman Governing Board, NIBSCOM as well as other Governing Board Members, NIBSCOM; Director, NIBSCOM and Faculty Members of NIBSCOM; Eminent bankers, ladies and gentlemen. Good afternoon. 1. Thank you for inviting me to the Golden Jubilee celebration of this premier institution. Over the last 50 years the National Institute for Banking Studies and Corporate Management (NIBSCOM) has provided exemplary service to the banking industry by training several generations of bankers in operational and management aspects relating to banking and finance. I am given to understand that since inception, there have been around 2 lakh participants in its training programmes. Having started my banking career with Punjab National Bank, one of the sponsor banks of NIBSCOM, I am specially delighted to be here amongst you. 2. In addition to various statutory and regulatory requirements, banking also has certain time-honoured banking conventions and practices. These practical concepts are best understood by practitioners and therefore best taught by them too. Moreover, unlike other professions such as medical, legal or accounting where there are specific academic courses, bankers come from a wide variety of academic backgrounds and learn their craft on the job. Therefore, industry promoted capacity building institutions like NIBSCOM play a crucial role in developing and enhancing the skills of bankers. Apart from sharing mutual experiences, this collaboration also helps in optimizing training costs. 3. Recognising the importance of capacity building, the Reserve Bank has catalysed the establishment of several institutions, both for upskilling of its own staff as well as of the industry. These include Reserve Bank Staff College, College of Agricultural Banking (CAB), Indira Gandhi Institute of Development Research (IGIDR), Institute for Development and Research in Banking Technology (IDRBT), National Institute of Bank Management (NIBM), Indian Institute of Bank Management (IIBM), Centre for Advanced Financial Research and Learning (CAFRAL), RBI Academy and more recently College of Supervisors. 4. Today, I would like to talk to you about the learnings from the challenges faced by financial sector in the last decade, the emerging challenges and the importance of capacity building in this context. A decade of challenges 5. The last decade has been exceptionally challenging for banks and financial institutions in India. In December 2011, the Financial Stability Report first highlighted the rising NPA levels. Subsequently, Central Repository of Information on Large Credits (CRILC), introduced in 2013 and AQR in 2015 revealed the scale of NPA problem. As the banking sector was working towards remedying the situation, the IL&FS default in 2018, revealed cracks in the liquidity management of NBFCs. This was followed by a spate of problematic episodes like DHFL, Punjab & Maharashtra Co-operative Bank, Yes Bank, LVB and ultimately the Covid-19 pandemic. 6. The Covid-19 pandemic is a watershed event of our generation for the widespread devastation of life and livelihood that it caused. It still haunts the global economy in several ways. There are very few parallels of a shock like COVID-19 in history, which left policymakers with no template to navigate through the crisis. 7. Before I continue, I would like to express my gratitude and appreciation for the bankers and RBI staff for their dedicated service during the pandemic. Even at the risk to their lives, bankers ensured that branches remain open and functional. Teams in the RBI and its regulated entities ensured availability of critical support infrastructure for payment settlement systems, ATMs, internet/ mobile banking, dealing with cyber security risks, address the customer grievances, etc. so that banking services continued uninterrupted. 8. As you all know, RBI’s monetary policy mandate is to maintain price stability while keeping in mind the objective of growth. In response to the COVID-19 pandemic, the Monetary Policy Committee prioritised growth adopting an accommodative stance necessary to revive and sustain growth on a durable basis and mitigate the impact of COVID-19 on the economy. The RBI implemented a slew of measures, both conventional and unconventional, to address the pandemic-induced dislocations and constraints. 9. In terms of conventional measures, the policy repo rate was reduced significantly. Further, system-level liquidity was also enhanced through large-scale open market purchase operations and a one percentage point reduction in the cash reserve ratio. Unconventional measures such as long-term repo operations (LTRO), targeted long-term repo operations (LTRO) and special open market operations (Operation Twist) were also conducted to support growth. Most importantly, the liquidity was closely monitored and to avoid falling into a liquidity trap, all the RBI liquidity measures came with sunset clauses. 10. The dislocations in everyday activity and access to finance brought to the fore solvency concerns across individuals, small and large businesses, and raised fears of impending asset quality stress among banks and financial institutions. The RBI responded with a volley of regulatory measures that included a loan moratorium, resolution frameworks 1.0 and 2.0 to facilitate restructuring of viable but distressed loans, etc. RBI also deployed its macro-prudential toolkit using various counter-cyclical measures. Like liquidity, even here the RBI followed a calibrated approach with sunset clauses. For instance, the COVID resolution packages set out parameters to ensure that viable borrowers are benefited, and the dispensations are available only for a finite window. Meanwhile, banks were advised to raise capital and restrictions were placed on dividend payments in early days itself so as to conserve the capital of banks and improve their risk absorbing capacity. 11. Even before onset of the pandemic, RBI had used innovative ways in resolving distressed institutions without requiring infusion of tax-payer money, while safeguarding depositor interest. Instead of applying traditional template of merger of a weak bank with a strong domestic bank or Government bailing out a bank, innovative approaches were adopted. In the case of Yes Bank, a group of banks came together to infuse capital to revive the bank. In the case of Punjab and Maharashtra Co-operative Bank a market-based resolution through the expression of interest route was used. For, Lakshmi Vilas Bank, a foreign bank, albeit through wholly owned subsidiary2 route, was allowed to acquire the operations. 12. Issues relating to governance, assurance and supervision were at the root cause of many of the problems. However, I believe that all stakeholders of financial sector, including Government, regulators and regulated entities have dealt with the challenges of last decade in a collaborative, calibrated and innovative manner. Overall, the financial sector and Reserve Bank have learnt and grown from these experiences - strengthening the institutional architecture, the regulatory framework as well as the financial system. 13. On the supervisory front several initiatives have been taken with the overarching vision of being able to provide a sound forward looking assessment of material risks. Improving offsite capabilities and making supervision more system and process driven. Illustratively, banks are required to have automated system-based asset classification with limited exceptions and tighter controls over such exceptions. 14. In October this year, RBI released Daksh, a web-based end-to-end workflow application that will inter-alia facilitate better monitoring of compliance by supervised entities. Offsite being data dependent, measures have been taken to strengthen the quality of data inputs. An endeavour is also being made to increase the use of advanced analytics, artificial intelligence and machine learning to assess material idiosyncratic and systemic risks so that risks can be proactively identified and mitigated. Use of such techniques opens up a range of possibilities especially in monitoring and analysing unstructured data such as board notes, complaints, analyst reports, news, social media, etc. to provide leads on emerging supervisory concerns. 15. While we are strengthening offsite with greater use of Sup-tech, the human element and onsite has not been forgotten. The College of Supervisors has devised a bouquet of programs that caters to capacity building at all levels from foundation course for new recruits to refresher programmes for supervisors. Further, a conscious attempt has been made to increase the two-way interactions with management of banks and financial institutions as well as statutory auditors to understand each other’s perspective and gain an insight into various concerns. 16. These efforts are bearing fruit. Today, I am happy to note that the Indian banking sector is strong, stable and resilient poised to support economic growth. Emerging Issues 17. While we have managed to restore our financial system to health, it is not the time to rest, as challenges remain. Having discussed the challenges of the last decade, I would like to discuss three emerging issues, namely, (i) the risks spill over from global events, (ii) the paradigm shift in banking driven by technology and (iii) potential use of data. A. Spill-over risks from global events 18. Events such as the Russia-Ukraine conflict reiterate the view that in today’s inter-connected globalised economy, no one is insulated from seemingly isolated events in a distant land. India does not have many trade linkages or dependence upon Ukraine. However, we are bearing the second order inflationary effects through various transmission channels and overall global slow down. 19. The Indian economy is emerging as one of the fastest growing economies and a bright spot in the global economy which is staring at recession. As per the IMF’s latest World Economic Outlook3 report, this is the weakest growth profile since 2001 except for the great recession and the acute phase of the COVID-19 pandemic. Consequently, there is nervousness in global financial markets with potential consequences for the real economy and financial stability. 20. Indian banks and financial institutions should strengthen their risk management capacities to monitor ongoing global events, quickly recognise their potential impact and proactively to mitigate and insulate themselves from any adverse consequences. B. Technology 21. Technology is revolutionising the financial services industry and bringing a disruptive paradigm shift in the delivery of banking services. With the entry of technology companies, banking services are being bundled onto platforms and delivered through mobiles. Consumers have the convenience of accessing financial products across the entire spectrum of banking, capital markets, insurance and pension as well as non-financial products directly through their mobile phones. Very often this results in a blurring of the regulatory perimeter and jurisdiction boundaries. 22. It is not as if the financial services sector has been lagging behind in adopting new technologies. Products like mobile banking applications, retail electronic fund transfers, UPI, Aadhaar e-KYC, Bharat Bill Payment System, Scan & Pay, Digital Pre-paid Instruments, etc. have transformed traditional branch banking. From once being restricted by the banking hours, the customer today is offered a digital-mobile-anywhere-anytime banking experience. However, the pace of technological changes is so rapid that banks will have to continuously innovate to keep up. 23. While this technology revolution has certainly enhanced the efficiency of financial entities and resulted in significant improvement in doing business with banks, it has also posed new challenges. Several concerns emanate from the mushrooming of unregulated digital lending apps, cyrpto-currencies, cyber-attacks, etc. 24. Banks should view technology as an enabler to facilitate seamless customer service and harness it for the benefit of their customers. Let me share a recent example. Availing credit in rural and semi-urban areas can be very time-consuming since it is largely a paper-based process entailing cumbersome documentation with multiple visits to the branch by the applicant. Earlier this year, RBI in consultation with RBI Innovation Hub launched a pilot project on KCC loans to address these challenges through digitalisation of agri-finance. Through automation of various processes, access to digital land records, satellite images and API integration, the project envisages a paper-less and hassle-free process that will facilitate disbursements of loans without requiring to visit the branch. The pilot, presently running in select districts of Madhya Pradesh and Tamil Nadu, is already showing a substantial reduction in turn-around time and cost. 25. In order to take advantage of the technology revolution, there are three things that banks must do from a capacity building perspective: Firstly, banks and financial institutions should be ready to scale up their investments in technology. In many cases, legacy core banking systems designed in the pre-mobile app era may not be amenable to swift changes in product design, computational capabilities, API integration, etc. Secondly, to build capacity, banks and financial institutions should foster continuous innovation. This is crucial in today’s technology led dynamic environment. The financial sector will have to anticipate and prepare for potential future requirements. Thirdly, banks and financial institutions must collaborate to leverage technology and derive synergistic benefits for optimising costs, maximising revenues and enhancing customer experience. However, while doing so they should ensure data privacy and protection as well as addressing consumer grievances and protecting them from unfair practices. C. Data 26. It is being said that data is the new oil. Like crude oil, raw data may not be valuable in itself. However, when consolidated and connected with other data and analysed, it can give meaningful insights. The financial sector by the inherent nature of its business has large repositories of customer and transaction data. 27. This presents itself with several exciting opportunities with applications across the spectrum of banking functions as well as facilitating better business strategies, fine tuning risk management and offer banking services with enhanced customer experience. Collaborating and sharing data, subject to privacy considerations, magnifies the benefits exponentially. Indeed, the possibilities are endless. Apart from commercial considerations, there are positive implications for development too. For instance, data analytics can be used to do away with collateral and documentation requirements which can help credit reach the financially excluded. 28. Many banks and financial institutions are already taking initiatives in big data analytics. However, to fully exploit and harness the data, building capacities in technology, analytical abilities and most importantly human resources is required. Human resources – a significant determinant 29. In addition to technology, the main differentiator for success is the quality human resources. With a dynamic and rapidly changing environment, the skill gap is widening. To address this, banks and financial institutions have to attract, train and retain talent. Further, there is a greater need for employees to be flexible, agile, open to new technologies and proactively pick up new skills to remain useful. Consequently, upskilling and reskilling of human resources is a sine qua non to face the emerging challenges. This is where capacity building will play a major role in the financial sector. 30. Capacity building is a wide overarching concept covering human resource development, organisational development and legal framework development. The objective is to bring about efficiency and effectiveness by improving the system’s ability to deliver and perform at the optimum level. 31. Training is often the easiest and first place to start in capacity building. However, in order to derive its benefits and optimize its costs, careful consideration should be given to all the elements of capacity building. For instance, an officer may be trained in advanced quantitative techniques but if adequate resources in the form of computing infrastructure and access to data are not provided, the training is rendered ineffective from a capacity building perspective. Therefore, for training to translate into capacity, banks and financial institution must ensure that the training is demand driven based on a training needs analysis and is gainfully utilised post the training. 32. Apart from training, the financial services sector must invest in research and be open to accepting and developing out-of-box ideas. Banks and financial institutions can consider in-house data science labs or sandbox environments to test out innovative ideas. Indeed, instead of banks following technology companies, the situation could be reversed with banks leading with novel technology solutions. 33. As I conclude, I would summarise my key message. The Indian financial sector is coming out of a challenging decade which saw several crises including the pandemic. Fortunately, it has learnt and grown from these experiences and is fairly sound and much more resilient today. However, there are existing and emerging challenges on the horizon which the sector needs to adequately prepare for. The solution lies in the effective management of human resources and upskilling and reskilling them to face these challenges that lie ahead. Bank managements should shun short term considerations and invest in their people realising that the long-term benefits of capacity building far outweigh the immediate costs. Institutions such as NIBSCOM can go a long way in optimally delivering on the training components of capacity building in areas such as risk management, technology and data analytics, while also nurturing research and innovation. I would encourage NIBSCOM to take up innovative research topics. 34. With this I wish NIBSCOM and its faculty all success in their future endeavours and many glorious years ahead. Thank you once again for inviting me to be a part of your Golden Jubilee Celebrations. 1 Speech delivered by Shri M K Jain, Deputy Governor, Reserve Bank of India on December 2, 2022 at the Golden Jubilee celebration function of the National Institute for Banking Studies and Corporate Management (NIBSCOM) in Noida. 2 As a locally incorporated bank, the wholly owned subsidiaries (WOS) are given near national treatment with some exceptions. Refer RBI Press Release November 6, 2013. 3 ‘ World Economic Outlook, October 2022: Countering the Cost-of-Living Crisis’, International Monetary Fund, October 11, 2022. https://www.imf.org/en/Publications/WEO/Issues/2022/10/11/world-economic-outlook-october-2022 (last accessed on November 30, 2022).

Reserve Bank of India, Dehradun (hereinafter referred to as the ‘Bank’) invites e-Tender for Annual Maintenance Contract for Management and Housekeeping (including catering) of Bank’s Visiting Officers’ Flats (VOF) and Holiday Home located at Dehradun and Mussoorie respectively. For more details, please visit “TENDERS” link on our website https://www.rbi.org.in. The tendering would be done through the e- Tendering portal of MSTC Ltd (https://www.mstcecommerce.com/eprochome/rbi/). All interested agencies must register themselves with MSTC Ltd. through the above-mentioned website to participate in the tendering process. Agencies intending to apply may refer tender document for the eligibility criteria and will have to satisfy the Bank by furnishing documentary evidence in support of their possessing required eligibility and in the event of their failure to do so, the Bank reserves the right to reject their candidature. The Bank is not bound to accept the lowest tender and reserves the right to accept either in full or in part any tender. The Bank also reserves the right to reject all the tenders without assigning any reason thereof. Any amendments / corrigendum to the tender, if any, issued in future will only be notified on the RBI Website and MSTC Website as given above and will not be published in the newspaper. Regional Director Reserve Bank of India, Dehradun

The Regional Director, Reserve Bank of India, Thiruvananthapuram (RBI Thiruvananthapuram) invites competitive bids from reputed, experienced, licensed labour contractors for supply of sufficient number of adult and able-bodied labourers / mazdoors for handling coin bags/currency note boxes - for loading, unloading, weighing, carting and stacking of coins bags and currency note boxes and for miscellaneous incidental items of work in the premises of the RBI Thiruvananthapuram or at Railway Stations / Airports or any other premises identified by RBI Thiruvananthapuram. The period of contract will initially be for one-year from April 01, 2023 to March 31, 2024 and may be extended by RBI Thiruvananthapuram at its option for a further period of two years, by one year at a time, with or without any variation in the terms and conditions, subject to satisfactory performance of contractual terms and conditions. Regional Director Reserve Bank of India Thiruvananthapuram Date: February 22, 2023

E-Tender for providing Trained Firefighting staff for providing fire safety services at RBI Office Premises located in Jaipur for an initial period of one year (01st April 2023 to 31st March 2024) Reserve Bank of India, Jaipur invites e-tender for “providing Trained Firefighting staff for providing fire safety services at RBI Office Premises located in Jaipur” for an initial period of one year (01st April 2023 to 31st March, 2024) The e-tendering shall be done through the e-tendering portal of MSTC Ltd (http://mstcecommerce.com/eprochome/rbi). All eligible and interested companies/agencies/firms must register themselves with MSTC Ltd through the above-mentioned website to participate in the e-tendering process. E-Tender No. RBI/Jaipur/Estate/457/22-23/ET/716 2. Intending tenderers shall pay a sum of ₹92,000/- (Ninety-Two Thousand Only) as earnest money to be paid through NEFT/ Net banking only to Reserve Bank of India, Jaipur. 3. Applicants intending to apply will have to satisfy the Bank by furnishing documentary evidence in support of their possessing required eligibility and in the event of their failure to do so, the Bank reserves the right to reject their bids. E-tenders without EMD will not be accepted under any circumstances. 4. The Bank is not bound to accept the lowest tender and reserves the right to accept either in full or in part any tender. The Bank also reserves the right to reject all the tenders without assigning any reason thereof. 5. Any amendments / corrigendum to the tender, if any, issued in future will only be notified on the RBI Website and MSTC Website as given above and will not be published in the newspaper. Regional Director Reserve Bank of India Jaipur

Regional Director, Reserve Bank of India, Kanpur invites e-Tenders for Disposal of shredded note briquettes. The e-Tender along with the detailed tender notice is available at MSTC site https://www.mstcecommerce.com/eprochome/rbi and the website of the Bank at https://www.rbi.org.in (Tender no RBI/Kanpur/Issue/32/22-23/ET/713). 2. All interested bidders must register themselves with MSTC Limited through the above referred website to participate in the e-Tendering process. 3. The estimated cost of the work is ₹48 lakh per annum (approx.), however the actual amount may vary. 4. The schedule for the e-Tendering process is as under: e-Tender Schedule Schedule Date e-Tender view date at MSTC website February 21, 2023 (Tuesday, 15:00 hrs) Pre-Bid Meeting (if required) February 27, 2023 (Monday, 15:00 hrs) Date of starting of e-Tender February 21, 2023 (Tuesday, 15:00 hrs) Last date of submission of e-Tender March 15, 2023 (Wednesday, 15:00 hrs) Date of opening Part-I March 15, 2023 (Wednesday, 16:00 hrs) 5. The Part-II i.e. price bid will be opened in respect of only those contractors/bidders who satisfy all criteria stipulated in Part-I on the same day or at later date as intimated by the Bank. The Bank reserves the right to accept or reject any or all e-Tenders without assigning any reasons therefor. Note: All the tenderers may please note that any amendments / corrigendum to the e-Tender, if issued in future, will only be notified on the RBI and MSTC Websites as given above and will not be published in any newspaper. Regional Director Reserve Bank of India, Kanpur Date: February 21, 2023

CorrigendumThe Pre-bid meeting for the captioned tender was held on February 20, 2023 at 3:00 PM at RBI Chandigarh. The meeting was chaired by Shri Manish Kumar, Deputy General Manager and attended by following officials from IT Cell and prospective bidders. a) The following Bank’s officials and representative of prospective bidder were present during the pre-bid meeting: Sr No. Name and Designation of RBI Officials 1. Shri Manish Kumar, Deputy General Manager 2. Shri Ashwani Saini, Assistant General Manager 3. Shri Niraj Kumar Roy, Assistant Manager b) Prospective Bidders present during the pre-bid meeting: Sr No Prospective Bidders Representative Name 1. M/s Vserv Infosystems Private Limited Shri Rajeev Shori 2. Shri Ashwani Saini, Assistant General Manager welcomed all participants and requested the participants to raise the queries, if any. The queries raised by the representatives of prospective bidders were replied by Shri Manish Kumar, Deputy General Manager and Shri Ashwani Saini, AGM.3. The queries raised by the prospective bidders during the meeting along with our clarifications and comments are given below. Queries and Clarifications/Comments Sr. No Query Clarification/ Comments 1. RBI is requested to exemption the EMD for MSME as per Govt. notification Applicable as per the tender conditions. 2. RBI is requested to amend Performance Bank Guarantee (PBG) for 3% as per Govt. Circular no. No. F.9/4/2020-PPD Applicable as per the tender conditions. 3. As a standard practice PM should be asked quarterly, also cleaning activity must be excluded from the scope. Vendor has to provide services as per the scope of work prescribed in the Tender Document 4. RBI is requested to exclude the OEM declared consumable (toner cartridge / drum, fuser films / teflon sleeves, printer heads etc) from CAMC or can be replaced with extra cost other than AMC. Also, requested to exclude the Burnt out or fire cases and physical damage etc. from scope of maintenace Vendor has to provide services as per the scope of work prescribed in the Tender Document, however, replacement of cartridges would be excluded from the scope of work. 5. What would be the leave policy for the deplyed RE's. Request Bank to allow leaves as per standard govt rules, Also Clarify the no. of RE variation frequency and notice period. We request to fix the rate card for backup personel as it is very difficult to ascertain the factor cost as we have no data regarding leaves. 1. Variation would be random, depending upon the Bank's requirement. 2. Bank would provide intimation at least one day in advance. 3. The Bank would make the payment for regular engineer (even if substitute provided). The vendor has to take care of the payment of remuneration to the substitute personnel. However, penalty will be applied if no substitute provided, as per penalty clause. 6. The overall penalty should be capped up to maximum 5% of the billed/annum value of contract. Applicable as per the tender conditions. 7. RBI is requested to excludes data recovery, even the OEM cannot take data recovery responsibility. Applicable as per the tender conditions. 8. Is ESI or medical insurance of the deployed engineer sufficient. Applicable as per the tender conditions. 9. Exit / Termination clause should be from either party. Termination clause will be as follows and have been included in section 12.1 of tender document. Vendor can terminate the contract at any point of time by giving a three months' notice to the Bank. Bank, at its discretion, may also terminate the contract by giving one month notice to the vendor. 10. In price bid format, there is ambiguity regarding the taxes/GST. Is it inclusive or exclusive on all three parts as mentioned at Sr. No. 1,2,3. Taxes will be extra, as applicable.

Minutes of Pre-bid MeetingTender No.: RBI/CHANDIGARH/DIT/19/22-23/ET/636 Addition of New Clause Section 12.1 – Termination Clause Vendor can terminate the contract at any point of time by giving a three months' notice to the Bank. Bank, at its discretion, may also terminate the contract by giving one month notice to the vendor. Note: The above corrigendum shall form the part of bid document / Agreement. The corrigendum will also be uploaded on MSTC portal. Rest of the Terms and conditions and specifications of the tender document shall continue to remain same. The above addition is issued for the information of all the intending bidders. The submission of bid by the firm shall be construed to be in conformity to the tender document and additions given above. Regional Director

Pre-bid meeting on Tender for Rate Contract for supply and delivery of Stationery items to RBI was held on February 17, 2023 at 11.00 AM in the Training Room, Ground Floor, Main Building, RBI, Fort Mumbai. The meeting was attended by the following: Bank’s Representative Participants 1. Shri K. Dhamodhiran, AGM, CES 1. M/s Paras Stationery & Xerox 2. Shri M G V Quadros, Manager, CES 2. M/s Apple Stationers & Xerox 3. Shri Anoop Singh, AM, CES 3. M/s Mital Stationery & Xerox, 4. M/s Shital Parshuramkar, Assistant, CES 4. M/s Delux Stationery & Xerox   5. M/s Ketaki Prakashan Ltd.   6. M/s Vasant Traders 2. The queries raised by the vendors in the pre-bid meeting and the clarifications/comments given by Bank’s official are tabulated as under: Sr. No. Queries raised by participants Clarification/Comments of the Bank 1. Due to Covid-19 the business of every vendor is affected, so is it possible to reduce the turnover amount? The turnover requirement has already been reduced to 2/3rd of previous year. 2. For printing items vendors require at least 7 days delivery time after proofing. All stationery items including printing items should be delivered within 7 days from the date of purchase order. 3. Whether the EMD amount is exempted for Micro and Small Enterprises (MSE) Applicants registered as Micro and Small Enterprise (MSE) are exempted from deposit of EMD. 4. It is suggested that RBI procure the stationery items on bulk basis and point of delivery should be centralized department wise for cost effective purpose. Normally, bulk orders are placed on quarterly basis with the respective vendor by the concerned CO department of RBI and delivery of the said items has to be made to the respective CO department by the vendor. In an exceptional case only, stray purchase order is placed with the vendor. For MRO it is centralized at Stationery Section. 5. Penalty of 50% cut in charges payable for delay in supply is on higher side. It is as per the Bank’s policy and the same is been practised. 6. If specific brand of stationery items are not available in the market then what is the course of action for vendors? In such cases, with the approval of the Bank the equivalent brands should be supplied by the vendors The Regional DirectorReserve Bank of IndiaMumbai Regional OfficeShahid Bhagat Singh Marg, FortMumbai 400-001

E-Tender No.- (RBI/Belapur/Issue/34/22-23/ET/722) Reserve Bank of India, Sector-10, Plot No.3, H. H. Nirmaladevi Marg, CBD Belapur, Navi Mumbai – 400614 invites bids through e-tendering process from eligible bidders for the following service: i) Disposal of Shredded currency note briquettes/shreds, Issue Department, RBI Belapur Contractors intending to bid for the same shall submit bids online as per the Tender Document, which may be downloaded from RBI website and MSTC website from the URLs https://rbi.org.in and http://www.mstcecommerce.com/eprochome/RBI The tender documents shall not be issued by any other means under any circumstances whatsoever. Corrigenda or clarifications, if any, shall be hosted on the above-mentioned website only. RBI reserves the right to accept or reject any tender. Last date for submission of Tenders: March 14, 2023 at 15:00 hrs Chief General Manager RBI, Belapur, Navi Mumbai

As per the schedule of the tender, Pre-Bid meeting for the captioned tender was held on February 13, 2023 at 15:30 in Issue Department, RBI Lucknow. The following staff members of RBI and representatives of prospective firms/tenderers were present during the pre-bid meeting: S. No. Name of RBI Officers i. Ms. Ankita Singh (Manager) ii. Shri Yogesh Kumar Mahour (AM) iii Shri Aditya Shah, (Assistant) S. No. Name of Prospective Firm Name of Representative i. SAA Enterprises Shri Asad & Shri Shameem Khan 2. The discussions held with the representatives of the firm and clarifications given thereof are mentioned as under: Sr. No. Questions raised by agencies’ representatives Clarification given by the Bank i. What is the place of location where labourers will be engaged? Labourers will be engaged at mainly RBI, Lucknow Main Office Building and at Charbagh Railway Station, Lucknow etc. as per the exigency. ii. What is the time period before which requisition for labourers will be raised for undertaking work? Bidders may please be guided by the relevant instructions as mentioned at para (i) & (iii) of the Section II i.e. “Scope of Work” under the subhead of “Duties of the contractor” of the tender document.

Expression of interest for Selection of a panel of vendors/consultants for preparing eLearning and eCertification courses in supervision/regulation/financial stability related areas Clarification for Queries received from interested Parties Sr. No Queries Clarification 1 What is the expected duration/length of the eLearning Courses and for eCertification Courses Please refer to Chapter 3 (Broad Scope of Work and key deliverables) of the EOI Document 2 Are any live classes expected to be a part of the eLearning or eCertification courses? The eLearning and eCertfication courses are not expected to have live classes 3 Whether the Courses will be hosted on the LMS platform of the vendor or on that of RBI? College of Supervisors has its own Learning Management System on which the courses shall be hosted. 4 What will be the mode of delivery of the content? The content should be primarily Audio-Visual accompanied by reading material, quizzes, and other methods of effective delivery

EOI for Selection of India-based vendors/consultants for preparing real life case studies in supervision/regulation/financial stability related areas Clarification for Queries received from interested Parties Sr. No Queries Clarification 1 Apart from the given indicative topics, can we expect more topics The topics are indicative in nature, changes or additions may be made. 2 Do you have a set pattern for the case studies? We do not prescribe any set pattern, however, the learning outcomes from them are expected to be focused on creating an understanding of (1) the quantitative/technical matters of the case study subject and, (2) the qualitative/administrative-management matters confronting (a) the issues and (b) the people. These case studies are expected to be designed for deliberation and experiential learning.

E-tender No. RBI/Kochi/Estate/416/22-23/ET/648 With regard to the captioned tender, it is informed that no bidder has attended the pre-bid meeting at 15:00 hrs of February 16, 2023. 2. All other terms & conditions of the tender remain unchanged. Chief General Manager Reserve Bank of India, Kochi 20 February 2023

Reserve Bank of India, Jammu invites e-tender for ‘Empanelment of vendors and award of work for Annual Maintenance Contract (AMC) and Facility Management Service (FMS) of Computer Hardware, Software and Peripherals at Reserve Bank of India, Jammu. The e-tendering shall be done through the e-tendering portal of MSTC Ltd. (https://www.mstcecommerce.com/eprochome/rbi). All eligible and interested companies / agencies / firms must register themselves with MSTC Ltd. through the above-mentioned website to participate in the e-tendering process. The Schedule of e-tender is as follows: a) Name of Work i) Empanelment of the vendors for a period of three years) for “Annual Maintenance Contract (AMC)/Facility Management Service (FMS) for Computers Hardware, Software and Peripherals” at Reserve Bank of India, Jammu. and ii) Annual Maintenance Contract (AMC) / Facility Management Service (FMS) for Computer Hardware, Software and Peripherals located at various properties of the Bank. b) e-Tender No RBI/Jammu/DIT/21/22-23/ET/717 c) Mode of Tender E-Tendering System (Part I – Technical Bid and Part II – Financial Bid) through https://www.mstcecommerce.com/eprochome/rbi/buyer_login.jsp d) Date of NIT available to parties to download February 21, 2023 e) Pre-Bid meeting The Pre-bid meeting will be held in offline mode at Multipurpose Hall, RBI Jammu at 11:00 Hrs on March 03, 2023. f) Estimated Cost of Tender (Inclusive of GST) Rs. 12,40,000/- (One Year) g) Earnest Money Deposit Rs. 24,800/- by NEFT in favour of Reserve Bank of India, Rail Head Complex, Trikuta Nagar, Jammu - 180012 Details for NEFT Beneficiary Name: RESERVE BANK OF INDIA Beneficiary Ac No: 8714295 IFSC -- RBIS0JMPA01 (5th and 10th being zero) Please mention UTR transaction details while applying in the given format Annex – IX h) Last date of submission of EMD March 14, 2023 at 12:00 Hrs i) Transaction Fees To be paid through MSTC payment Gateway / NEFT/ RTGS in favour of MSTC Limited or as advised by M/s MSTC Ltd. (Transaction fee will NOT be charged by RBI) j) Date of Starting of e-Tender for submission of on-line Technical and Financial Bid at https://www.mstcecommerce.com/eprochome/rbi February 21, 2023 at 11:00 Hrs k) Date of closing of online e- Tender for submission of Technical Bid and Financial Bid March 14, 2023 at 15:00 Hrs l) Date & time of opening of Part-I (Techno-Commercial Bid) March 14, 2023 at 16:00 Hrs m Date & time of opening of Part-II (Price Bid) At a later date after opening of Part I as intimated by the Bank in respect of only those contractors/bidders who satisfy all criteria stipulated in Part-I n) Address of Communication Reserve Bank of India, Rail Head Complex, Trikuta Nagar, Jammu - 180012, Jammu and Kashmir Tel: 0191-2474883 E-mail : ditjammu@rbi.org.in Regional Director Reserve Bank of India Jammu Date: 21.02.2023

e-Tender no. RBI/Mumbai/HRMD/97/22-23/ET/707 Consequent to the response of the chemists/ druggists/ stockists to the advertisement issued by Reserve Bank of India in leading local newspapers on November 06, 2020 for “Empanelment of chemists/ druggists/ stockists for Supply of Drugs and Medicines to RBI Dispensaries”, a panel of nine chemists viz., K Enterprises, Span Enterprises, Satyam Medical Stores, Keps Pharma, Apollo Pharmacies Limited, Mitrasen Medicare, Doshi Hospicare, Deep Enterprises and Pharma Karrier who had fulfilled the eligibility criteria and agreed to all the terms and conditions specified in the Request for Empanelment document was prepared for the period April 2021- March 2024. 2. We now invite quotations from the Empanelled chemists/ druggists/ stockists for award of Annual Contract (AC) for supply of medicines to Bank’s Dispensaries located in Mumbai and Navi Mumbai for the financial year April 2023 – March 2024. 3. The tendering would be done through the e-Tendering portal of MSTC Ltd. (https://mstcecommerce.com/eprochome/rbi). The Empanelled chemists/druggists/stockists must register themselves with MSTC Ltd. through the above-mentioned website to participate in the tendering process. Tender document may be downloaded from RBI website and MSTC website from the following URL: www.rbi.org.in & https://www.mstcecommerce.com/eprochome/rbi. The last date for submission of e-tender on MSTC portal is (www.mstcecommerce.com) is March 14, 2023 at 11:00 AM. 4. In the event of any date indicated above being declared a holiday, the next working day shall become operative for the respective purpose mentioned herein. Any amendment(s) / corrigendum / clarifications with respect to this tender shall be uploaded on the RBI website / MSTC portal only. The tenderer should regularly check the above website / MSTC portal for any amendment / corrigendum / on the above website. The Bank reserves the right to reject any or all the tenders without assigning any reason thereof. Regional Director for Maharashtra

e-Tender No. RBI/Ranchi/HRMD/69/22-23/ET/581 With reference to the e-tender dated January 24, 2023, it is advised that the last date of submission of the e-tender as well as the last date of submission of EMD in the MSTC portal has been extended from February 20, 2023 till 2:00 PM to February 27, 2023 till 02:00 PM. 2. Now the Part-I of the e-tender will be opened on February 27, 2023 at 03:00 PM. 3. Other conditions in the tender remain unchanged. Deputy General Manager (O-I-C) Reserve Bank of India Ranchi February 20, 2023

A. Certificates of Authorisation issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 for Setting up and Operating Payment System in India The Payment and Settlement Systems Act, 2007 along with the Board for Regulation and Supervision of Payment and Settlement Systems Regulations, 2008 and the Payment and Settlement Systems Regulations, 2008 have come into effect from 12th August 2008. The list of 'Payment System Operators’ authorised by the Reserve Bank of India to set up and operate in India under the Payment and Settlement Systems Act, 2007 is as under: Sr. No. Name of the Authorised Entity Address of the Principal Office Payment System Authorised Date of issue of Authorisation & Validity Period (given in brackets) Financial Market Infrastructure 1. The Clearing Corporation of India Ltd. The Managing Director,Clearing Corporation of India Ltd.,CCIL Bhavan, S K Bole Road,Dadar (West), Mumbai -400 028 i. Securities segment covering Govt Securities; ii. Forex Settlement Segment comprising of sub-segments a. USD-INR segment, b. CLS segment – Continuous Linked Settlement (Settlement of Cross Currency Deals), c. Forex Forward segment; iii. Rupee Derivatives Segment-Rupee denominated trades in IRS & FRA. 11.02.2009 -do- -do- -do- -do- Retail Payments Organisation 2. National Payments Corporation of India (NPCI)* The Chief Executive Officer, National Payments Corporation of India, 1001A, B wing, 10th Floor, The Capital, Bandra – Kurla Complex, Bandra (East), Mumbai–400 051. i. National Financial Switch (NFS) ii. Immediate Payment Service (IMPS) iii. Affiliation of RuPay Cards (debit cards/ prepaid cards) issued by banks and co-branded credit cards issued by non-banking financial companies (NBFCs) or any other entity approved by the RBI. iv. National Automatic Clearing House (NACH) v. Aadhar Enabled Payments System (AEPS) vi. Operation of Cheque Truncation System vii. Unified Payments Interface viii. National Electronic Toll Collection (NETC) 15.10.2009 12.10.2010 12.07.2012 23.05.2013 11.01.2011 21.09.2011 24.08.2016 11.02.2019 *All approvals related to international activities given to NPCI have been transferred to NPCI International Payments Limited (NIPL), a wholly owned subsidiary of NPCI, with effect from August 10, 2020 Cards Payment Networks 3. American Express Banking Corp., USA The Chief Executive Officer, American Express Banking Corp., 200 Vesey Street MC 01-39-12 New York, NY USA 10285. Affiliation of credit cards/debit cards/prepaid cards issued by banks and co-branded credit cards issued by non-banking financial companies (NBFCs) or any other entity approved by the Reserve Bank of India. 31.03.2009 4. Diners Club International Ltd., USA The Chief Executive Officer, Diners Club International Ltd. 2500, Lake Cook Road River woods, Illinois (IL) – 60015, U S A. Affiliation of credit card issued by banks or any other entity approved by the Reserve Bank of India. 30.06.2010 5. MasterCard Asia/ Pacific Pte. Ltd., Singapore (Earlier MasterCard International Incorporated, USA was performing this activity) The Chief Executive Officer, Mastercard Asia/ Pacific Pte. Ltd, 3 Fraser Street, DUO Tower, #17-21/28, Singapore 189352 Affiliation of credit cards/ debit cards/ prepaid cards issued by banks and co-branded credit cards issued by non-banking financial companies (NBFCs) or any other entity approved by the Reserve Bank of India. 01.12.2014   National Payments Corporation of India The Chief Executive Officer, National Payments Corporation of India, 1001A, B wing, 10th Floor, The Capital, Bandra-Kurla Complex, Bandra (East) Mumbai–400 051. Affiliation of RuPay Cards (debit cards/ prepaid cards) issued by banks and co-branded credit cards issued by non-banking financial companies (NBFCs) or any other entity approved by the RBI. 12.07.2012 6. Visa Worldwide Pte. Limited, Singapore (Earlier Visa International Service Association, USA was performing this activity) The President Visa Worldwide Pte. Limited, 71, Robinson Road, #08-01, Singapore (068895). Affiliation of credit cards/ debit cards/ prepaid cards issued by banks and co-branded credit cards issued by non-banking financial companies (NBFCs) or any other entity approved by the RBI. 01.04.2010 Cross border Money Transfer – in-bound only 7. Bahrain Financing Company, BSC (C) The Director Bahrain Financing Company, BSC (c), Bab AL Bahrain Building, Bab AL Bahrain Avenue, Government Road, P.O Box 243 Manama, Bahrain Money Transfer Service (MTSS)– cross border in-bound service (customer to customer) known as “EzRemit” 30.09.2009 8. Continental Exchange Solutions Inc, USA The Chief Executive Officer, 6565, Knott Avenue, Buena Park, California, 90620- USA MTSS- cross border in-bound service (customer to customer) known as “Ria Money Transfer” 28.04.2014 (Valid upto 31.03.2024) 9. Fast Encash Money Transfer Services Ltd. The Chief Executive Officer, 144, High Street North, London E6 2HT MTSS- cross border in-bound service (customer to customer) 03.04.2017 (Valid upto 31.03.2023) 10. Mastercard Transaction Services (Canada) Inc.(formerly Transfast Inc., Canada and Global Foreign Exchange Inc.) The President, Transfast Inc., 600-121, Bloor ST East, Toronto, ON, Canada, M4W 3M5 MTSS- cross border in-bound service (customer to customer) known as “Transfast” 30.09.2009 (Valid upto 30.09.2023) 11. MoneyGram Payment Systems Inc, USA. The President & Chief Executive Officer, 1550 Utica Avenue South, Minneapolis, Minnesota 55416, U.S.A. MTSS- cross border in-bound service (customer to customer) known as “MoneyGram or MoneyGram International” 25.05.2009 (Valid upto 31.05.2023) 12. Muthoot Finserve USA Inc. {formerly Royal Exchange (USA) Inc.} The President, Muthoot Finserve USA Inc. 1155, Green Street Iselin, NJ 08830 U.S.A. MTSS- cross border in-bound service (customer to customer) 30.09.2009 13. UAE Exchange Centre LLC, UAE The Managing Director & CEO, UAE Exchange Centre LLC, P.O No. 13304, Building of Nassar Bin Abdul Latiff Naïf Street Deira, Dubai, U A E MTSS- cross border in-bound service (customer to customer) known as “Xpress Money” 30.09.2009 14. Wall Street Exchange Centre LLC, UAE The Group Managing Director, Wall Street Exchange Centre LLC, Central Office Building, AI Sabhkha, Naif Road P.O Box 3014, Deira, Dubai UAE. MTSS- cross border in-bound service (customer to customer) known as “Instant Cash” 30.09.2009 15. Western Union Financial Services Incorporated, USA The Chief Executive Officer, Western Union Financial Services Incorporated, 7001E, Belleview Avenue, Englewood, CO 80237. MTSS- cross border in-bound service (customer to customer) known as “Western Union or WU” 31.03.2009 ATM Networks 16. Bank of India The Chairman & Managing Director Bank of India, Star House C-5 ‘G’ Block, Bandra Kurla Complex, Bandra (East), Mumbai- 400 051. ‘BANCS’ – ATM network 12.08.2009 17. Euronet Services India Private Limited The Managing Director, Euronet Services India Private Limited, 2nd Floor, Marwah House, Krishanlal Marwah Marg, Andheri (E) Mumbai – 400 072. CASHNET – ATM Network 25.05.2009   National Payments Corporation of India The Chief Executive Officer, National Payments Corporation of India, C-9, 8th Floor, RBI Premises, Bandra – Kurla Complex, Bandra East, Mumbai–400 051. National Financial Switch (NFS) 15.10.2009 18. Punjab National Bank The Chairman & Managing Director, Punjab National Bank, 7, Bhikaji Cama Place New Delhi 110049. Bilateral ATM sharing arrangement with Everest Bank of Nepal 05.04.2010 19. State Bank of India The Chairman, State Bank of India, Corporate Centre,1st Floor, ‘C’ Wing, Mittal Towers, Nariman Point, Mumbai 400 021. State Bank Group ATM network 12.08.2009 Prepaid Payment Instruments 20. Amazon Pay (India) Private Limited (formerly Amazon Online Distribution Services Private Limited) The Chief Executive Officer, Amazon Pay (India) Private Limited, #26/1, Brigade Gateway, World Trade Centre, 8th floor, Dr. Rajkumar Road, Malleswaram (West), Bangalore – 560 055 Prepaid Payment Instruments known as “Amazon Pay balance: Money” 22.03.2017 21. Appnit Technologies Private Limited The Chief Executive Officer, Appnit Technologies Private Limited, 403, 4th Floor, Tower A, Logix Technova Centre, Sector 32, Noida, Uttar Pradesh – 201 301 Prepaid Payment Instruments 22.03.2017 (Valid Upto 31.03.2023) 22. Bajaj Finance Limited The Chief Executive Officer, Bajaj Finance Limited, Mumbai Pune Road, Akurdi, Pune – 411 035 Prepaid Payment Instruments 04.05.2021 23. Balancehero India Private Limited The Chief Executive Officer, Balancehero India Private Limited, Office No – 121, 2nd Floor, Sector 44, Gurugram, Haryana - 122003 Prepaid Payment Instruments 18.07.2017 24. Delhi Metro Rail Corporation Limited The Chief Executive Officer, Delhi Metro Rail Corporation Limited, Metro Bhawan, Fire Brigade Lane, Barakhamba Road, New Delhi - 110001 Prepaid Payment Instruments for Mass Transit Systems 20.02.2017 25. E-Meditek Global Private Limited The Chief Executive Officer, E-Meditek Global Private Limited, 205A, 2nd Floor, NDM-2, Plot No. D1,2,3 Netaji Subhash Place District Center, Pitam Pura, Delhi - 110034 Prepaid Payment Instruments 07.10.2016 (Valid upto 31.12.2023) 26. Eroute Technologies Private Limited The Chief Executive Officer, Eroute Technologies Private Limited, Technopolis IT Hub, 8th Floor, C56 A/12, Sector 62, Noida, Gautam Buddha Nagar, Uttar Pradesh – 201 301 Prepaid Payment Instruments 10.05.2021   Euronet Services India Private Limited I-Think Techno Campus, Office No. 1, 8th Floor, Wing A, Off Pokhran Road No. 2, Behind TCS, Eastern Express Highway, Thane (W) - 400607 Prepaid Payment Instruments 03.08.2021 27. Hip Bar Private Limited The Chief Executive Officer, Hip Bar Private Limited, #7, Kamaraj Avenue, 1st Street, Adyar Chennai - 600020 Prepaid Payment Instruments 22.08.2016 28. India Transact Services Limited The Chief Executive Officer, India Transact Services Limited, 14th Floor, Tower 3, Indiabulls Finance Center, S. B. Marg Elphinstone Road (W) Mumbai 400 013 Prepaid Payment Instruments known as ‘Ongo’ 30.05.2014 29. Ebix Payment Services Private Limited (formerly Itz Cash Card Private Limited) The Chief Executive Officer, Ebix Payment Services Private Limited 2nd Floor, Manek Plaza, Kalina CST Road, Kolekalyan, Santacruz (East), Mumbai – 400 098 Prepaid Payment Instruments known as ‘EBIXCASH’ 25.08.2009 (Valid upto 30.11.2025) 30. LivQuik Technology (India) Private Limited The Chief Executive Officer, LivQuik Technology (India) Private Limited, Unit No.206, B Wing, Supreme Business Park, Hiranandani Garden, Powai, Mumbai 400076 Prepaid Payment Instruments 08.08.2016 (Valid upto 30.09.2023) 31. Manappuram Finance Limited The Chief Executive Officer, Manappuram Finance Limited, Manappuram House, P.O. Valappad, Thrissur, Kerala - 680 567 Prepaid Payment Instruments 08.02.2017 (Valid upto 31.03.2023) 32. Mpurse Services Pvt. Ltd. The Chief Executive Officer, Mpurse Services Pvt. Ltd., Plot-2A, 1st Floor, KH No. 294, Kehar Singh State, Saidulajb Village, Lane No.2, Saket, New Delhi-110030 Prepaid Payment Instruments known as ‘mpurse wallet’ 30.06.2014 (Valid upto 30.06.2023) 33. Nucleus Software Exports Limited The Chief Executive Officer, Nucleus Software Exports Limited, 33-35, Thyagraj Market, New Delhi – 110 003 Prepaid Payment Instruments known as ‘PaySe’ 22.03.2017 (Valid upto 31.03.2023) 34. Obopay Mobile Technology India Private Limited The Chief Executive Officer, Obopay Mobile Technology India Private Limited, No. 201, 2nd Floor, Touchdown, No. 1&2, HAL Industrial Area, Bangalore - 560037 Prepaid Payment Instruments 17.10.2017 (Valid up to 31.12.2023) 35. Ola Financial Services Pvt. Ltd. (formerly ZipCash Card Services Private Limited) The Director, Ola Financial Services Pvt. Ltd., 323, Corporate Centre, Nirmal Lifestyle, LBS Marg, Mulund (West) Mumbai 400 080 Prepaid Payment Instruments known as 'Ola Money Wallet' 29.10.2009 (Valid upto 31.10.2023) 36. One Mobikwik Systems Limited The Chief Executive Officer, One Mobikwik Systems Limited, 5th Floor, Huda City Centre Metro Station, Sector 29, Gurgaon, Haryana - 120001 Prepaid Payment Instruments known as ‘Mobikwik Wallet’ 18.07.2013 (Valid upto 30.09.2023) 37. Paul Merchants Finance Private Limited (formerly Paul Fincap Pvt. Ltd.) The Chief Executive Officer, Paul Merchants Finance Private Limited, Ground Floor SCO 829-830, Sector 22-A, Chandigarh 160 022 Prepaid Payment Instruments known as ‘Paul Pay’ 04.06.2015 (Valid upto 30.06.2025) 38. PayU Payments Private Limited The Chief Executive Officer,PayU Payments Private Limited, 801, 8th Floor, Empressa Building, 2nd Road, Khar West, Mumbai - 400052 Prepaid Payment Instruments 25.07.2016 39. Pay Point India Network Private Limited The Chief Executive Officer, Pay Point India Network Private Limited, 108-109, B-Wing, Everest Grande, Opp. Ahura Centre, Mahakali Road, Andheri (East), Mumbai 400093 Prepaid Payment Instruments known as 'Pay Pointz' 03.04.2012 40. Phonepe Private Limited (formerly FX Mart Pvt. Ltd.) The Chief Executive Officer, Phonepe Private Limited, Unit No.001, Ground Floor, Boston House, Suren Road, Off. Andheri-Kurla Road, Andheri (East) Mumbai, 400 093 Prepaid Payment Instruments known as ‘PhonePe’ 25.08.2014 (Valid upto 31.08.2023) 41. Pine Labs Private Limited The Chief Executive Officer, Unitech Infospace, 2nd and 3rd Floor, Building – 2, Plot No. B2, Sector – 62, Noida – 201301 Prepaid Payment Instruments 10.03.2017 42. Premium eBusiness Ventures Private Limited The Chief Executive Officer, Premium eBusiness Ventures Private Limited, 42, Navketan Industrial Estate, Mahakali Caves Road, Andheri (East) Mumbai 400 093 Prepaid Payment Instruments 18.12.2014 43. QwikCilver Solutions Pvt. Ltd. The Chief Executive Officer, QwikCilver Solutions Pvt. Ltd., No.111, 1st Floor, ‘Brigade Manae Court’, Industrial Layout, Koramangala, 5th Block, Bangalore – 560 095 Prepaid Payment Instruments, Co-branded gift card known as ‘Issued by QwikCilver’ 06.08.2013 (Valid upto 30.09.2023) 44. RapiPay Fintech Private Limited (formerly Virgosoft IT Services Private Limited) The Chief Executive Officer, RapiPay Fintech Pvt. Ltd., 2nd Floor, DLF Centre, Sansad Marg, New Delhi – 110001. Prepaid Payment Instruments 27.02.2017 (Valid upto 31.03.2023) 45. Razorpay Technologies Private Limited The Chief Executive Officer, Razorpay Technologies Private Limited, 1st Floor, SJR Cyber 22, Laskar Hosur Road, Adugodi, Bengaluru - 560030 Prepaid Payment Instruments 25.10.2021 46. Smart Payment Solutions Pvt. Ltd. The Chief Executive Officer, Smart Payment Solutions Pvt. Ltd. 138, 4th Floor, Udyog Vihar, Phase I, Gurgaon, Haryana - 122016. Prepaid Payment Instruments known as ‘Payworld Money’ 30.06.2010 47. Sodexo SVC India Pvt. Ltd. The Chief Executive Officer, Sodexo SVC India Pvt. Ltd., Nesco Complex, Gate No. 3, Indabrator Building, Western Express Highway Goregaon (East); Mumbai 400063. Prepaid Payment Instruments 25.08.2009 48. Spice Money Limited The Chief Executive Officer, Spice Money Limited, 19A & 19B, 4th Floor, Global Knowledge Park, Sector 125, Noida – 201301 Prepaid Payment Instruments 09.04.2015 (Valid up to 30.06.2023) 49. Transaction Analysts (India) Private Ltd. The Chief Executive Officer, Transaction Analysts (India) Private Limited, D No 4, Sathyam Arcade, 1st Floor, 1st Phase, 100 Feet Road, BTM Layout 2nd Stage, Bangalore 560 076 Prepaid Payment Instruments known as ‘Transaction Assured’ 07.03.2014 50. Transcorp International Limited The Chief Executive Officer, Transcorp International Limited, Plot No 3, HAF Pocket, Sector 18A, Phase II, Dwarka, New Delhi. Prepaid Payment Instruments 26.08.2016 51. Transerv Limited The Chief Executive Officer, Transerv Limited, 1002-B, 10th Floor, Tower 1, Indiabulls Finance Centre, Senapati Bapat Marg, Elphinstone Road (W), Mumbai – 400 013 Prepaid Payment Instruments known as ‘dhani pay’ 22.02.2016 52. Tri O Tech Solutions Private Ltd. The Chief Executive Officer, Tri O Tech Solutions Private Limited, 5th Floor, Punj Essen House, 17-18, Nehru Place, New Delhi - 110019 Prepaid Payment Instruments 18.01.2017 53. Unimoni Financial Services Limited (formerly UAE Exchange & Financial Services Ltd.) The Country Head- India, UAE Exchange & Financial Services Ltd., Third Floor, Airline Building Opp. Maharaja college Ground, M G Road, Kochi 682 011. Prepaid Payment Instruments m-wallet known as ‘Unimoni’ 29.10.2009 (Valid upto 31.10.2023) 54. Uniorbit Payment Solutions Limited (formerly Weizmann Impex Service Enterprise Limited) The Chief Executive Officer,Uniorbit Payment Solutions Limited, 214,Empire House (Basement) Dr D N Road,Ent A K Nayak Marg, Fort, Mumbai – 400 001 Prepaid Payment Instruments 11.12.2015 White Label ATM Operators 55. India1 Payments Limited (formerly BTI Payments Pvt. Ltd.) The Chief Executive Officer,India1 Payments Limited,Unit No. 801 to 810, 8th Floor, Tower “B”, Diamond District, #150, Old Airport Road, Bengaluru - 560008 Installation and operation of WLAs 12.02.2014 56. Hitachi Payment Services Pvt. Ltd. The Managing Director, Hitachi Payment Services Pvt. Ltd., 3rd Floor, Silver Metropolis, Jai Coach Compound, Western Express Highway, Goregaon East, Mumbai 400 063. Installation and operation of WLAs known as ‘Money Spot’ 25.11.2013 57. Tata Communications Payment Solutions Ltd. The Chief Executive Officer; Tata Communications Payment Solutions Limited; Plot No. C- 21, B Block, Bandra Complex, Bandra East, Mumbai- 400098. Installation and operation of WLAs 03.05.2013 (Valid upto 30.06.2023) 58. Vakrangee Limited The Managing Director, Vakrangee Limited, Vakrangee House, Plot No 93, Road No. 16, M.I.D.C Marol, Andheri (East) Mumbai-400 093 Installation and operation of WLAs 23.01.2014 (Valid upto 31.03.2024) Instant Money Transfer 59. Boson Systems Private Limited (formerly Empays Payment Systems India Pvt. Ltd.) The Chief Executive Officer Boson Systems Private Limited 216 The Empire Business Centre, Empire Business Park, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013 Instant Money Transfer known as ‘IMT’ 17.11.2014 (Valid upto 15.11.2024) Trade Receivables Discounting System (TReDS) 60. A.TREDS Limited The Managing Director and Chief Executive Officer, 11th Floor, A3, Ashar IT Park, Road No 16Z, Wagle Industrial Estate, Thane(W)- 400 604 TReDS system known as “INVOICEMART” 29.06.2017 (Valid up to 30.06.2023) 61. Mynd Solutions Private Limited The Director Mynd Solutions Private Limited –F-83, East of Kailash, New Delhi – 110 065 TReDS system known as M1xchange 20.03.2017 (valid upto 31.03.2023) 62. Receivables Exchange of India Limited (RXIL) The Managing Director & Chief Executive Officer,Receivables Exchange of India Limited (RXIL),701-702, 7th Floor, Supremus – E Wing, I-Think Techno Campus, Kanjurmarg East, Mumbai - 400042 TReDS system known as RXIL 17.05.2017 Note: The entity was granted approval to commence operations w.e.f 01.12.2016 Bharat Bill Payment System (BBPS) Bharat Bill Payment Central Unit (BBPCU) 63. NPCI Bharat BillPay Limited The Chief Executive Officer,NPCI Bharat BillPay Limited,1001A, B wing, 10th Floor,The Capital, Bandra – Kurla Complex,Bandra (East), Mumbai–400 051. Bharat Bill Payment Central Unit (BBPCU) 26.07.2017 Bharat Bill Payment Operating Units (BBPOUs) 64. Infibeam Avenues Limited (formerly Avenues India Private Limited) The Chief Executive Officer Infibeam Avenues Limited 28th Floor, GIFT Two Building, Block No.56, Road-5C, Zone-5 Gandhinagar – 382355. Bharat Bill Payment Operating Unit (BBPOU) under Bharat Bill Payment System (BBPS) 17.10.2017 65. CSC e – Governance Services India Ltd The Chief Executive Officer CSC e – Governance Services India Ltd Electronics Niketan, 4th Floor, Ministry of Electronics & Information Technology 6 CGO Complex, Lodhi Road New Delhi - 110003 Bharat Bill Payment Operating Unit (BBPOU) under Bharat Bill Payment System (BBPS) 21.09.2017   Euronet Services India Private Limited The Chief Executive Officer Euronet Services India Private Limited I-Think Techno Campus, Office No 1 8th Floor, Wing A, Off Pokhran Road No. 2 Behind TCS, Eastern Express Highway Thane (W) - 400607 Bharat Bill Payment Operating Unit (BBPOU) under Bharat Bill Payment System (BBPS) 05.09.2017 66. IndiaIdeas.com Limited The Chief Executive Officer IndiaIdeas.com Limited 801, Supreme Chambers 17/18 Shah Industrial Estate Off Veera Desai Road Andheri (W), Mumbai 400 053 Bharat Bill Payment Operating Unit (BBPOU) under Bharat Bill Payment System (BBPS) 02.08.2017 (Valid up to 30.09.2023)   Ebix Payment Services Private Limited(formerly Itz Cash Card Limited) The Chief Executive Officer, Ebix Payment Services Private Limited 2nd Floor, Manek Plaza, Kalina CST Road, Kolekalyan, Santacruz (East), Mumbai – 400 098 Bharat Bill Payment Operating Unit (BBPOU) under Bharat Bill Payment System (BBPS) 28.08.2017 (Valid up to 30.09.2023)   Spice Money Limited The Chief Executive Officer, Spice Money Limited, 19A & 19B,4th Floor, Global Knowledge Park,Sector 125, Noida – 201301 Bharat Bill Payment Operating Unit (BBPOU) under Bharat Bill Payment System (BBPS) 22.08.2017 67. Worldline ePayments India Private Limited (formerly Ingenico ePayments India Private Limited and TechProcess Payment Services Limited) The Chief Executive Officer, Worldline ePayments India Private Limited, 501, Jollyboard Towers, iThink Techno Campus, Kanjurmarg (East) Mumbai 400042 Bharat Bill Payment Operating Unit (BBPOU) under Bharat Bill Payment System (BBPS) 16.08.2017   One Mobikwik Systems Private Limited The Chief Executive Officer, One Mobikwik Systems Private Limited, D-2, 303, Parsvnath Exotica, Golf Course Road, Sector 53, Gurgaon, Haryana - 122002 Bharat Bill Payment Operating Unit (BBPOU) under Bharat Bill Payment System (BBPS) 24.01.2019 (Valid up to 31.03.2024)   PayU Payments Private Limited The Chief Executive Officer, PayU Payments Private Limited, 801, 8th Floor, Empressa Building, 2nd Road, Khar (West), Mumbai - 400052 Bharat Bill Payment Operating Unit (BBPOU) under Bharat Bill Payment System (BBPS) 17.06.2022   PhonePe Private Limited The Chief Executive Office, PhonePe Private Limited, 101 Boston House, Suren Road, Near Guru Nanak Petrol Pump, Andheri (East), Mumbai - 400093 Bharat Bill Payment Operating Unit (BBPOU) under Bharat Bill Payment System (BBPS) 03.03.2022 B. Certificates of Authorisation Revoked by the Reserve Bank of India in exercise of the powers conferred under the Payment and Settlement Systems Act, 2007 Sr. No. Name of the Entity Address of the Principal Office Payment System operated Dates of Revocation (Date of Authorisation given in brackets) 1. Kaizen Automation Private Limited The Director, Kaizen Automation Private Limited, B-601-602, Citi Point, Andheri Kurla Road, J. B. Nagar, Near Kohi-noor Continental Andheri (East), Mumbai - 400 059 Issuance of Prepaid cards known as 'Go-Mumbai' Revocation order issued on 05.04.2011 (25.08.2009) 2. Card Pro Solutions Pvt. Ltd. The Chief Executive Officer,Card Pro Solutions Pvt. Ltd., 135, A to Z Industrial Estate, G K Marg, Lower Parel, Mumbai 400 013 Prepaid Payment Instruments Revocation order issued on 12.02.2020 3. AGS Transact Technologies Ltd. The Chairman & Managing Director, AGS Transact Technologies Ltd., 601-602, B-wing, Trade World Kamala City, Senapati Bapat Marg Lower Parel (W) Mumbai 400 013 Installation and operation of WLAs Revocation order issued on 04.03.2021 4. RiddiSiddhi Bullions Limited The Chief Executive Officer, RiddiSiddhi Bullions Limited - Bullion House, 115, TambaKatta, Opp. Dagina Bazar, Pydhonie, Mumbai- 400003 Installation and operation of WLAs Revocation order issued on 04.03.2021 5. GI Technology Private Limited The Director,GI Technology Private Limited,No. C-9, 2nd Floor, Left Wing, Thiru Vika Industrial Estate, Guindy, Chennai - 600032 Prepaid Payment Instruments Card known as 'I Cash' Revocation order issued on 20.10.2022 C. Authorised entities whose Payment System operations have ceased Sr. No. Name of the Entity Address of the Principal Office Payment System operated Operations ceased from 1. Coinstar Money Transfer (Ireland) Limited, Ireland The Chief Executive Officer, Coinstar Money Transfer (Ireland) Limited, Suite 404, 22/23, Pembroke Street Dublin 2, Republic of Ireland. Money Transfer Service – cross border in-bound service (customer to customer) May 01, 2011 2. Done Card Utility Limited The Director, Done Card Utility Limited, 301, Linkway Estate, Near Chincholi Fire Station, New Link Road, Malad (West), Mumbai - 400064. Prepaid payment instruments known as 'Done Cards' November 01, 2013 3. OSS Payment Solutions Pvt. Ltd. The Chief Executive Officer, OSS Payment Solutions Pvt. Ltd.-103, 4th Floor, Aditya Industrial Estate, Behind Chincholi Fire Station, Near Evershine Mall, New Link Road, Malad (W) Mumbai 400 064. Prepaid Payment instruments January 01, 2014 4. SREI Infrastructure Finance Ltd. The Chief Executive Officer,SREI Infrastructure Finance Ltd.,Vishwakarma, 86C Topsia Road (South) Kolkata- 700046 Installation and operation of WLAs March 31, 2019 5. Flytech Aviation Limited The Chief Executive OfficerFlytech Aviation LimitedH.No 1-8-303/33, 3rd floorNagam towers, opp. NTR circlePolice lines, Minister Road,SecunderabadTelangana – 500 003 Prepaid Payment Instruments June 30, 2019 6. Y-Cash Software Solutions Private Limited The Chief Executive Officer,Y-Cash Software Solutions Private Limited,VGR Essor, 3rd Floor, No 1140,17th Cross, 7th Sector, H.S.R. Layout,Bangalore 560 102 Karnataka Prepaid Payment Instruments m-wallet known as ‘Y-Pay Cash’ September 30, 2019 7. My Mobile Payments Limited The Chief Executive Officer, My Mobile Payments Limited, MOM House, Plot No. 61, Ramchandra Lane, Kanchpada, Malad (West), Mumbai  400064 Maharashtra Prepaid Payment Instruments known as ‘MOM’ October 31, 2019 8. Aircel Smart Money Limited The Chief Executive Officer,Aircel Smart Money Limited,2nd and 5th Floor, Building No 10 A,DLF Cybercity, DLF Phase 2,Gurgaon, Haryana Prepaid Payment Instruments June 30, 2020 9. InCashMe Mobile Wallet Services Private Limited The Chief Executive Officer, InCashMe Mobile Wallet Services Private Limited, InCashMeTM House, 5/B Suhasnagar Society, Behind Income Tax Department, Ashram Road, Ahmedabad, Gujarat – 380 009 Prepaid Payment Instruments June 30, 2020 10. Eko India Financial Services Private Limited The Chief Executive Officer, Eko India Financial Services Pvt. Ltd., 3rd Floor, Phase II, Plot No 34, Institutional Area, Sector 44 Gurgaon 122 003. Prepaid Payment Instruments December 31, 2021 11. Muthoot Vehicle & Asset Finance Ltd. The Managing Director, Muthoot Vehicle & Asset Finance Ltd. 1st Floor, Cochin Dental Clinic Bldg. Market Road, Towards Kombara, Kochi 682 014 Prepaid Payment Instruments e-wallet known as ‘Muthoot Money’ and m-wallet known as ‘Muthoot wallet’ December 31, 2021 D. Entities whose Certificate of Authorisation to operate a Payment System have been cancelled on account of voluntary surrender by the entity Sr. No. Name of the Entity Address of the Principal Office Payment System operated Cancelled on Remarks 1. Federal Bank Ltd. Managing Director & CEO, Federal Bank Ltd. Corporate Office Federal Towers Post Box No. 103 Aluva – 68310, Kerala ATM sharing with co-operative banks licensed by Reserve Bank under the BR Act, 1949 (AACS) January 02, 2017 Nil 2. UTI Infrastructure Technology and Services Ltd. The Chief Executive Officer, UTI Tower, Plot No. 3, Sector 11, CBD Belapur, Navi Mumbai-400 614 Prepaid Payment Instruments known as National Common Mobility Card (NCMC) February 07, 2017 Nil 3. Citrus Payment Solutions Pvt. Ltd. The Chief Executive Officer, Citrus Payment solutions Pvt. Ltd., 302, Swati Building, North Avenue Road, Off Linking Road, Santa Cruz West, Mumbai 400 054 Prepaid Payment Instruments known as ‘Citrus Cash’ April 19, 2017 Nil 4. Beam Money Private Limited nee Suvidha Starnet Pvt. Ltd. The Chairman & Managing Director, Beam Money Private Limited, D-128-129, 402 Terrace Floor, Okhla Industrial Area, Phase-I, New Delhi -110 020. Prepaid payment instruments known as ‘Beam Money’ May 04, 2017 Nil 5. Atom Technologies Limited The Chief Executive Officer; Atom Technologies Limited, 4th Floor FT Towers, CTS 256 & 257, Suren Road, Chakala, Andheri (E), Mumbai -400093. Prepaid payment instruments known as ‘Atom Wallet’ and ‘Aquapay’ July 4, 2017 Nil 6. Buyindiaonline.com Inc., USA The Chief Executive Officer, Buyindiaonline.com Inc.,425, Market Street, 12th floor, San Francisco, CA, 94105, USA. MTSS - cross border in-bound service (customer to customer) July 31, 2017 Nil 7. PayMate India Pvt. Limited The Managing Director and CEO PayMate India Pvt. Limited,111, 1st Floor, A- Wing, Sundervilla,SV Road, Santacruz (W), Mumbai 400 054 Prepaid payment instruments known as ‘Paymate Wallet’ August 23, 2017 Nil 8. Bajaj Finance Limited The Chief Executive Officer, Bajaj Finance Limited, 4th Floor, Bajaj Finserv Corporate Office, Off. Pune-Ahmednagar Road, Viman Nagar, Pune - 411014 Prepaid Payment Instruments February 20, 2018 The entity reapplied and was granted authorisation for Issuance and Operation of PPIs on May 4, 2021 9. Freecharge Payment Technologies Private limited (previously Klickpay Payment Services Private Limited) The Chief Executive Officer,Freecharge Payment Technologies Private Limited,362-363, ASF Centre,Udyog Vihar Phase – IV, Sector - 18,Gurgaon – 122016, Haryana Prepaid Payment Instruments April 10, 2018 Nil 10. Yeldi Softcom Private Limited The Chief Executive Officer, Yeldi Softcom Private Limited, AJ-227 (Old No AJ-08), Shanthi Colony Main Road, Anna Nagar, Chennai - 600040 Prepaid Payment Instruments May 15, 2018 Nil 11. The Shamrao Vithal Co-operative Bank Ltd. The Chief Executive Officer;The Shamrao Vithal Co-operative Bank Ltd.;SVC Tower, Jawaharlal Nehru Road Vakola–Santacruz (East),Mumbai – 400 055. SVC Cache 24 Insta ATM Sharing Arrangement April 10, 2018 Nil 12. Tech Mahindra Limited (Earlier CanvasM Technologies Ltd. was performing this activity) The Chief Executive Officer, Tech Mahindra Limited, A- 20,Sector 60, Noida 201 301 Prepaid Payment Instruments (m-wallet) known as ‘MoboMoney’ August 28, 2018 Nil 13. Tata Tele NXTGEN Solutions Limited (earlier MMP Mobi Wallet Payment Systems Limited) The Chief Executive Officer,Tata Tele NXTGEN Solutions Ltd.,10th Floor, Jeevan Bharati, 124, Connaught Circus,New Delhi – 110001 Prepaid Payment Instruments known as ‘mRupee’ November 14, 2018  Nil 14. Pyro Networks Pvt. Ltd. The Chief Executive Officer,Pyro Telecommunications Ltd., 8-2-293/82,Plot No. 264/A-31, Road # 92, Jubilee Hills, Hyderabad-500033, Andhra Pradesh Prepaid Payment Instruments m-wallet known as ‘SpeedPay’ March 30, 2019 Nil 15. Supreme Securities Limited The Chief Executive Officer, Supreme Securities Limited, 3rd Floor, R.D.Chambers, 16/11, Arya Samaj Road, Karol Bagh, New Delhi Prepaid Payment Instruments August 02, 2019 Nil 16. Vodafone m-pesa Limited(Earlier Mobile Commerce Solutions Ltd. was performing this activity) The Chief Executive Officer, Vodafone m-pesa Limited, 10th Floor, Birla Centurion, Century Mills Compound, Pandurang Budhkar Marg, Worli Mumbai - 400030 Maharashtra Prepaid Payment Instruments known as ‘Vodafone M-pesa’ September 30, 2019 Nil 17. Delhi Integrated Multi- Modal Transit System Limited The Chief Executive Officer, Delhi Integrated Multi-Modal Transit System Limited, 1st floor, Maharana Pratap ISBT Building, Kashmere Gate, Delhi – 110 006 Prepaid Payment Instruments July 10, 2020 Customers or merchants having a valid claim, if any, on Delhi Integrated Multi-Modal Transit System Limited, as a PSO, can approach the company for settlement of their respective claims within three years from the date of this cancellation i.e. upto 10.07.2023 18. DigitSecure India Private Limited The Chief Executive Officer, DigitSecure India Private Limited, Plot No: 1303 and 1304, 4th Floor, Khanamet, Hitech City, Ayappa Society, Madhapur, Hyderabad - 500 081. Prepaid Payment Instruments e-wallet known as ‘HotRemit' September 30, 2020 Customers or merchants having a valid claim, if any, on DigitSecure India Private Limited, as a PSO, can approach the company for settlement of their respective claims within three years from the date of this cancellation i.e. upto 30.09.2023 19. Kedia Infotech Ltd. The Chief Executive Officer Kedia Infotech Ltd. 518, 5th Floor Swapnalok Complex S D Road Secunderabad 500 003 Prepaid Payment Instruments known as ‘Etran Wallet’ September 30, 2020 Customers or merchants having a valid claim, if any, on Kedia Infotech Ltd., as a PSO, can approach the company for settlement of their respective claims within three years from the date of this cancellation i.e. upto 30.09.2023 20. Muthoot Finance Ltd. The Managing Director, Muthoot Finance Ltd. 2nd Floor, Muthoot Chambers, Banerji Road, Kochi-682018, Kerala Installation and operation of WLAs September 30, 2020 Nil 21. Oxigen Services (India) Private Limited The Chief Executive Officer, Oxigen Services (India) Private Limited, 36, 2nd Floor, Gola Market, Behind Golcha Cinema, Daryaganj, New Delhi, Central Delhi, DL 110002 IN Prepaid Payment Instruments known as ‘Oxigen Wallets’ December 31, 2020 Customers or merchants having a valid claim, if any, on Oxigen Services (India) Private Limited, as a PSO, can approach the company for settlement of their respective claims within three years from the date of this cancellation i.e.upto 31.12.2023 22. Edenred (India) Private Limited – nee Accor Services Pvt. Ltd. The Managing Director & Chief Executive Officer, Edenred (India) Private Ltd;Kalpataru Prime, Unit 3 & 4, Level 4, Road No. 16, Wagale Industrial Estate, Thane (West) – 400 604 Meal and gift paper vouchers, meal and cafeteria cards, gift cards. The products are mainly under the brand name ‘Ticket/Ticket Restaurant/Ticket Compliments’ April 30, 2021 Customers or merchants having a valid claim, if any, on Edenred (India) Private Limited, as a PSO, can approach the company for settlement of their respective claims within three years from the date of this cancellation i.e.upto 30.04.2024 E. Entities whose Certificate of Authorisation to operate a Payment System have been cancelled as per regulatory requirement Sr. No. Name of the Entity Address of the Principal Office Payment System operated Cancelled on Remarks 1. Airtel M Commerce Services Ltd. The Chief Executive Officer; Airtel M Commerce Services Ltd. Airtel Center, Plot No. 16, 6th Floor, Udyog Vihar, Phase -4, Gurgaon Haryana – 122001. Prepaid payment instruments known as Stored Value Card Wallet (SCW) ‘Airtel Money’ 8.3.2017 The entity has converted to Airtel Payments Bank Limited (APBL) which has been permitted to continue the PPI business. 2. One97 Communications Ltd. The Chief Executive Officer, One97 Communications Ltd., B- 121, Sector 5, Noida, 201 301 Uttar Pradesh Mobile based Prepaid Payment Instruments m- Wallet known as ‘Paytm wallet’ 25.07.2017 The entity has transferred its PPI business (Paytm wallet) to Paytm Payments Bank Limited (PPBL) as permitted by RBI. 3. Fino Paytech Ltd. (Earlier Alpha Payment Services India Pvt. Ltd.(erstwhile Nokia Mobile Payment Services India Pvt. Ltd.) was performing this activity) The Chief Executive Officer,FINO Paytech Ltd., Shree Sawan Knowledge Park, 2nd Floor, D 507 TTC Indl. Area MIDC Turbhe, Navi Mumbai Prepaid Payment Instruments 06.10.2017 The entity has transferred its PPI business to the FINO Payments Bank Ltd as permitted by RBI. 4. Idea Mobile Commerce Services Ltd. The Chief Executive officer,Idea Mobile Commerce Services Ltd.,5th Floor, “Windsor”, Off C.S.T. Road,Kalina, Santacruz (East), Mumbai 400 098 Prepaid Payment Instruments known as ‘Idea Money’ 13.05.2018 The entity has transferred its PPI business to the Aditya Birla Idea Payments Bank Ltd as permitted by RBI. 5. Reliance Payment Solution Limited The Chief Executive Officer, Reliance Payment Solution Limited, 5th Floor, Court House, Lokmanya Tilak Marg, Dhobi Talao, Mumbai 400 002 Prepaid Payment Instruments known as ‘Jio Money’ 31.05.2018 The entity has transferred its PPI business to the Jio Payments Bank Ltd as permitted by RBI. F. Entities whose Certificate of Authorisation to operate a Payment System is under process of cancellation as per regulatory requirement/Voluntary Surrender Sr. No. Name of the Entity Address of the Principal Office Payment System operated Remarks 1. Oxigen Services (India) Pvt Ltd The Chief Executive Officer, Oxigen Services (India) Private Limited, 36, 2nd Floor, Gola Market, Behind Golcha Cinema, Daryaganj, New Delhi, Central Delhi, DL 110002 IN Bharat Bill Payment Operating Unit (BBPOU) under Bharat Bill Payment System (BBPS) 12.10.2017(Valid up to 31.12.2022)

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Today, the Reserve Bank released the results of January 2023 round of its bi-monthly Consumer Confidence Survey (CCS)1. The survey obtains current perceptions (vis-à-vis a year ago) and one year ahead expectations on general economic situation, employment scenario, overall price situation and own income and spending across 19 major cities. The latest round of the survey was conducted during January 02 to 11, 2023, covering 6,047 respondents. Highlights: Consumer confidence improved further both for the current period as well as for the year ahead; the current situation index (CSI)2 continued on its recovery path for the ninth survey round since the historic low recorded in mid-2021 and increased by 1.3 points in January 2023 on the back of improved sentiments on general economic situation and household income (Chart 1 and Tables 1 and 5). One year ahead outlook, as reflected by the future expectations index (FEI), also rose by 1.3 points to its two-year high on the back of improved optimism on general economic situation, employment and income over the next one year (Chart 1). Consumers’ sentiment on current expenses witnessed some moderation but their expectations on overall spending improved marginally for both essential and non-essential items (Tables 6, 7 and 8). Note: Please see the excel file for time series data.3 Table 1: Perceptions and Expectations on the General Economic Situation (Percentage responses) Survey Round Current Perception One year ahead Expectation Improved Remained Same Worsened Net Response Will Improve Will Remain Same Will Worsen Net Response Jan-22 17.8 15.6 66.7 -48.9 40.8 16.7 42.5 -1.7 Mar-22 21.7 16.2 62.2 -40.5 49.2 15.2 35.7 13.5 May-22 22.5 14.9 62.7 -40.2 45.4 15.3 39.4 6.0 Jul-22 21.6 15.4 63.0 -41.5 46.4 14.9 38.8 7.6 Sep-22 26.2 14.6 59.2 -33.0 46.5 15.4 38.1 8.4 Nov-22 28.0 16.3 55.7 -27.8 48.0 15.6 36.4 11.6 Jan-23 28.3 19.6 52.1 -23.7 50.2 16.6 33.2 17.0 Table 2: Perceptions and Expectations on Employment (Percentage responses) Survey Round Current Perception One year ahead Expectation Improved Remained Same Worsened Net Response Will Improve Will Remain Same Will Worsen Net Response Jan-22 17.4 17.2 65.4 -48.0 41.4 19.3 39.3 2.2 Mar-22 23.6 17.0 59.5 -35.9 52.9 17.0 30.2 22.7 May-22 27.3 17.8 54.9 -27.6 51.3 16.7 32.1 19.2 Jul-22 28.1 17.3 54.6 -26.5 50.7 17.2 32.0 18.7 Sep-22 28.4 17.6 54.0 -25.7 49.4 17.3 33.3 16.1 Nov-22 31.8 18.6 49.6 -17.8 51.5 18.3 30.3 21.2 Jan-23 30.0 20.1 49.9 -19.9 51.8 18.0 30.2 21.6 Table 3: Perceptions and Expectations on Price Level (Percentage responses) Survey Round Current Perception One year ahead Expectation Increased Remained Same Decreased Net Response Will Increase Will Remain Same Will Decrease Net Response Jan-22 93.4 5.4 1.2 -92.3 78.1 12.4 9.5 -68.6 Mar-22 93.3 5.6 1.2 -92.1 79.1 10.4 10.5 -68.6 May-22 95.4 4.1 0.5 -94.9 80.0 11.1 8.9 -71.1 Jul-22 95.2 4.0 0.9 -94.3 80.4 10.9 8.8 -71.6 Sep-22 94.6 4.3 1.1 -93.6 79.9 11.0 9.1 -70.8 Nov-22 94.9 4.1 1.0 -93.9 82.2 9.3 8.6 -73.6 Jan-23 93.6 5.0 1.3 -92.3 83.0 10.1 7.0 -76.1 Table 4: Perceptions and Expectations on Rate of Change in Price Level (Inflation)* (Percentage responses) Survey Round Current Perception One year ahead Expectation Increased Remained Same Decreased Net Response Will Increase Will Remain Same Will Decrease Net Response Jan-22 88.1 8.7 3.2 -84.9 81.7 13.5 4.7 -77.0 Mar-22 88.5 9.3 2.2 -86.2 83.9 12.4 3.7 -80.2 May-22 91.3 7.0 1.7 -89.7 81.7 14.2 4.1 -77.6 Jul-22 88.5 8.9 2.6 -85.9 81.8 13.6 4.6 -77.3 Sep-22 89.6 7.8 2.6 -87.0 80.6 14.5 4.9 -75.7 Nov-22 87.5 9.2 3.3 -84.2 82.9 13.2 3.9 -79.1 Jan-23 86.5 10.5 3.0 -83.6 80.3 15.5 4.1 -76.2 *Applicable only for those respondents who felt price has increased/price will increase. Table 5: Perceptions and Expectations on Income (Percentage responses) Survey Round Current Perception One year ahead Expectation Increased Remained Same Decreased Net Response Will Increase Will Remain Same Will Decrease Net Response Jan-22 12.3 38.0 49.7 -37.4 43.2 42.5 14.3 29.0 Mar-22 16.0 42.1 42.0 -26.0 52.9 38.5 8.6 44.3 May-22 17.6 46.0 36.4 -18.9 52.4 39.2 8.4 44.0 Jul-22 18.2 46.0 35.9 -17.7 51.6 40.0 8.4 43.3 Sep-22 20.2 45.5 34.4 -14.2 51.3 39.8 8.9 42.4 Nov-22 20.9 46.1 32.9 -12.0 52.5 39.9 7.6 44.9 Jan-23 21.4 49.0 29.6 -8.3 54.5 38.7 6.9 47.6 Table 6: Perceptions and Expectations on Spending (Percentage responses) Survey Round Current Perception One year ahead Expectation Increased Remained Same Decreased Net Response Will Increase Will Remain Same Will Decrease Net Response Jan-22 61.7 24.9 13.3 48.4 64.4 26.9 8.7 55.8 Mar-22 64.1 24.8 11.1 53.0 70.4 23.2 6.4 64.1 May-22 69.4 22.1 8.5 60.9 72.5 21.7 5.8 66.7 Jul-22 72.6 21.1 6.3 66.3 73.0 22.4 4.6 68.3 Sep-22 75.9 17.5 6.6 69.2 74.2 20.7 5.2 69.0 Nov-22 74.9 19.2 5.9 69.0 75.0 20.3 4.7 70.2 Jan-23 73.9 20.6 5.5 68.4 75.5 19.8 4.7 70.8 Table 7: Perceptions and Expectations on Spending- Essential Items (Percentage responses) Survey Round Current Perception One year ahead Expectation Increased Remained Same Decreased Net Response Will Increase Will Remain Same Will Decrease Net Response Jan-22 75.7 15.6 8.7 67.1 73.5 20.1 6.4 67.0 Mar-22 76.6 15.7 7.7 68.9 78.6 16.2 5.2 73.5 May-22 81.7 12.8 5.5 76.2 79.9 15.7 4.4 75.4 Jul-22 82.0 13.7 4.3 77.7 80.0 16.5 3.6 76.4 Sep-22 85.2 10.7 4.1 81.1 80.9 15.4 3.7 77.3 Nov-22 84.7 11.6 3.7 81.0 81.1 15.4 3.5 77.7 Jan-23 84.1 12.3 3.6 80.5 81.3 15.2 3.5 77.8 Table 8: Perceptions and Expectations on Spending- Non-Essential Items (Percentage responses) Survey Round Current Perception One year ahead Expectation Increased Remained Same Decreased Net Response Will Increase Will Remain Same Will Decrease Net Response Jan-22 14.3 31.1 54.5 -40.2 23.6 38.6 37.8 -14.2 Mar-22 16.1 31.6 52.2 -36.1 28.9 36.7 34.4 -5.5 May-22 16.6 34.1 49.3 -32.7 27.5 38.4 34.1 -6.6 Jul-22 18.7 35.9 45.5 -26.8 29.3 38.5 32.2 -2.9 Sep-22 20.9 32.5 46.7 -25.8 29.5 37.6 33.0 -3.6 Nov-22 22.4 33.8 43.8 -21.4 32.8 35.1 32.2 0.6 Jan-23 22.1 35.2 42.8 -20.7 31.9 38.4 29.8 2.1 1 The survey results reflect the respondents’ views, which are not necessarily shared by the Reserve Bank. Results of the previous survey round were released on the Bank’s website on December 07, 2022. 2CSI and FEI are compiled on the basis of net responses on the economic situation, income, spending, employment and the price level for the current period (as compared with one year ago) and a year ahead, respectively. CSI and FEI = 100 + Average of Net Responses of the above parameters. 3Unit-level data for previous rounds of the survey are available on the Database on Indian Economy (DBIE) portal of the Bank (web link: https://dbie.rbi.org.in/DBIE/dbie.rbi?site=unitLevelData) 4 ‘Net response’ is the difference between the percentage of respondents reporting optimism and those reporting pessimism. It ranges between -100 and 100. Any value greater than zero indicates expansion/ optimism and values less than zero indicate contraction/ pessimism.

Today, the Reserve Bank released the results of January 2023 round of its bi-monthly Inflation Expectations Survey of Households (IESH)1 2. The survey was conducted during January 2 to 11, 2023 in 19 major cities with responses from 6,024 urban households. Female respondents accounted for 49.7 per cent of this sample. The results are summarised in terms of median. Highlights: Households’ inflation perception for the current period moderated by 20 basis points (bps) to 9.6 per cent in January 2023. Inflation expectation of households rose by 10 bps for three months ahead period whereas their one year ahead expectations remained unchanged from the November 2022 round of the survey [Charts 1a and 1b; Table 3]. Among consumption categories, the proportion of respondents perceiving price rise was highest for the food group for both the horizons, as also witnessed in the previous two survey rounds [Table 1(a) and 1(b)]. Respondents expect higher price pressures for household durables and cost of housing over the next three months, when compared to the previous survey round [Table 1(a)]. City-wise, the range of inflation expectations was 7.4-12.8 per cent over three-month horizon and 8.3-13.3 per cent over one year horizon. [Table 2]. Note: Please see the excel file for time series data.3 Table 1(a): Product-wise Expectations of Prices for Three Months ahead (Percentage of Respondents) Survey period ended Jan-22 Jul-22 Sep-22 Nov-22 Jan-23 General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE Prices will increase 85.6 0.68 83.1 0.80 85.0 0.77 83.8 0.76 84.3 0.76 Price increase more than current rate 61.4 1.07 58.7 1.21 59.9 1.14 58.5 1.13 60.8 1.14 Price increase similar to current rate 20.5 0.87 21.1 0.97 20.9 0.85 20.8 0.89 20.2 0.86 Price increase less than current rate 3.7 0.40 3.3 0.36 4.2 0.44 4.4 0.43 3.4 0.36 No changes in prices 12.0 0.64 13.7 0.74 12.6 0.70 13.7 0.69 13.3 0.71 Decline in prices 2.4 0.30 3.2 0.38 2.4 0.33 2.5 0.32 2.3 0.30 Food Product                     Prices will increase 83.7 0.71 83.7 0.77 85.3 0.69 85.0 0.72 84.6 0.72 Price increase more than current rate 61.0 1.01 59.6 1.13 61.9 1.09 62.0 1.04 61.1 1.08 Price increase similar to current rate 17.0 0.78 18.9 0.90 17.4 0.75 17.2 0.76 18.4 0.77 Price increase less than current rate 5.7 0.47 5.2 0.45 6.1 0.49 5.9 0.48 5.1 0.43 No changes in prices 10.5 0.58 10.1 0.64 9.3 0.55 9.9 0.58 10.2 0.59 Decline in prices 5.8 0.45 6.1 0.52 5.4 0.45 5.1 0.44 5.2 0.45 Non- Food Product                     Prices will increase 80.4 0.73 80.8 0.84 82.3 0.74 81.1 0.77 81.8 0.77 Price increase more than current rate 55.4 1.02 55.7 1.14 55.8 1.08 57.2 1.05 56.4 1.08 Price increase similar to current rate 19.4 0.80 19.8 0.89 20.5 0.79 17.9 0.78 20.5 0.82 Price increase less than current rate 5.6 0.46 5.2 0.45 6.0 0.48 6.0 0.48 4.9 0.44 No changes in prices 14.1 0.64 13.2 0.72 13.1 0.67 14.4 0.70 13.4 0.67 Decline in prices 5.4 0.43 6.0 0.49 4.6 0.42 4.5 0.43 4.7 0.43 Household Durables                     Prices will increase 69.9 0.88 68.7 0.95 70.2 0.89 68.3 0.93 72.4 0.90 Price increase more than current rate 48.6 1.03 46.6 1.11 48.0 1.03 47.2 1.07 50.3 1.07 Price increase similar to current rate 16.2 0.70 17.3 0.81 16.8 0.70 16.0 0.75 17.5 0.71 Price increase less than current rate 5.1 0.45 4.8 0.44 5.3 0.45 5.1 0.43 4.6 0.42 No changes in prices 23.1 0.82 23.7 0.88 22.8 0.84 24.5 0.87 21.2 0.84 Decline in prices 7.0 0.45 7.6 0.54 7.1 0.50 7.3 0.49 6.3 0.47 Cost of Housing                     Prices will increase 71.5 0.88 74.8 0.88 75.7 0.92 76.5 0.88 78.0 0.86 Price increase more than current rate 51.3 1.07 54.2 1.10 53.2 1.07 55.4 1.09 58.4 1.08 Price increase similar to current rate 16.1 0.74 16.9 0.77 17.7 0.70 16.8 0.75 16.3 0.73 Price increase less than current rate 4.2 0.42 3.7 0.37 4.8 0.42 4.3 0.41 3.3 0.35 No changes in prices 21.3 0.80 20.3 0.82 20.2 0.88 19.3 0.83 18.9 0.84 Decline in prices 7.2 0.48 4.8 0.44 4.1 0.39 4.2 0.40 3.1 0.34 Cost of Services                     Prices will increase 74.3 0.83 71.7 0.93 72.2 0.91 70.6 0.89 71.7 0.90 Price increase more than current rate 51.6 1.05 48.6 1.12 49.4 1.10 49.1 1.04 49.9 1.08 Price increase similar to current rate 18.0 0.79 19.0 0.88 17.9 0.75 16.9 0.73 17.6 0.71 Price increase less than current rate 4.6 0.43 4.1 0.41 5.0 0.41 4.5 0.41 4.1 0.40 No changes in prices 22.3 0.78 24.8 0.92 24.7 0.87 26.6 0.88 25.5 0.88 Decline in prices 3.4 0.34 3.4 0.38 3.1 0.36 2.9 0.33 2.7 0.30 Note: 1. The table provides estimates and standard errors for qualitative responses. 2. Constituent items may not add up to the corresponding total, due to rounding off. Table 1(b): Product-wise Expectations of Prices for One Year ahead (Percentage of Respondents) Survey period ended Jan-22 Jul-22 Sep-22 Nov-22 Jan-23 General Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE Prices will increase 89.6 0.58 88.4 0.70 90.8 0.59 90.8 0.57 91.6 0.53 Price increase more than current rate 68.2 1.05 66.2 1.23 68.1 1.12 69.5 1.08 70.8 1.02 Price increase similar to current rate 18.1 0.81 19.3 1.00 19.3 0.88 18.2 0.87 17.9 0.81 Price increase less than current rate 3.3 0.39 2.8 0.32 3.5 0.38 3.1 0.34 3.0 0.33 No changes in prices 7.8 0.50 8.1 0.61 6.6 0.49 6.4 0.45 5.7 0.43 Decline in prices 2.6 0.29 3.4 0.41 2.5 0.34 2.8 0.33 2.6 0.31 Food Product                     Prices will increase 83.8 0.71 83.5 0.76 86.4 0.67 87.1 0.64 88.0 0.64 Price increase more than current rate 58.2 1.06 58.1 1.18 60.5 1.09 62.9 1.07 62.7 1.07 Price increase similar to current rate 20.4 0.86 21.3 0.98 21.0 0.84 19.6 0.83 20.7 0.87 Price increase less than current rate 5.2 0.45 4.1 0.40 4.9 0.42 4.7 0.42 4.5 0.42 No changes in prices 10.9 0.61 10.5 0.65 8.3 0.52 7.8 0.50 7.6 0.50 Decline in prices 5.3 0.40 6.0 0.55 5.3 0.45 5.0 0.41 4.4 0.39 Non- Food Product                     Prices will increase 82.9 0.72 83.6 0.78 86.0 0.69 85.0 0.71 86.7 0.67 Price increase more than current rate 57.5 1.09 58.9 1.16 59.8 1.09 60.7 1.09 62.0 1.09 Price increase similar to current rate 20.5 0.86 20.8 0.92 20.9 0.83 19.9 0.84 20.5 0.83 Price increase less than current rate 4.9 0.44 3.9 0.38 5.4 0.45 4.5 0.41 4.3 0.41 No changes in prices 12.0 0.61 10.9 0.68 9.5 0.56 10.1 0.58 9.1 0.54 Decline in prices 5.0 0.41 5.4 0.54 4.4 0.41 4.8 0.42 4.1 0.39 Household Durables                     Prices will increase 75.4 0.87 75.5 0.84 77.7 0.79 77.6 0.84 80.8 0.77 Price increase more than current rate 52.1 1.07 52.2 1.12 54.1 1.06 55.0 1.09 57.2 1.08 Price increase similar to current rate 18.7 0.81 19.3 0.88 18.9 0.79 18.2 0.80 19.3 0.79 Price increase less than current rate 4.6 0.45 4.0 0.39 4.6 0.41 4.3 0.39 4.3 0.41 No changes in prices 18.5 0.77 18.3 0.78 16.4 0.70 16.4 0.72 13.8 0.65 Decline in prices 6.1 0.44 6.1 0.49 6.0 0.45 6.0 0.47 5.4 0.43 Cost of Housing                     Prices will increase 79.3 0.78 83.4 0.75 85.8 0.67 86.5 0.69 87.4 0.63 Price increase more than current rate 57.0 1.03 61.4 1.14 61.8 1.04 64.4 1.04 66.8 0.98 Price increase similar to current rate 18.1 0.78 18.6 0.87 19.6 0.79 18.5 0.80 17.2 0.77 Price increase less than current rate 4.2 0.43 3.4 0.36 4.5 0.41 3.7 0.38 3.5 0.36 No changes in prices 15.1 0.66 12.4 0.67 10.6 0.58 10.2 0.59 9.8 0.57 Decline in prices 5.6 0.43 4.1 0.42 3.6 0.38 3.3 0.37 2.8 0.30 Cost of Services                     Prices will increase 82.0 0.75 81.1 0.84 84.2 0.74 84.2 0.74 84.0 0.72 Price increase more than current rate 57.5 1.04 57.4 1.17 58.6 1.08 60.1 1.10 60.2 1.08 Price increase similar to current rate 19.8 0.81 19.9 0.95 21.0 0.81 19.8 0.83 19.7 0.80 Price increase less than current rate 4.6 0.44 3.9 0.39 4.6 0.43 4.3 0.39 4.2 0.41 No changes in prices 15.1 0.68 15.0 0.80 12.9 0.65 12.9 0.67 13.1 0.65 Decline in prices 3.0 0.31 3.8 0.45 2.9 0.37 2.9 0.33 2.8 0.33 Note: 1. The table provides estimates and standard errors for qualitative responses. 2. Constituent items may not add up to the corresponding total, due to rounding off. Table 2: Inflation Expectations of Various Groups: Jan-23   Current Perception Three Months ahead Expectation One Year ahead Expectation Mean Median Mean Median Mean Median Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE Overall 9.7 0.09 9.6 0.30 10.8 0.10 10.5 0.08 10.8 0.11 10.8 0.09 Gender-wise                         Male 10.0 0.13 10.0 0.15 11.0 0.13 10.6 0.11 10.8 0.16 10.9 0.19 Female 9.5 0.13 9.2 0.34 10.7 0.13 10.4 0.09 10.8 0.15 10.8 0.09 Category-wise                         Financial Sector Employees 9.8 0.61 9.5 0.76 10.8 0.66 10.6 0.73 11.3 0.84 11.5 1.03 Other Employees 9.9 0.17 9.9 0.25 11.0 0.17 10.6 0.12 11.0 0.20 11.0 0.26 Self Employed 10.1 0.18 10.1 0.11 11.1 0.18 10.7 0.18 10.8 0.24 10.9 0.30 Homemaker 9.6 0.15 9.4 0.38 10.7 0.15 10.4 0.09 11.0 0.18 10.9 0.21 Retired Persons 9.9 0.32 9.9 0.48 10.9 0.31 10.6 0.28 10.8 0.38 11.1 0.49 Daily Workers 9.6 0.26 9.3 0.60 10.8 0.27 10.4 0.28 10.5 0.34 10.6 0.22 Other category 9.1 0.22 8.6 0.29 10.1 0.23 9.9 0.29 10.2 0.27 10.5 0.22 Age Group-wise                         Up to 25 years 8.9 0.19 8.3 0.23 10.1 0.20 9.5 0.34 10.2 0.23 10.2 0.21 25 to 30 years 9.5 0.17 9.3 0.40 10.6 0.18 10.4 0.13 10.9 0.21 10.9 0.24 30 to 35 years 9.9 0.21 9.9 0.30 11.0 0.21 10.6 0.14 11.1 0.24 11.2 0.39 35 to 40 years 9.8 0.20 9.9 0.30 11.0 0.20 10.7 0.16 11.0 0.24 11.1 0.38 40 to 45 years 10.0 0.22 10.1 0.23 11.0 0.21 10.6 0.17 10.8 0.26 10.8 0.29 45 to 50 years 10.6 0.24 10.3 0.10 11.3 0.23 10.9 0.36 11.4 0.27 12.4 0.62 50 to 55 years 10.2 0.28 10.1 0.29 11.1 0.28 10.7 0.28 11.2 0.32 11.6 0.67 55 to 60 years 9.5 0.30 9.1 0.54 10.6 0.32 10.4 0.20 10.6 0.36 10.7 0.19 60 years and above 10.1 0.26 10.0 0.34 11.1 0.26 10.7 0.23 10.4 0.35 10.8 0.31 City-wise                         Ahmedabad 8.7 0.31 7.8 0.58 9.9 0.38 9.0 0.77 10.0 0.46 9.7 0.90 Bengaluru 9.1 0.27 9.5 0.74 10.3 0.26 10.3 0.29 10.9 0.30 11.2 0.58 Bhopal 9.2 1.02 8.0 1.82 10.2 1.02 9.7 1.66 9.8 0.90 10.1 1.97 Bhubaneswar 8.5 0.62 7.6 1.39 10.5 0.74 10.5 1.36 10.6 0.74 11.2 1.63 Chennai 9.6 0.36 9.9 0.53 11.6 0.40 11.4 0.73 12.3 0.38 13.3 1.10 Delhi 10.8 0.22 10.4 0.10 11.7 0.23 11.4 0.54 11.4 0.26 11.8 0.63 Guwahati 8.2 0.55 7.6 1.03 8.9 0.61 8.1 0.83 9.6 0.73 8.9 0.83 Hyderabad 8.7 0.39 7.9 0.70 9.6 0.43 9.2 0.61 9.8 0.52 10.4 0.65 Jaipur 7.8 0.33 7.4 0.42 8.4 0.37 8.1 0.45 8.3 0.36 8.3 0.46 Jammu 12.0 0.74 11.5 1.61 11.8 0.93 12.8 2.17 10.2 1.00 11.6 1.88 Kolkata 10.8 0.31 10.3 0.24 11.9 0.31 11.7 0.79 12.1 0.33 13.1 1.00 Lucknow 9.0 0.50 8.9 0.59 10.0 0.50 10.0 0.57 9.9 0.62 10.3 0.71 Mumbai 10.3 0.22 9.7 0.33 11.5 0.22 10.8 0.23 10.9 0.29 11.1 0.42 Nagpur 9.9 0.55 9.5 0.70 11.2 0.57 10.6 1.01 11.6 0.56 11.8 1.21 Patna 7.8 0.42 7.4 0.37 8.5 0.45 8.1 0.37 8.6 0.49 8.3 0.28 Thiruvananthapuram 6.8 0.51 5.5 0.20 8.3 0.49 7.4 0.58 9.3 0.57 8.8 0.97 Chandigarh 11.0 0.65 11.0 1.28 11.0 0.66 11.4 1.57 10.7 0.73 12.1 1.91 Ranchi 8.4 0.39 8.0 0.30 9.0 0.52 8.6 0.39 9.1 0.55 9.3 0.57 Raipur 8.5 0.65 8.2 0.78 9.4 0.63 9.1 0.84 10.0 0.97 10.6 0.80 Note: The table provides estimates and standard errors for quantitative responses. Table 3: Household Inflation Expectations – Current Perception, Three Months and One Year Ahead Expectations   Current Perception Three Months ahead Expectation One Year ahead Expectation Mean Median Mean Median Mean Median Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE Estimate SE Jan-22 9.9 0.10 9.7 0.28 11.1 0.10 10.6 0.08 10.7 0.11 10.7 0.09 Jul-22 9.8 0.10 9.3 0.24 10.7 0.11 10.3 0.08 10.3 0.13 10.5 0.08 Sep-22 10.4 0.10 10.2 0.05 11.3 0.10 10.8 0.09 11.1 0.12 11.0 0.23 Nov-22 10.0 0.10 9.8 0.23 10.9 0.10 10.4 0.07 10.8 0.11 10.8 0.08 Jan-23 9.7 0.09 9.6 0.30 10.8 0.10 10.5 0.08 10.8 0.11 10.8 0.09 Note: The table provides estimates and standard errors for quantitative responses. Table 4: Households Expecting General Price Movements in Coherence with Movements in Price Expectations of Various Product Groups: Three Months Ahead and One Year Ahead (Percentage of Respondents) Survey period ended Food Non-Food Household durables Housing Cost of services Three Months Ahead Jan-22 66.8 65.8 60.5 61.7 66.0 Jul-22 66.9 67.8 62.3 63.7 66.9 Sep-22 67.1 66.9 61.1 62.0 66.6 Nov-22 66.6 67.1 60.2 64.7 66.0 Jan-23 65.6 67.3 62.6 66.2 66.5 One Year Ahead Jan-22 71.7 72.4 65.2 67.5 72.9 Jul-22 74.3 75.5 69.2 73.2 75.8 Sep-22 73.8 74.3 67.7 71.7 74.6 Nov-22 74.4 74.8 68.6 73.7 75.0 Jan-23 75.2 74.8 68.4 74.7 74.0 Note: Figures are based on sample observations Table 5(a): Cross-tabulation of Number of Respondents by Current Inflation Perception and Three Months Ahead Inflation Expectations: Jan-23 Three Months Ahead Inflation Rate (per cent) Current Inflation Rate (per cent)   <1 1-<2 2-<3 3-<4 4-<5 5-<6 6-<7 7-<8 8-<9 9-<10 10-<11 11-<12 12-<13 13-<14 14-<15 15-<16 >=16 No idea Total <1 6 1 3 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 12 1-<2 2 19 8 2 1 3 0 0 0 0 0 0 0 0 0 0 0 0 35 2-<3 0 10 62 45 21 12 0 0 1 0 1 0 0 0 0 0 0 2 154 3-<4 1 0 5 56 45 49 14 0 0 1 0 0 0 0 0 0 0 3 174 4-<5 0 1 6 5 76 52 30 5 6 1 0 0 0 0 0 2 0 0 184 5-<6 1 2 7 23 23 357 142 196 90 10 117 2 2 0 0 11 1 5 989 6-<7 0 0 0 1 9 8 158 96 68 27 20 0 8 0 0 1 0 0 396 7-<8 0 0 0 0 3 12 7 174 122 63 55 3 8 0 4 1 1 0 453 8-<9 1 0 1 2 5 6 9 8 188 96 149 19 15 4 1 1 4 0 509 9-<10 0 0 0 0 0 3 2 0 4 68 70 23 25 4 1 3 1 0 204 10-<11 0 0 1 1 5 27 6 4 14 9 438 114 242 81 16 277 122 3 1360 11-<12 0 0 0 0 0 0 1 0 1 1 0 15 12 11 5 2 3 0 51 12-<13 0 0 0 0 1 0 0 0 2 0 1 0 47 19 18 27 10 0 125 13-<14 0 0 0 0 1 0 0 0 0 0 0 0 1 14 3 7 5 0 31 14-<15 0 0 0 0 0 0 0 0 0 0 1 1 1 1 11 4 10 1 30 15-<16 0 0 0 1 0 5 0 2 0 0 7 0 1 2 1 87 195 1 302 >=16 0 0 0 2 0 5 2 2 0 0 20 0 2 1 2 21 954 4 1015 Total 11 33 93 138 190 539 371 487 496 276 879 177 364 137 62 444 1307 20 6024 Note: Figures are based on sample observations Table 5(b): Cross-tabulation of Number of Respondents by Current Inflation Perception and One Year Ahead Inflation Expectations: Jan-23 One Year Ahead Inflation Rate (per cent) Current Inflation Rate (per cent)   <1 1-<2 2-<3 3-<4 4-<5 5-<6 6-<7 7-<8 8-<9 9-<10 10-<11 11-<12 12-<13 13-<14 14-<15 15-<16 >=16 No idea Total <1 6 0 3 1 1 0 0 0 0 0 0 0 0 0 0 0 1 0 12 1-<2 13 5 8 2 4 1 1 0 0 0 1 0 0 0 0 0 0 0 35 2-<3 18 6 31 36 29 21 1 4 3 2 1 0 0 0 0 0 0 2 154 3-<4 16 0 2 30 28 51 19 5 4 3 8 4 1 0 0 0 1 2 174 4-<5 24 0 2 1 37 41 37 11 17 3 6 1 2 0 0 2 0 0 184 5-<6 91 0 5 6 11 184 96 154 105 43 210 8 23 7 4 24 16 2 989 6-<7 32 0 0 0 1 5 90 76 91 19 47 10 11 2 1 7 4 0 396 7-<8 45 0 0 0 0 5 5 99 88 85 68 13 20 3 10 8 4 0 453 8-<9 34 0 1 0 2 4 3 4 99 63 150 40 63 15 6 11 14 0 509 9-<10 13 0 0 0 0 1 0 1 4 32 49 25 39 14 7 12 7 0 204 10-<11 93 0 0 0 0 9 5 3 6 4 246 70 198 60 51 329 283 3 1360 11-<12 4 0 0 0 0 0 0 0 0 1 0 10 9 11 8 3 5 0 51 12-<13 7 0 0 0 0 0 0 2 0 0 0 0 17 11 18 38 32 0 125 13-<14 3 0 0 0 0 0 0 0 0 0 1 0 0 5 3 13 6 0 31 14-<15 2 0 0 0 0 0 0 0 0 0 0 1 0 0 9 5 11 2 30 15-<16 18 0 0 1 0 1 0 0 0 0 8 0 1 0 2 53 216 2 302 >=16 88 0 0 0 0 1 0 1 1 0 12 0 1 0 2 16 885 8 1015 Total 507 11 52 77 113 324 257 360 418 255 807 182 385 128 121 521 1485 21 6024 Note: Figures are based on sample observations 1 The survey results reflect the respondents’ views, which are not necessarily shared by the Reserve Bank. Results of the previous survey round were released on the Bank’s website on December 07, 2022. 2 The survey is conducted at bi-monthly intervals by the Reserve Bank and it provides directional information on near-term inflationary pressures as expected by the respondents and may reflect their own consumption patterns. Hence, they should be treated as households’ sentiments on inflation. All estimates of inflation expectations are given in the form of medians, unless stated otherwise. 3 Unit-level data for previous rounds of the survey are available on the Database on Indian Economy (DBIE) portal of the Bank (weblink: https://dbie.rbi.org.in/DBIE/dbie.rbi?site=unitLevelData).

Today, the Reserve Bank released the results of its 59th round of the quarterly Order Books, Inventories and Capacity Utilisation Survey (OBICUS) conducted during Q3:2022-23 covering 800 manufacturing companies. The survey1 provides a snapshot of demand conditions in India’s manufacturing sector during July-September 2022. Highlights: The aggregate level capacity utilisation (CU) for the manufacturing sector improved to 74.0 per cent in Q2:2022-23 from 72.4 per cent in the previous quarter. The seasonally adjusted CU for Q2:2022-23 also increased by 20 basis points (bps) to 74.5 per cent from its level in the previous quarter (Chart 1 and Table 1). New orders received by manufacturing companies during Q2:2022-23 were close to their level in the previous quarters but they were substantially higher than that in the corresponding quarter a year ago. (Chart 2 and Table 2A). Both raw material inventory (RMI) to sales and finished goods inventory (FGI) to sales ratios declined in Q2:2022-23 as compared to the previous quarter, which was commensurate with higher sales growth and similar level of new orders on sequential basis (Chart 3 and Table 3A). Note- Please see the excel file for time series data. ANNEX 1: Data Tables Table 1: IIP*-Manufacturing and Capacity Utilisation (CU) Quarter Number of responding companies Capacity Utilisation IIP-Manufacturing (Quarterly Average) De-trended Quarterly IIP-Manufacturing Q2:2021-22 728 68.3 131.6 1.6 Q3:2021-22 757 72.4 135.0 4.5 Q4:2021-22 727 75.3 138.1 7.0 Q1:2022-23 692 72.4 134.3 2.6 Q2:2022-23 745 74.0 133.7 1.4 *: Index of Industrial Production (Base: 2011-12) Table 2A: Order Books Growth (Q2:2021-22 to Q2:2022-23) Quarter Number of companies Q-o-Q Growth # (per cent) ** Y-o-Y Growth # (per cent) Backlog Orders New Order Book Pending Orders Backlog Orders New Order Book Pending Orders Q2:2021-22 184 10.8 2.1 3.9 10.2 16.9 15.1 Q3:2021-22 205 3.5 10.5 7.8 19.5 20.9 20.5 Q4:2021-22 207 4.7 5.6 4.6 14.2 28.4 25.1 Q1:2022-23 233 0.3 3.4 4.2 15.2 38.7 10.3 Q2:2022-23 265 4.6 -0.1 10.8 11.4 25.9 20.1 #: Growth rates are calculated using three rounds common set of companies, namely, companies responded in the current quarter, one quarter ago and the same quarter a year ago. **: Not seasonally adjusted. Table 2B: Average Size of Order Books (Q2:2021-22 to Q2:2022-23) Quarter Number of companies Average Amount (₹ Crores) Backlog Orders New Order Book Pending Orders Q2:2021-22 184 197.9 195.7 207.4 Q3:2021-22 205 182.3 224.4 196.6 Q4:2021-22 207 176.3 222.4 184.2 Q1:2022-23 233 221.7 244.8 231.5 Q2:2022-23 265 208.8 307.9 232.4 Table 3A: Inventory to Sales Ratios (Q2:2021-22 to Q2:2022-23) Quarter Number of Companies Ratio (per cent) # Total Inventory / Sales Finished Goods Inventory / Sales Raw Material Inventory / Sales Q2:2021-22 537 60.5 20.9 29.4 Q3:2021-22 681 58.1 22.4 28.0 Q4:2021-22 651 65.2 24.7 30.5 Q1:2022-23 630 69.6 24.6 33.5 Q2:2022-23 721 61.8 22.6 29.6 #: Weighted average of industry level ratios using GVA as weights Table 3B: Average Sales and Inventories (Q2:2021-22 to Q2:2022-23) Quarter Number of Companies Average Amount (₹ Crores) Sales Total Inventory Finished Goods Inventory Work in progress Inventory Raw Material Inventory Q2:2021-22 537 1012.6 494.4 200.0 78.6 215.8 Q3:2021-22 681 1027.9 465.0 193.5 62.0 209.5 Q4:2021-22 651 1123.2 530.2 219.2 79.8 231.2 Q1:2022-23 630 1238.3 591.8 238.3 87.3 266.2 Q2:2022-23 721 1285.8 508.2 217.6 73.2 217.4 Note: The computations of order book growths and inventory to sales ratios are based on methodology given in the RBI press release dated October 8, 2021 (link: https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=20650) and not on the basis of averages given in the above tables. 1 The survey responses are voluntary. Results of the previous survey round were released on the Bank’s website on September 30, 2022.

Today, the Reserve Bank released the results of 100th round of its industrial outlook survey (IOS). The survey encapsulates qualitative assessment of the business climate by Indian manufacturing companies for Q3:2022-23 and their expectations for Q4:2022-231 as well as outlook for the two subsequent quarters. In all, 1,356 companies responded in this round of the survey, which was conducted during Q3:2022-23. Highlights: A. Assessment for Q3: 2022-23 Respondents from manufacturing sector polled for demand expansion in Q3:2022-23 in terms of improved assessment for production, order books, capacity utilisation and employment situation compared to the previous round of the survey (Table A). Manufacturers assessed some moderation in the pace of increase in raw material cost and higher salary outgo and cost of finance during the quarter. Respondents reported deceleration in selling prices during Q3:2022-23 with net negative sentiments on profit margin. Overall business sentiments remained buoyant as reflected through improved business assessment index (BAI)2 at 108.6 for Q3:2022-23, as against 106.7 in the previous quarter (Chart 1). B. Expectations for Q4: 2022-23 Respondents retained optimistic outlook on demand conditions for Q4:2022-23, with marginally waned expectations on order books, employment and foreign trade. Cost pressures from financing, purchase of raw materials and wages are likely to continue with some softening during Q4:2022-23. Selling prices and profit margins are expected to continue to rise with some curb as a majority of respondents expect ‘no change’. Manufacturers remained highly optimistic about overall business conditions with the business expectations index (BEI) remaining elevated at 132.9 in Q4:2022-23 though it moderated marginally on a sequential basis (Chart 1). C. Expectations for Q1:2023-24 and Q2:2023-24 Manufacturers remain optimistic on demand conditions for next two expectations quarters as reflected in highly positive sentiments on production, order books, employment condition, capacity utilisation and overall business situation (Table B). Input cost pressures for manufacturing sector is likely to continue with some easing and selling price growth is expected to remain elevated with softening bias during H1:2023-24. Table A: Summary of Net responses3 on Survey Parameters (per cent) Parameters Assessment period Expectation period Q2:2022-23 Q3:2022-23 Q3:2022-23 Q4:2022-23 Production 18.1 25.1 56.2 57.4 Order Books 18.6 21.0 62.4 59.4 Pending Orders 7.3 6.2 -0.7 1.2 Capacity Utilisation 8.6 14.9 46.6 47.2 Inventory of Raw Materials -4.6 -10.8 -25.7 -26.8 Inventory of Finished Goods -4.0 -9.5 -26.5 -26.1 Exports 11.1 8.5 56.0 51.5 Imports 13.4 11.6 57.6 51.5 Employment 12.5 13.6 43.8 36.4 Financial Situation (Overall) 13.9 20.1 57.7 60.6 Availability of Finance (from internal accruals) 15.9 21.9 49.3 53.5 Availability of Finance (from banks & other sources) 15.4 17.0 55.1 49.2 Availability of Finance (from overseas, if applicable) 10.6 10.7 58.9 50.1 Cost of Finance -30.1 -31.1 -51.9 -50.5 Cost of Raw Material -72.5 -64.9 -64.2 -60.9 Salary/ Other Remuneration -26.4 -27.0 -46.0 -38.7 Selling Price 14.4 10.4 45.1 39.6 Profit Margin -9.3 -8.4 35.2 32.9 Overall Business Situation 15.8 20.3 59.4 63.1 Table B: Business Expectations of Select Parameters for extended period – Net response (per cent) Parameters Round 99 Round 100 Q3:2022-23 Q4:2022-23 Q1:2023-24 Q2:2023-24 Overall Business Situation 59.4 63.1 59.0 60.2 Production 56.2 57.4 57.3 58.3 Order Books 62.4 59.4 53.1 53.3 Capacity Utilisation 46.6 47.2 55.0 55.3 Employment 43.8 36.4 44.3 38.7 Cost of Raw Materials -64.2 -60.9 -52.7 -51.9 Selling Prices 45.1 39.6 45.6 40.0 Note: Please see the excel file for time series data Table 1: Assessment and Expectations for Production (Percentage responses) Quarter Total response Assessment Expectations Increase Decrease No change Net response Increase Decrease No change Net response Q3:2021-22 1,082 42.5 11.6 45.9 30.9 75.3 3.8 20.9 71.5 Q4:2021-22 1,283 38.0 14.2 47.8 23.8 66.5 5.3 28.3 61.2 Q1:2022-23 1,239 36.6 14.4 48.9 22.2 70.4 4.9 24.7 65.6 Q2:2022-23 1,234 34.3 16.3 49.4 18.1 72.4 5.0 22.6 67.4 Q3:2022-23 1,356 40.5 15.4 44.1 25.1 60.8 4.6 34.5 56.2 Q4:2022-23           61.2 3.8 34.9 57.4 ‘Increase’ in production is optimistic. Note: The sum of components may not add up to total due to rounding off (This is applicable for all tables). Table 2: Assessment and Expectations for Order Books (Percentage responses) Quarter Total response Assessment Expectations Increase Decrease No change Net response Increase Decrease No change Net response Q3:2021-22 1,082 39.0 9.5 51.5 29.5 73.9 3.6 22.4 70.3 Q4:2021-22 1,283 34.7 13.4 51.9 21.3 66.2 4.7 29.1 61.5 Q1:2022-23 1,239 34.1 12.5 53.4 21.7 70.4 4.2 25.4 66.1 Q2:2022-23 1,234 30.7 12.1 57.2 18.6 72.7 4.6 22.6 68.1 Q3:2022-23 1,356 33.1 12.1 54.8 21.0 67.1 4.7 28.3 62.4 Q4:2022-23           63.3 3.9 32.8 59.4 ‘Increase’ in order books is optimistic. Table 3: Assessment and Expectations for Pending Orders (Percentage responses) Quarter Total response Assessment Expectations Above Normal Below Normal Normal Net response Above Normal Below Normal Normal Net response Q3:2021-22 1,082 7.2 10.9 81.9 3.6 8.8 4.8 86.4 -4.1 Q4:2021-22 1,283 9.8 13.7 76.5 3.9 8.5 7.9 83.6 -0.5 Q1:2022-23 1,239 6.7 14.2 79.1 7.5 8.8 10.6 80.6 1.8 Q2:2022-23 1,234 10.3 17.6 72.0 7.3 7.7 10.3 82.1 2.6 Q3:2022-23 1,356 8.4 14.6 76.9 6.2 10.8 10.1 79.2 -0.7 Q4:2022-23           8.9 10.1 81.0 1.2 Pending orders ‘Below Normal’ is optimistic. Table 4: Assessment and Expectations for Capacity Utilisation (Main Product) (Percentage responses) Quarter Total response Assessment Expectations Increase Decrease No change Net response Increase Decrease No change Net response Q3:2021-22 1,082 31.2 9.0 59.8 22.2 68.3 3.1 28.5 65.2 Q4:2021-22 1,283 30.2 13.0 56.9 17.2 57.0 4.5 38.5 52.6 Q1:2022-23 1,239 29.5 12.8 57.7 16.8 63.5 4.5 32.0 59.0 Q2:2022-23 1,234 23.4 14.8 61.8 8.6 65.6 5.0 29.4 60.6 Q3:2022-23 1,356 29.8 15.0 55.2 14.9 51.5 4.9 43.6 46.6 Q4:2022-23           51.3 4.1 44.6 47.2 ‘Increase’ in capacity utilisation is optimistic. Table 5: Assessment and Expectations for Level of CU (compared to the average in last 4 quarters) (Percentage responses) Quarter Total response Assessment Expectations Above Normal Below Normal Normal Net response Above Normal Below Normal Normal Net response Q3:2021-22 1,082 12.6 8.4 78.9 4.2 30.4 3.7 65.9 26.7 Q4:2021-22 1,283 12.6 10.8 76.6 1.9 30.1 5.8 64.2 24.3 Q1:2022-23 1,239 19.6 10.4 70.0 9.2 39.3 5.4 55.4 33.9 Q2:2022-23 1,234 20.5 12.8 66.7 7.8 50.2 6.3 43.5 43.9 Q3:2022-23 1,356 28.7 13.2 58.1 15.5 37.0 6.1 56.9 30.9 Q4:2022-23           34.7 8.1 57.2 26.7 ‘Above Normal’ in Level of capacity utilisation is optimistic. Table 6: Assessment and Expectations for Assessment of Production Capacity (with regard to expected demand in next 6 months) (Percentage responses) Quarter Total response Assessment Expectations More than adequate Less than adequate Adequate Net response More than adequate Less than adequate Adequate Net response Q3:2021-22 1,082 13.2 6.1 80.6 7.1 31.0 4.0 65.1 27.0 Q4:2021-22 1,283 14.1 7.1 78.8 7.1 30.7 4.0 65.3 26.7 Q1:2022-23 1,239 25.2 7.2 67.6 18.0 42.7 3.9 53.5 38.8 Q2:2022-23 1,234 21.1 6.8 72.1 14.3 51.5 5.4 43.0 46.1 Q3:2022-23 1,356 28.9 4.4 66.7 24.6 42.9 4.5 52.7 38.4 Q4:2022-23           42.7 3.3 53.9 39.4 ‘More than adequate’ in Assessment of Production Capacity is optimistic. Table 7: Assessment and Expectations for Exports (Percentage responses) Quarter Total response Assessment Expectations Increase Decrease No change Net response Increase Decrease No change Net response Q3:2021-22 1,082 29.8 9.7 60.5 20.0 67.3 3.1 29.6 64.3 Q4:2021-22 1,283 25.3 12.6 62.1 12.7 59.2 4.5 36.4 54.7 Q1:2022-23 1,239 25.5 11.2 63.4 14.3 62.4 4.4 33.2 58.0 Q2:2022-23 1,234 25.2 14.0 60.8 11.1 65.2 4.4 30.4 60.8 Q3:2022-23 1,356 25.6 17.1 57.3 8.5 61.2 5.2 33.6 56.0 Q4:2022-23           55.5 3.9 40.6 51.5 ‘Increase’ in exports is optimistic. Table 8: Assessment and Expectations for Imports (Percentage responses) Quarter Total response Assessment Expectations Increase Decrease No change Net response Increase Decrease No change Net response Q3:2021-22 1,082 26.8 6.9 66.3 19.9 63.4 2.9 33.7 60.4 Q4:2021-22 1,283 22.9 11.6 65.4 11.3 55.6 3.8 40.6 51.8 Q1:2022-23 1,239 23.9 9.0 67.0 14.9 59.7 3.4 36.9 56.4 Q2:2022-23 1,234 23.5 10.1 66.4 13.4 64.5 3.2 32.3 61.3 Q3:2022-23 1,356 23.8 12.2 64.0 11.6 60.8 3.2 36.0 57.6 Q4:2022-23           54.3 2.8 42.9 51.5 ‘Increase’ in imports is optimistic. Table 9: Assessment and Expectations for level of Raw Materials Inventory (Percentage responses) Quarter Total response Assessment Expectations Above average Below average Average Net response Above average Below average Average Net response Q3:2021-22 1,082 16.5 5.1 78.4 -11.4 33.7 4.4 61.9 -29.4 Q4:2021-22 1,283 14.7 6.9 78.4 -7.8 32.7 3.7 63.5 -29.0 Q1:2022-23 1,239 16.8 7.0 76.1 -9.8 42.4 3.6 54.0 -38.8 Q2:2022-23 1,234 15.0 10.5 74.5 -4.6 46.1 4.6 49.3 -41.5 Q3:2022-23 1,356 18.1 7.3 74.6 -10.8 32.8 7.1 60.1 -25.7 Q4:2022-23           32.4 5.6 62.0 -26.8 ‘Below average’ Inventory of raw materials is optimistic. Table 10: Assessment and Expectations for level of Finished Goods Inventory (Percentage responses) Quarter Total response Assessment Expectations Above average Below average Average Net response Above average Below average Average Net response Q3:2021-22 1,082 15.3 5.5 79.2 -9.8 34.4 3.8 61.8 -30.7 Q4:2021-22 1,283 13.7 7.2 79.0 -6.5 31.1 3.9 64.9 -27.2 Q1:2022-23 1,239 16.4 7.4 76.2 -9.0 42.4 3.0 54.6 -39.5 Q2:2022-23 1,234 14.2 10.2 75.6 -4.0 45.6 4.3 50.1 -41.3 Q3:2022-23 1,356 17.1 7.7 75.2 -9.5 33.4 6.9 59.7 -26.5 Q4:2022-23           31.9 5.8 62.3 -26.1 ‘Below average’ Inventory of finished goods is optimistic. Table 11: Assessment and Expectations for Employment (Percentage responses) Quarter Total response Assessment Expectations Increase Decrease No change Net response Increase Decrease No change Net response Q3:2021-22 1,082 25.3 5.4 69.3 19.8 52.2 1.3 46.5 50.9 Q4:2021-22 1,283 20.3 8.9 70.8 11.4 49.2 2.0 48.8 47.2 Q1:2022-23 1,239 23.4 8.1 68.4 15.3 52.7 2.5 44.7 50.2 Q2:2022-23 1,234 21.5 9.0 69.5 12.5 57.1 2.1 40.8 54.9 Q3:2022-23 1,356 23.0 9.4 67.7 13.6 45.0 1.2 53.9 43.8 Q4:2022-23           39.0 2.5 58.5 36.4 ‘Increase’ in employment is optimistic. Table 12: Assessment and Expectations for Overall Financial Situation (Percentage responses) Quarter Total response Assessment Expectations Better Worsen No change Net response Better Worsen No change Net response Q3:2021-22 1,082 38.1 9.8 52.0 28.3 71.5 2.9 25.7 68.6 Q4:2021-22 1,283 33.9 13.2 53.0 20.7 64.0 4.7 31.3 59.3 Q1:2022-23 1,239 33.0 12.3 54.7 20.6 69.3 3.9 26.7 65.4 Q2:2022-23 1,234 28.7 14.8 56.4 13.9 70.4 3.4 26.2 67.1 Q3:2022-23 1,356 35.6 15.5 49.0 20.1 61.4 3.8 34.8 57.7 Q4:2022-23           63.9 3.3 32.8 60.6 ‘Better’ overall financial situation is optimistic. Table 13: Assessment and Expectations for Working Capital Finance Requirement (Percentage responses) Quarter Total response Assessment Expectations Increase Decrease No change Net response Increase Decrease No change Net response Q3:2021-22 1,082 31.6 4.5 63.9 27.1 63.3 2.2 34.4 61.1 Q4:2021-22 1,283 31.4 8.1 60.5 23.3 54.7 2.9 42.4 51.7 Q1:2022-23 1,239 33.4 7.9 58.7 25.5 62.8 1.4 35.7 61.4 Q2:2022-23 1,234 29.6 6.8 63.5 22.8 65.0 2.6 32.5 62.4 Q3:2022-23 1,356 35.2 7.3 57.5 27.9 51.2 1.6 47.3 49.6 Q4:2022-23           52.3 1.1 46.5 51.2 ‘Increase’ in working capital finance is optimistic. Table 14: Assessment and Expectations for Availability of Finance (from Internal Accruals) (Percentage responses) Quarter Total response Assessment Expectations Improve Worsen No change Net response Improve Worsen No change Net response Q3:2021-22 1,082 30.6 5.8 63.6 24.8 64.1 2.1 33.8 61.9 Q4:2021-22 1,283 27.7 9.6 62.7 18.1 55.7 2.8 41.5 52.9 Q1:2022-23 1,239 27.8 9.7 62.4 18.1 62.4 2.5 35.2 59.9 Q2:2022-23 1,234 24.0 8.0 68.0 15.9 64.2 2.4 33.4 61.9 Q3:2022-23 1,356 31.1 9.1 59.8 21.9 51.3 2.0 46.7 49.3 Q4:2022-23           55.2 1.7 43.1 53.5 ‘Improvement’ in availability of finance is optimistic. Table 15: Assessment and Expectations for Availability of Finance (from banks and other sources) (Percentage responses) Quarter Total response Assessment Expectations Improve Worsen No change Net response Improve Worsen No change Net response Q3:2021-22 1,082 26.2 3.9 69.9 22.4 60.6 1.9 37.5 58.7 Q4:2021-22 1,283 24.1 8.0 68.0 16.1 52.0 2.1 45.9 49.8 Q1:2022-23 1,239 24.8 7.6 67.5 17.2 59.3 1.5 39.2 57.8 Q2:2022-23 1,234 21.9 6.5 71.6 15.4 62.2 1.8 36.1 60.4 Q3:2022-23 1,356 26.0 9.1 64.9 17.0 56.7 1.7 41.6 55.1 Q4:2022-23           50.5 1.3 48.2 49.2 ‘Improvement’ in availability of finance is optimistic. Table 16: Assessment and Expectations for Availability of Finance (from overseas, if applicable) (Percentage responses) Quarter Total response Assessment Expectations Improve Worsen No change Net response Improve Worsen No change Net response Q3:2021-22 1,082 22.4 3.4 74.1 19.0 66.5 0.6 32.8 65.9 Q4:2021-22 1,283 17.9 8.7 73.4 9.1 52.5 1.5 46.0 50.9 Q1:2022-23 1,239 21.9 7.5 70.6 14.4 60.2 0.9 38.9 59.2 Q2:2022-23 1,234 17.4 6.8 75.8 10.6 65.8 1.2 33.0 64.6 Q3:2022-23 1,356 20.4 9.7 69.9 10.7 59.6 0.8 39.6 58.9 Q4:2022-23           51.3 1.3 47.4 50.1 ‘Improvement’ in availability of finance is optimistic. Table 17: Assessment and Expectations for Cost of Finance (Percentage responses) Quarter Total response Assessment Expectations Increase Decrease No change Net response Increase Decrease No change Net response Q3:2021-22 1,082 24.9 5.5 69.5 -19.4 58.3 2.5 39.3 -55.8 Q4:2021-22 1,283 22.1 9.6 68.3 -12.6 50.7 2.1 47.2 -48.6 Q1:2022-23 1,239 30.5 6.9 62.6 -23.6 57.0 2.1 40.9 -54.9 Q2:2022-23 1,234 36.1 6.1 57.8 -30.1 65.6 1.6 32.8 -64.0 Q3:2022-23 1,356 37.0 5.9 57.1 -31.1 53.5 1.6 44.9 -51.9 Q4:2022-23           51.6 1.1 47.3 -50.5 ‘Decrease’ in cost of finance is optimistic. Table 18: Assessment and Expectations for Cost of Raw Materials (Percentage responses) Quarter Total response Assessment Expectations Increase Decrease No change Net response Increase Decrease No change Net response Q3:2021-22 1,082 62.0 3.2 34.8 -58.8 76.6 1.4 22.1 -75.2 Q4:2021-22 1,283 55.0 5.5 39.4 -49.5 75.1 1.5 23.3 -73.6 Q1:2022-23 1,239 85.5 1.1 13.3 -84.4 78.2 1.2 20.6 -77.0 Q2:2022-23 1,234 77.0 4.6 18.4 -72.5 80.6 1.6 17.9 -79.0 Q3:2022-23 1,356 73.0 8.1 18.9 -64.9 66.8 2.6 30.7 -64.2 Q4:2022-23           63.4 2.4 34.2 -60.9 ‘Decrease’ in cost of raw materials is optimistic. Table 19: Assessment and Expectations for Salary/Other Remuneration (Percentage responses) Quarter Total response Assessment Expectations Increase Decrease No change Net response Increase Decrease No change Net response Q3:2021-22 1,082 29.3 2.4 68.3 -26.9 51.2 0.9 47.9 -50.4 Q4:2021-22 1,283 24.6 6.4 69.0 -18.2 50.9 1.0 48.2 -49.9 Q1:2022-23 1,239 39.6 4.8 55.5 -34.8 66.3 0.7 33.0 -65.6 Q2:2022-23 1,234 30.8 4.4 64.7 -26.4 61.3 0.4 38.3 -60.8 Q3:2022-23 1,356 30.1 3.1 66.8 -27.0 46.3 0.3 53.4 -46.0 Q4:2022-23           39.3 0.6 60.0 -38.7 ‘Decrease’ in Salary / other remuneration is optimistic. Table 20: Assessment and Expectations for Selling Price (Percentage responses) Quarter Total response Assessment Expectations Increase Decrease No change Net response Increase Decrease No change Net response Q3:2021-22 1,082 34.5 6.3 59.2 28.2 59.7 2.3 38.0 57.4 Q4:2021-22 1,283 30.0 9.7 60.2 20.3 54.0 3.7 42.3 50.3 Q1:2022-23 1,239 33.3 8.3 58.4 25.0 59.5 3.8 36.7 55.7 Q2:2022-23 1,234 25.1 10.7 64.2 14.4 63.4 3.2 33.4 60.3 Q3:2022-23 1,356 23.3 12.9 63.8 10.4 48.8 3.7 47.5 45.1 Q4:2022-23           43.2 3.6 53.1 39.6 ‘Increase’ in selling price is optimistic. Table 21: Assessment and Expectations for Profit Margin (Percentage responses) Quarter Total response Assessment Expectations Increase Decrease No change Net response Increase Decrease No change Net response Q3:2021-22 1,082 22.8 19.0 58.2 3.8 59.9 8.2 31.9 51.7 Q4:2021-22 1,283 20.6 21.8 57.6 -1.2 49.5 9.7 40.8 39.8 Q1:2022-23 1,239 22.5 20.7 56.7 1.8 53.6 10.4 35.9 43.2 Q2:2022-23 1,234 16.2 25.5 58.2 -9.3 57.6 10.1 32.3 47.4 Q3:2022-23 1,356 17.6 26.1 56.3 -8.4 44.2 9.0 46.8 35.2 Q4:2022-23           41.0 8.1 50.9 32.9 ‘Increase’ in profit margin is optimistic. Table 22: Assessment and Expectations for Overall Business Situation (Percentage responses) Quarter Total response Assessment Expectations Better Worsen No change Net response Better Worsen No change Net response Q3:2021-22 1,082 42.3 9.8 47.9 32.5 73.1 2.8 24.1 70.3 Q4:2021-22 1,283 37.7 13.6 48.8 24.1 67.6 4.2 28.2 63.4 Q1:2022-23 1,239 36.0 13.8 50.2 22.3 71.8 3.8 24.4 68.0 Q2:2022-23 1,234 31.6 15.7 52.7 15.8 73.9 3.2 22.9 70.7 Q3:2022-23 1,356 37.7 17.4 44.9 20.3 63.8 4.4 31.7 59.4 Q4:2022-23           66.9 3.7 29.4 63.1 ‘Better’ Overall Business Situation is optimistic. Table 23: Business Sentiments Quarter Business Assessment Index (BAI) Business Expectations Index (BEI) Q3:2021-22 115.0 139.3 Q4:2021-22 111.5 137.8 Q1:2022-23 110.1 134.7 Q2:2022-23 106.7 137.5 Q3:2022-23 108.6 134.4 Q4:2022-23   132.9 1 The survey results reflect the respondents’ views, which are not necessarily shared by the Reserve Bank. Results of the previous survey round were released on the Bank’s website on September 30, 2022. 2 For each survey round, two summary indices are computed – one based on assessment [viz., Business Assessment Index (BAI)] and another based on expectations [viz., Business Expectations Index (BEI)]. Each index is a composite indicator calculated as a simple average of nine business parameters, where each parameter is derived as a weighted net response, weights being the share of industry groups in gross value added (GVA). The nine parameters considered are: (1) overall business situation; (2) production; (3) order books; (4) inventory of raw material; (5) inventory of finished goods; (6) profit margins; (7) employment; (8) exports; and (9) capacity utilisation. BAI/BEI gives a snapshot of the business outlook in every quarter and takes values between 0 and 200, with 100 being the threshold separating expansion from contraction. 3 Net Response (NR) is the difference between the percentage of respondents reporting optimism and those reporting pessimism. It ranges between -100 to 100. Any value greater than zero indicates expansion/optimism and any value less than zero indicates contraction/pessimism. In other words, NR = (I – D), where, I is the percentage response of ‘Increase/optimism’, and D is the percentage response of ‘Decrease/pessimism’ and E is the percentage response as ‘no change/equal’ (i.e., I+D+E=100). For example, increase in production is optimism whereas decrease in cost of raw material is optimism.

The Reserve Bank has been conducting the survey of professional forecasters (SPF) since September 2007. The responses for 80th round of the survey were received during January 12-27, 2023, wherein forty-one panellists participated. The survey results are summarised in terms of their median forecasts (Annexes 1-7), along with quarterly paths for key variables. Highlights: 1. Output Real gross domestic product (GDP) is expected to grow by 6.9 per cent in 2022-23; it is expected to grow by 6.0 per cent in 2023-24 (Table 1) [these projections have remained unchanged from the last survey round]. SPF panellists placed GDP growth forecasts in the range of 6.6-7.2 per cent for 2022-23 and in the range of 5.0-7.2 per cent for 2023-24; the range for 2022-23 forecast has narrowed since the last SPF round, indicating reduced uncertainty around the median forecast as the year progressed (Annexes 1 and 2). Forecasters have assigned highest probability to real GDP growth in the range 6.5-6.9 per cent in 2022-23 (Chart 1). For 2023-24, highest probability has been assigned to the range 6.0-6.4 per cent. Note: Tail parts of the distributions are not presented in this chart but are included in Annex 6. Annual growth in real private final consumption expenditure (PFCE) and real gross fixed capital formation (GFCF) for 2023-24 are expected at 6.1 per cent and 7.0 per cent, respectively. Real gross value added (GVA) growth projection for 2023-24 has been revised down marginally to 5.8 per cent. Table 1: Median Forecast of Growth in GDP, GVA and components (in per cent)   2022-23 2023-24 Real GDP 6.9 (0.0) 6.0 (0.0) a. Real PFCE 9.5 (+0.1) 6.1 (-0.2) b. Real GFCF 11.1 (+1.2) 7.0 (0.0) Nominal PFCE 16.3 (-1.5) 11.3 (-0.1) Real GVA 6.6 (0.0) 5.8 (-0.1) a. Agriculture and Allied Activities 3.5 (+0.2) 3.1 (+0.1) b. Industry 3.2 (-1.7) 5.0 (-0.1) c. Services 8.9 (+0.7) 7.0 (-0.1) Gross Saving Rate [per cent of gross national disposable income] 28.2 (+0.2) 28.8 (-0.1) Gross Capital Formation Rate [per cent of GDP at current market prices] 31.7 (+0.3) 31.5 (0.0) Note: The figures in parentheses indicate the extent of revision in median forecasts (in percentage points) relative to the previous SPF round (applicable for all Tables). In terms of quarterly path, real GDP is expected to grow (y-o-y) by 4.6 per cent in Q3:2022-23 and moderate thereafter to 4.4 per cent in Q4:2022-23 (Table 2). It is expected in the range of 5.9-6.4 per cent during the first three quarters of 2023-24. Table 2: Median Growth Forecast of Quarterly GDP, GVA and components (in per cent)   Q3:2022-23 Q4:2022-23 Q1:2023-24 Q2:2023-24 Q3:2023-24 Real GDP 4.6 (-0.2) 4.4 (+0.1) 6.4 (-0.2) 6.0 (0.0) 5.9 a. Real PFCE 4.3 (-0.5) 5.0 (-0.2) 6.1 (+0.1) 6.1 (-0.3) 5.9 b. Real GFCF 7.7 (0.0) 6.0 (-1.0) 6.5 (0.0) 7.0 (0.0) 6.9 Real GVA 4.4 (+0.1) 4.1 (+0.1) 6.4 (+0.1) 5.7 (-0.2) 5.7 2. Inflation Annual headline inflation, based on consumer price index (CPI), is expected at 6.5 per cent for 2022-23 (Annex 1) and is likely to moderate to 5.1 per cent during 2023-24 (Annex 2). Headline CPI inflation (y-o-y) is expected at 5.7 per cent during Q4:2022-23 and moderate thereafter to 4.7 per cent by Q1:2023-24 (Table 3). During the next two quarters, it is expected to remain in the range of 5.0-5.2 per cent. CPI inflation, excluding food and beverages, pan, tobacco and intoxicants, and fuel and light, is expected at 6.0 per cent in Q4:2022-23 and soften thereafter in the range of 5.3-5.5 per cent till Q3:2023-24. Table 3: Median Forecast of Quarterly Inflation (in per cent)   Q4:2022-23 Q1:2023-24 Q2:2023-24 Q3:2023-24 CPI Combined (General) 5.7 (-0.4) 4.7 (-0.3) 5.0 (-0.2) 5.2 CPI Combined excluding food and beverages, pan, tobacco and intoxicants and fuel and light 6.0 (+0.1) 5.3 (+0.1) 5.5 (+0.2) 5.3 WPI All Commodities 3.8 (-1.9) 0.0 (-2.1) 1.9 (-1.9) 4.1 WPI Non-food Manufactured Products 2.2 (-1.7) 0.2 (-2.0) 1.6 (-1.2) 2.8 Forecasters have assigned the highest probability to CPI inflation lying in the range of 5.5-5.9 per cent in Q4:2022-23; in range of 4.5-4.9 per cent in Q1:2023-24; and in the range of 5.0-5.4 per cent during the two subsequent quarters (Chart 2). Note: Tail parts of the distributions are not presented in this chart but are included in Annex 7. 3. External Sector Merchandise exports and imports are projected to grow by 2.9 per cent and 17.8 per cent, respectively, during 2022-23 and shrink by (-)2.0 per cent and (-)1.7 per cent, respectively, during 2023-24 (Table 4). SPF panellists expect current account deficit (CAD) at 3.1 per cent (of GDP at current market prices) in 2022-23 and at 2.5 per cent in 2023-24. Table 4: Median Forecast of Select External Sector Variables   2022-23 2023-24 Merchandise Exports in US $ terms (annual growth in per cent) 2.9 (-2.7) -2.0 (-6.9) Merchandise Imports in US $ terms (annual growth in per cent) 17.8 (-0.4) -1.7 (-4.2) Current Account Balance (per cent of GDP at current market prices) -3.1 (+0.4) -2.5 (+0.2) The Reserve Bank thanks the following panellists for their participation in this round of the Survey of Professional Forecasters (SPF): Abhishek Gupta (Bloomberg Economics), Aditi Nayar (ICRA Limited), Anjali Verma (PhillipCapital India Ltd), CRISIL Ltd, Debopam Chaudhuri (Piramal Enterprise Limited), Devendra Kumar Pant (India Ratings & Research), Dhiraj Nim (ANZ), Gaura Sen Gupta (IDFC FIRST Bank), Gaurav Kapur (IndusInd Bank Limited), ICICI Securities Primary Dealership, Indranil Pan (Yes Bank), Madan Sabnavis (Bank of Baroda), Manasi Swamy (Centre for Monitoring Indian Economy Pvt. Ltd.), Nikhil Gupta (Motilal Oswal Financial Services Ltd), Prithviraj Srinivas (Axis Capital), Rajani Sinha [CareEdge (CARE Ratings Limited)], Shailesh Kejariwal (B&K Securities India Pvt Ltd), Shubhada Rao (QuantEco Research), Sudarshan Bhattacharjee (Yubi), Sujit Kumar (Union Bank of India), TAC Economics, Tirthankar Patnaik (National Stock Exchange) and Upasna Bhardwaj (Kotak Mahindra Bank). The Bank also acknowledges the contribution of eighteen other SPF panellists, who prefer to remain anonymous. Annex 1: Annual Forecasts for 2022-23   Key Macroeconomic Indicators Annual Forecasts for 2022-23 Mean Median Max Min 1st quartile 3rd quartile 1 GDP at constant (2011-12) prices: Annual Growth (per cent) 6.9 6.9 7.2 6.6 6.8 7.0 a Private Final Consumption Expenditure (PFCE) at constant (2011-12) prices: Annual Growth (per cent) 9.3 9.5 11.9 7.1 7.7 10.0 b Gross Fixed Capital Formation (GFCF) at constant (2011-12) prices: Annual Growth (per cent) 11.1 11.1 16.0 6.9 9.8 11.6 2 Private Final Consumption Expenditure (PFCE) at current prices: Annual Growth (per cent) 17.3 16.3 20.9 14.6 16.2 18.0 3 Gross Capital Formation Rate (per cent of GDP at current market prices) 31.4 31.7 33.2 29.0 31.4 31.7 4 GVA at constant (2011-12) prices: Annual Growth (per cent) 6.6 6.6 7.1 6.0 6.5 6.7 a Agriculture & Allied Activities at constant (2011-12) prices: Annual Growth (per cent) 3.6 3.5 4.4 2.7 3.4 3.8 b Industry at constant (2011-12) prices: Annual Growth (per cent) 3.2 3.2 7.0 -0.7 2.2 4.4 c Services at constant (2011-12) prices: Annual Growth (per cent) 8.8 8.9 10.2 7.0 8.6 9.1 5 Gross Saving Rate (per cent of Gross National Disposable Income) -at current prices 28.5 28.2 31.2 27.2 27.7 28.9 6 Fiscal Deficit of Central Govt. (per cent of GDP at current market prices) 6.4 6.4 6.6 5.9 6.4 6.4 7 Combined Gross Fiscal Deficit (per cent to GDP at current market prices) 9.3 9.4 10.4 7.5 9.0 9.5 8 Bank Credit of Scheduled commercial banks: Annual Growth (per cent) 14.6 15.0 16.5 7.7 14.5 15.4 9 Yield on 10-Year G-Sec of Central Govt. (end-period) 7.4 7.4 7.5 7.0 7.3 7.5 10 Yield on 91-day T-Bill of Central Govt. (end-period) 6.6 6.5 6.9 6.2 6.5 6.7 11 Merchandise Exports (BoP basis in US$ terms): Annual Growth (per cent) 4.2 2.9 40.5 -7.3 0.9 5.3 12 Merchandise Imports (BoP basis in US$ terms): Annual Growth (per cent) 18.9 17.8 60.1 8.3 16.3 19.2 13 Current Account Balance in US$ bn. -104.4 -105.0 -29.9 -132.0 -110.0 -102.6 a Current Account Balance (per cent to GDP at current market prices) -3.1 -3.1 -1.5 -3.6 -3.2 -3.0 14 Overall BoP in US$ bn. -30.7 -35.6 52.2 -74.0 -40.4 -27.0 15 Inflation based on CPI Combined: Headline 6.5 6.5 7.1 6.0 6.5 6.6 16 Inflation based on CPI Combined: excluding Food and Beverages, Pan, Tobacco and Intoxicants and Fuel and Light 6.1 6.2 6.3 5.7 6.0 6.3 17 Inflation based on WPI: All Commodities 9.7 9.6 13.8 7.5 9.5 9.8 18 Inflation based on WPI: Non-food Manufactured Products 6.3 6.1 8.5 5.7 5.9 6.3 Annex 2: Annual Forecasts for 2023-24   Key Macroeconomic Indicators Annual Forecasts for 2023-24 Mean Median Max Min 1st quartile 3rd quartile 1 GDP at constant (2011-12) prices: Annual Growth (per cent) 6.0 6.0 7.2 5.0 5.8 6.1 a Private Final Consumption Expenditure (PFCE) at constant (2011-12) prices: Annual Growth (per cent) 6.1 6.1 8.1 4.0 5.6 6.8 b Gross Fixed Capital Formation (GFCF) at constant (2011-12) prices: Annual Growth (per cent) 7.2 7.0 11.7 -0.6 6.5 7.9 2 Private Final Consumption Expenditure (PFCE) at current prices: Annual Growth (per cent) 11.6 11.3 16.9 7.0 10.8 13.1 3 Gross Capital Formation Rate (per cent of GDP at current market prices) 31.5 31.5 33.7 28.9 31.1 32.1 4 GVA at constant (2011-12) prices: Annual Growth (per cent) 5.8 5.8 6.9 4.8 5.5 6.0 a Agriculture & Allied Activities at constant (2011-12) prices: Annual Growth (per cent) 3.2 3.1 4.1 2.3 3.0 3.5 b Industry at constant (2011-12) prices: Annual Growth (per cent) 4.7 5.0 7.0 -0.1 4.1 5.6 c Services at constant (2011-12) prices: Annual Growth (per cent) 7.0 7.0 8.5 5.7 6.6 7.3 5 Gross Saving Rate (per cent of Gross National Disposable Income) -at current prices 29.0 28.8 31.5 27.5 28.0 29.6 6 Fiscal Deficit of Central Govt. (per cent of GDP at current market prices) 5.8 5.9 6.7 4.5 5.8 5.9 7 Combined Gross Fiscal Deficit (per cent to GDP at current market prices) 8.8 8.8 10.3 7.9 8.5 9.0 8 Bank Credit of Scheduled commercial banks: Annual Growth (per cent) 11.8 12.0 15.0 8.5 11.0 12.3 9 Yield on 10-Year G-Sec of Central Govt. (end-period) 7.2 7.2 7.8 6.5 7.0 7.5 10 Yield on 91-day T-Bill of Central Govt. (end-period) 6.4 6.4 6.9 5.5 6.2 6.6 11 Merchandise Exports (BoP basis in US$ terms): Annual Growth (per cent) -0.3 -2.0 15.6 -11.5 -3.9 2.7 12 Merchandise Imports (BoP basis in US$ terms): Annual Growth (per cent) -1.3 -1.7 19.1 -12.5 -5.9 1.7 13 Current Account Balance in US$ bn. -88.8 -90.0 -27.5 -125.0 -98.6 -82.8 a Current Account Balance (per cent to GDP at current market prices) -2.4 -2.5 -1.4 -3.4 -2.6 -2.2 14 Overall BoP in US$ bn. -1.0 -4.1 55.5 -48.3 -11.8 6.3 15 Inflation based on CPI Combined: Headline 5.1 5.1 6.6 4.0 5.0 5.3 16 Inflation based on CPI Combined: excluding Food and Beverages, Pan, Tobacco and Intoxicants and Fuel and Light 5.3 5.3 6.0 4.5 5.1 5.5 17 Inflation based on WPI: All Commodities 3.3 2.8 11.5 1.0 2.0 4.4 18 Inflation based on WPI: Non-food Manufactured Products 2.8 2.8 7.2 0.1 1.2 3.5 Annex 3: Quarterly Forecasts from Q3:2022-23 to Q3:2023-24   Key Macroeconomic Indicators Quarterly Forecasts Q3: 2022-23 Q4: 2022-23 Q1: 2023-24 Mean Median Max Min Mean Median Max Min Mean Median Max Min 1 GDP at constant (2011-12) prices: Annual Growth (per cent) 4.7 4.6 6.9 4.0 4.3 4.4 5.8 3.2 6.5 6.4 10.0 3.8 a Private Final Consumption Expenditure (PFCE) at constant (2011-12) prices: Annual Growth (per cent) 4.1 4.3 8.8 -0.6 4.8 5.0 8.1 -2.2 5.6 6.1 12.0 -0.6 b Gross Fixed Capital Formation (GFCF) at constant (2011-12) prices: Annual Growth (per cent) 7.9 7.7 18.0 0.7 5.6 6.0 9.0 -1.2 6.3 6.5 13.1 -2.0 2 Private Final Consumption Expenditure (PFCE) at current prices: Annual Growth (per cent) 11.0 11.2 18.0 5.4 10.4 11.2 16.6 6.2 10.7 11.1 17.2 4.5 3 Gross Fixed Capital Formation (GFCF) Rate (per cent of GDP at current market prices) 28.3 28.1 31.5 26.4 30.3 30.6 31.7 28.8 29.6 29.7 31.5 27.5 4 GVA at constant (2011-12) prices: Annual Growth (per cent) 4.4 4.4 6.1 3.7 4.1 4.1 5.4 2.7 6.5 6.4 10.2 4.3 a Agriculture & Allied Activities at constant (2011-12) prices: Annual Growth (per cent) 3.2 3.0 5.7 2.0 3.0 3.0 4.0 1.5 3.4 3.3 6.0 1.6 b Industry at constant (2011-12) prices: Annual Growth (per cent) 3.2 3.8 9.9 -1.3 2.7 2.7 7.8 -3.8 4.6 5.0 9.2 -2.2 c Services at constant (2011-12) prices: Annual Growth (per cent) 5.6 5.5 9.6 3.0 5.4 5.2 8.2 3.0 8.1 7.9 13.9 5.0 5 IIP (2011-12=100): Quarterly Average Growth (per cent) - - - - 3.2 3.6 5.7 -1.9 3.1 3.9 5.1 -3.6 6 Merchandise Exports -BoP basis (in US$ bn.) 102.8 100.0 127.1 95.6 109.6 108.1 146.4 95.4 111.5 108.8 145.0 95.6 7 Merchandise Imports -BoP basis (in US$ bn.) 176.7 175.0 207.7 170.0 177.6 177.0 236.8 158.9 178.7 179.6 226.8 158.1 8 Rupee per US $ Exchange rate (end-period) - - - - 81.7 81.9 85.0 79.1 81.8 82.0 85.0 78.5 9 Crude Oil (Indian basket) price (US $ per barrel) (end-period) - - - - 84.5 83.5 100.0 75.0 83.5 85.0 97.0 66.7 10 Policy Repo Rate (end-period) - - - - 6.45 6.50 6.50 5.65 6.45 6.50 6.50 5.40   Key Macroeconomic Indicators Quarterly Forecasts Q2: 2023-24 Q3: 2023-24 Mean Median Max Min Mean Median Max Min 1 GDP at constant (2011-12) prices: Annual Growth (per cent) 6.0 6.0 7.4 4.9 5.8 5.9 7.2 3.7 a Private Final Consumption Expenditure (PFCE) at constant (2011-12) prices: Annual Growth (per cent) 5.8 6.1 10.0 -0.1 6.2 5.9 12.0 4.2 b Gross Fixed Capital Formation (GFCF) at constant (2011-12) prices: Annual Growth (per cent) 6.4 7.0 11.0 -4.4 6.7 6.9 10.5 1.5 2 Private Final Consumption Expenditure (PFCE) at current prices: Annual Growth (per cent) 11.8 11.7 22.5 5.4 11.2 10.5 22.5 7.2 3 Gross Fixed Capital Formation (GFCF) Rate (per cent of GDP at current market prices) 30.0 30.0 32.0 28.5 28.6 28.6 32.3 26.1 4 GVA at constant (2011-12) prices: Annual Growth (per cent) 5.8 5.7 6.9 4.7 5.5 5.7 6.9 3.5 a Agriculture & Allied Activities at constant (2011-12) prices: Annual Growth (per cent) 3.0 3.0 4.4 1.0 3.1 3.1 4.1 2.0 b Industry at constant (2011-12) prices: Annual Growth (per cent) 4.9 4.9 7.6 0.9 4.8 4.8 7.9 0.8 c Services at constant (2011-12) prices: Annual Growth (per cent) 6.8 6.7 9.5 5.1 6.6 6.5 8.7 4.4 5 IIP (2011-12=100): Quarterly Average Growth (per cent) 4.5 4.1 7.0 3.0 4.5 4.4 7.0 2.9 6 Merchandise Exports -BoP basis (in US$ bn.) 111.5 109.5 144.9 92.3 112.5 108.2 160.0 86.7 7 Merchandise Imports -BoP basis (in US$ bn.) 183.6 183.2 244.3 160.0 184.5 180.8 257.0 145.6 8 Rupee per US $ Exchange rate (end-period) 81.1 81.0 84.0 77.9 80.9 81.0 84.5 77.7 9 Crude Oil (Indian basket) price (US $ per barrel) (end-period) 82.4 83.0 93.0 69.6 82.9 82.0 93.0 70.0 10 Policy Repo Rate (end-period) 6.43 6.50 6.50 5.40 6.42 6.50 6.75 5.75 Annex 4: Forecasts of CPI Combined Inflation (per cent)   CPI Combined (General) CPI Combined excluding Food and Beverages, Pan, Tobacco and Intoxicants and Fuel and Light Mean Median Max Min Mean Median Max Min Q4:2022-23 5.8 5.7 6.9 5.1 5.9 6.0 6.6 5.2 Q1:2023-24 4.8 4.7 6.6 3.7 5.3 5.3 6.3 4.8 Q2:2023-24 5.0 5.0 6.6 3.9 5.4 5.5 6.8 4.2 Q3:2023-24 5.2 5.2 6.5 3.2 5.4 5.3 6.7 4.3 Annex 5: Forecasts of WPI Inflation (per cent)   WPI All Commodities WPI Non-food Manufactured Products Mean Median Max Min Mean Median Max Min Q4:2022-23 4.3 3.8 13.4 2.8 2.5 2.2 7.5 1.2 Q1:2023-24 1.1 0.0 11.5 -1.4 0.7 0.2 7.2 -2.3 Q2:2023-24 2.8 1.9 11.5 0.6 1.8 1.6 7.2 -0.5 Q3:2023-24 4.4 4.1 12.0 2.0 3.2 2.8 7.9 1.0 Annex 6: Mean probabilities attached to possible outcomes of Real GDP growth Growth Range Forecasts for 2022-23 Forecasts for 2023-24 12.0 per cent or more 0.00 0.00 11.5 to 11.9 per cent 0.00 0.00 11.0 to 11.4 per cent 0.00 0.00 10.5 to 10.9 per cent 0.00 0.00 10.0 to 10.4 per cent 0.00 0.00 9.5 to 9.9 per cent 0.00 0.00 9.0 to 9.4 per cent 0.00 0.00 8.5 to 8.9 per cent 0.00 0.00 8.0 to 8.4 per cent 0.01 0.00 7.5 to 7.9 per cent 0.03 0.01 7.0 to 7.4 per cent 0.32 0.01 6.5 to 6.9 per cent 0.57 0.09 6.0 to 6.4 per cent 0.06 0.41 5.5 to 5.9 per cent 0.01 0.35 5.0 to 5.4 per cent 0.00 0.12 4.5 to 4.9 per cent 0.00 0.01 4.0 to 4.4 per cent 0.00 0.00 3.5 to 3.9 per cent 0.00 0.00 3.0 to 3.4 per cent 0.00 0.00 2.5 to 2.9 per cent 0.00 0.00 2.0 to 2.4 per cent 0.00 0.00 1.5 to 1.9 per cent 0.00 0.00 1.0 to 1.4 per cent 0.00 0.00 0.5 to 0.9 per cent 0.00 0.00 0.0 to 0.4 per cent 0.00 0.00 below 0.0 per cent 0.00 0.00 Note: The sum of the probabilities may not add up to one due to rounding off. Annex 7: Mean probabilities attached to possible outcomes of CPI (Combined) inflation Inflation Range Forecasts for Q4:2022-23 Forecasts for Q1:2023-24 Forecasts for Q2:2023-24 Forecasts for Q3:2023-24 9.0 per cent or above 0.00 0.00 0.00 0.00 8.5 to 9.0 per cent 0.00 0.00 0.00 0.00 8.0 to 8.4 per cent 0.01 0.00 0.00 0.00 7.5 to 7.9 per cent 0.01 0.01 0.01 0.01 7.0 to 7.4 per cent 0.02 0.01 0.01 0.02 6.5 to 6.9 per cent 0.05 0.02 0.01 0.02 6.0 to 6.4 per cent 0.18 0.04 0.05 0.04 5.5 to 5.9 per cent 0.52 0.13 0.13 0.23 5.0 to 5.4 per cent 0.21 0.22 0.34 0.41 4.5 to 4.9 per cent 0.01 0.34 0.30 0.17 4.0 to 4.4 per cent 0.00 0.21 0.12 0.04 3.5 to 3.9 per cent 0.00 0.02 0.03 0.05 3.0 to 3.4 per cent 0.00 0.00 0.00 0.02 2.5 to 2.9 per cent 0.00 0.00 0.00 0.00 2.0 to 2.4 per cent 0.00 0.00 0.00 0.00 1.5 to 1.9 per cent 0.00 0.00 0.00 0.00 1.0 to 1.4 per cent 0.00 0.00 0.00 0.00 0.5 to 0.9 per cent 0.00 0.00 0.00 0.00 0.0 to 0.4 per cent 0.00 0.00 0.00 0.00 -0.5 to -0.1 per cent 0.00 0.00 0.00 0.00 -1.0 to -0.6 per cent 0.00 0.00 0.00 0.00 Below -1.0 per cent 0.00 0.00 0.00 0.00 Note: The sum of the probabilities may not add up to one due to rounding off. Note: CPI: Consumer Price Index; GDP: Gross Domestic Products; GFCF: Gross Fixed Capital Formation; GVA: Gross Value Added; IIP: Index of Industrial Production; PFCE: Private Final Consumption Expenditure; WPI: Wholesale Price Index. 1 The survey results reflect the respondents’ views, which are not necessarily shared by the Reserve Bank. Results of the previous survey round were released on the Bank’s website on December 7, 2022.

Today, the Reserve Bank released the results of 22nd round of its quarterly Bank Lending Survey (BLS)1, which captures qualitative assessment and expectations of major scheduled commercial banks (SCBs) on credit parameters (viz., loan demand and terms & conditions of loans) for major economic sectors2. The latest round of the survey was conducted during Q3:2022-23 and collected senior loan officers’ assessment of credit parameters for Q3:2022-23 and expectations for Q4:2022-23. The survey also collected their outlook for the subsequent two quarters. Highlights: A. Assessment for Q3:2022-23 Bankers assessed better credit conditions in Q3:2022-23, driven by higher loan demand from manufacturing and services sectors (Chart 1 and Table 1). Respondents reported easing of loan terms and conditions, especially for agriculture and retail segments (Table 2). B. Expectations for Q4:2022-23 Bankers’ optimism on overall loan demand during Q4:2022-23 remained similar to previous survey round, albeit with some moderation in growth in manufacturing and personal loans. Loan terms and conditions are expected to ease further during Q4:2022-23. C. Expectations for Q1:2023-24 and Q2:2023-24 Bankers remain upbeat on loan demand during the first half of 2023-24 across the major categories of borrowers (Table 3). Easier loan terms and conditions are anticipated in Q1:2023-24 and Q2:2023-24. Table 1: Sector-wise Loan Demand - Net response3 (Per cent) Sectors Assessment Period Expectations Period Q2:2022-23 Q3:2022-23 Q3:2022-23 Q4:2022-23 All Sectors 40.0 45.0 43.3 43.3 Agriculture 38.3 33.3 41.7 41.7 Mining and Quarrying Sector 6.9 13.8 12.1 17.2 Manufacturing 41.7 43.3 48.3 41.7 Infrastructure 41.7 40.0 40.0 41.7 Services 46.7 53.3 45.0 46.7 Retail/Personal 50.0 42.6 53.6 38.9 Table 2: Sector-wise Loan Terms and Conditions - Net response (Per cent) Sectors Assessment Period Expectations Period Q2:2022-23 Q3:2022-23 Q3:2022-23 Q4:2022-23 All Sectors 5.2 10.7 12.1 14.3 Agriculture 10.0 15.0 20.0 20.0 Mining and Quarrying Sector 5.2 0.0 8.6 10.3 Manufacturing 20.7 20.0 31.0 26.7 Infrastructure 6.9 5.0 12.1 13.3 Services 22.4 19.0 22.4 17.2 Retail/Personal 19.6 24.1 28.6 29.6 Table 3: Sector-wise Expectations for extended period - Net response (Per cent) Sectors Loan Demand Loan Terms and Conditions Q1:2023-24 Q2:2023-24 Q1:2023-24 Q2:2023-24 All Sectors 46.4 48.2 17.9 23.2 Agriculture 35.7 46.4 16.1 21.4 Mining and Quarrying Sector 16.7 16.7 5.6 7.4 Manufacturing 39.3 44.6 17.9 23.2 Infrastructure 37.5 44.6 7.1 14.3 Services 46.4 51.8 16.1 19.6 Retail/Personal 42.9 51.8 21.4 21.4 Note: Please see the excel file for time series data.1 The results of 21st round of the BLS with reference period as July-September 2022 were released on the RBI website on September 30, 2022. The survey results reflect the views of the respondents, which are not necessarily shared by the Reserve Bank. 2 The survey questionnaire is canvassed among major 30 SCBs, which together account for over 90 per cent of credit by SCBs in India. 3 Net Response (NR) is computed as the difference of percentage of banks reporting increase/optimism and those reporting decrease/pessimism in respective parameter. The weights of +1.0, 0.5, 0, -0.5 and -1.0 are assigned for computing NR from aggregate per cent responses on 5-point scale, i.e., substantial increase/ considerable easing, moderate increase/ somewhat easing, no change, moderate decrease/ somewhat tightening, substantial decrease/ considerable tightening for loan demand/loan terms and conditions parameters respectively. NR ranges between -100 to 100. Any value greater than zero indicates expansion/optimism and any value less than zero indicates contraction/pessimism. Increase in loan demand is considered optimism (Tables 1), while for loan terms and conditions, a positive value of net response indicates easy terms and conditions (Table 2).

Today, the Reserve Bank released the results of 35th round of its quarterly services and infrastructure outlook survey (SIOS) conducted during Q3:2022-23. This forward-looking survey1 captures qualitative assessment and expectations of Indian companies in the services and infrastructure sectors on a set of business parameters relating to demand conditions, price situation and other business conditions. In the latest round of the survey, 1,091 companies provided their assessment for Q3:2022-23 and expectations for Q4:2022-23 as well as outlook on key parameters for the subsequent two quarters. Highlights: A. Services Sector Assessment for Q3:2022-23 Services sector enterprises assessed improvement in overall business situation and their turnover during Q3:2022-23; respondents were especially optimistic on employment and availability of finance (Chart 1 and Table A). Higher pressure stemming from cost of finance and salary outgo was assessed during Q3:2022-23; sentiments on input cost pressures recorded marginal moderation. Service companies assessed improvement in their pricing power in terms of selling prices and profit margins during Q3:2022-23. Expectations for Q4:2022-23 Respondents continue to be optimistic on overall business situation and their own turnover during Q4:2022-23; the level of optimism, however, moderated when compared with a higher net response in the previous quarter. (Chart 1 and Table A). Job landscape is likely to expand further in services sector for both full time and part time employees. Service companies expect similar cost pressures on sequential basis and polled for higher growth in both selling prices and profit margins during Q4:2022-23. Expectations for Q1:2023-24 and Q2:2023-24 Respondents remain optimistic on the services sector business conditions for the first half of 2023-24 (Table C). In tandem, job scenario is also expected to improve in ensuing quarters. Input cost pressure is likely to continue and selling prices are likely to rise during H1:2023-24. B. Infrastructure Sector Assessment for Q3:2022-23 Infrastructure companies gauged sharp uptick in overall business situation and turnover (Chart 2 and Table B). Respondents assessed notable improvement in both full-time and part-time employment conditions, resulting in higher salary outgo. Selling prices are assessed to have risen in the face of cost pressures in the sector during Q3:2022-23. Expectations for Q4:2022-23 Turnover of infrastructure companies is expected to improve further in Q4:2022-23 (Chart 2). Respondent expressed upbeat sentiments on employment conditions. Higher cost pressures are expected to stem from wage cost and finance cost in Q4:2022-23; outlook on selling prices and profit margins is more upbeat. Expectations for Q1:2023-24 and Q2:2023-24 Respondents remain optimistic on demand and employment conditions till the first half of 2023-24 (Table D). Input cost pressures are likely to persist in near term and sentiments on selling prices to remain at elevated level. Summary of Net Responses2 on Survey Parameters Table A: Services Sector (per cent) Parameters Assessment period Expectations period Q2:2022-23 Q3:2022-23 Q3:2022-23 Q4:2022-23 Overall Business Situation 40.5 48.1 53.0 50.1 Turnover 42.7 43.7 57.1 45.5 Full-time Employees 28.9 38.4 32.6 42.3 Part-time Employees 16.2 34.9 22.8 36.7 Availability of Finance 19.6 37.5 26.7 36.9 Cost of Finance -29.7 -36.1 -36.5 -36.5 Salary & Wages -43.3 -44.2 -40.9 -38.7 Cost of Inputs -42.4 -41.4 -44.5 -44.8 Selling Price 13.2 36.0 19.6 33.4 Profit Margin 2.0 35.8 26.8 39.4 Inventories 30.1 43.5 37.8 43.5 Technical/Service Capacity 21.8 37.1 27.7 37.0 Physical Investment 19.4 37.0 21.3 36.7 Table B: Infrastructure Sector (per cent) Parameters Assessment period Expectations period Q2:2022-23 Q3:2022-23 Q3:2022-23 Q4:2022-23 Overall Business Situation 30.6 49.0 45.1 50.9 Turnover 31.7 45.4 47.2 48.8 Full-time Employees 23.4 44.7 29.8 45.5 Part-time Employees 10.7 43.8 17.8 45.9 Availability of Finance 22.0 44.7 37.7 46.4 Cost of Finance -36.4 -44.9 -41.7 -43.8 Salary & Wages -27.0 -51.9 -32.5 -44.7 Cost of Inputs -44.2 -46.0 -48.7 -48.5 Selling Price 15.0 44.5 27.0 43.8 Profit Margin -1.6 44.6 16.5 45.1 Inventories 28.8 45.9 39.0 46.4 Technical/Service Capacity 19.1 44.2 25.9 44.6 Physical Investment 16.5 43.4 24.1 43.2 Expectations of Select Parameters for extended period – Net response (in per cent) Table C: Services Sector Parameter Round 34 Round 35 Q3:2022-23 Q4:2022-23 Q1:2023-24 Q2:2023-24 Overall Business Situation 53.0 50.1 50.3 49.8 Turnover 57.1 45.5 46.8 47.1 Full-time Employees 32.6 42.3 38.3 42.2 Part-time Employees 22.8 36.7 36.5 37.3 Cost of Inputs -44.5 -44.8 -44.6 -45.5 Selling Price 19.6 33.4 36.0 36.8 Table D: Infrastructure Sector Parameter Round 34 Round 35 Q3:2022-23 Q4:2022-23 Q1:2023-24 Q2:2023-24 Overall Business Situation 45.1 50.9 50.9 49.3 Turnover 47.2 48.8 48.3 48.6 Full-time Employees 29.8 45.5 45.4 43.5 Part-time Employees 17.8 45.9 44.0 45.4 Cost of Inputs -48.7 -48.5 -46.6 -46.6 Selling Price 27.0 43.8 43.6 44.3 Note: Please see the excel file for time series data. Services Sector Table S1: Assessment and Expectation for Overall Business Situation (Percentage responses)@ Quarter Assessment Expectation Better No Change Worse Net response# Better No Change Worse Net response Q3:21-22 41.9 44.3 13.8 28.2 75.3 22.3 2.4 72.9 Q4:21-22 40.7 36.0 23.4 17.3 68.3 28.2 3.5 64.8 Q1:22-23 47.0 38.3 14.7 32.2 56.6 40.1 3.3 53.4 Q2:22-23 45.9 48.7 5.4 40.5 59.6 36.7 3.7 55.9 Q3:22-23 52.4 43.3 4.3 48.1 57.4 38.1 4.4 53.0 Q4:22-23         55.0 40.0 5.0 50.1 ‘Increase’ in Overall business situation is optimistic. @: Due to rounding off percentage may not add up to 100. #: Net Response (NR) is the difference of percentage of the respondents reporting optimism and that reporting pessimism. The range is -100 to 100. Any value greater than zero indicates expansion/ optimism and any value less than zero indicates contraction/ pessimism. Table S2: Assessment and Expectation for Turnover (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 41.5 41.7 16.8 24.7 75.0 21.4 3.7 71.3 Q4:21-22 41.0 32.9 26.1 14.9 67.2 28.6 4.1 63.1 Q1:22-23 43.1 37.7 19.2 23.9 55.5 40.2 4.3 51.1 Q2:22-23 51.2 40.3 8.5 42.7 54.6 41.4 4.0 50.6 Q3:22-23 49.2 45.2 5.5 43.7 61.6 34.0 4.4 57.1 Q4:22-23         51.5 42.5 6.0 45.5 ‘Increase’ in Turnover is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table S3: Assessment and Expectation for Full-time Employees (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 23.0 65.9 11.2 11.8 55.5 41.9 2.6 52.9 Q4:21-22 20.1 61.5 18.4 1.7 49.7 47.9 2.4 47.2 Q1:22-23 28.2 57.5 14.3 13.8 27.0 68.6 4.4 22.6 Q2:22-23 35.6 57.7 6.7 28.9 29.1 67.8 3.1 26.0 Q3:22-23 42.9 52.5 4.6 38.4 38.4 55.9 5.8 32.6 Q4:22-23         47.1 48.0 4.8 42.3 ‘Increase’ in Full-time Employees is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table S4: Assessment and Expectation for Part-time Employees (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 22.6 69.9 7.4 15.2 70.3 27.0 2.7 67.6 Q4:21-22 18.5 70.4 11.1 7.4 57.5 39.7 2.7 54.8 Q1:22-23 25.2 65.9 8.9 16.3 25.0 67.8 7.2 17.8 Q2:22-23 22.2 71.8 6.0 16.2 29.0 64.5 6.6 22.4 Q3:22-23 40.1 54.8 5.1 34.9 27.8 67.3 5.0 22.8 Q4:22-23         41.8 53.1 5.1 36.7 ‘Increase’ in Part-time Employees is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table S5: Assessment and Expectation for Availability of Finance (Percentage responses) Quarter Assessment Expectation Improve No Change Worsen Net response Improve No Change Worsen Net response Q3:21-22 25.6 61.1 13.3 12.4 59.8 37.5 2.6 57.2 Q4:21-22 32.2 46.2 21.6 10.5 50.7 45.9 3.4 47.3 Q1:22-23 28.5 54.9 16.5 12.0 33.5 61.3 5.2 28.2 Q2:22-23 26.9 65.8 7.3 19.6 33.2 61.7 5.1 28.2 Q3:22-23 42.1 53.4 4.6 37.5 32.9 61.0 6.2 26.7 Q4:22-23         42.3 52.4 5.4 36.9 ‘Improve’ in Availability of Finance is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table S6: Assessment and Expectation for Cost of Finance (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 19.5 73.6 6.9 -12.6 56.0 41.2 2.7 -53.3 Q4:21-22 15.5 75.0 9.5 -6.0 43.6 54.0 2.4 -41.2 Q1:22-23 34.4 58.5 7.1 -27.3 17.3 79.9 2.8 -14.5 Q2:22-23 35.1 59.5 5.4 -29.7 31.5 66.0 2.5 -29.1 Q3:22-23 40.7 54.7 4.6 -36.1 39.7 57.1 3.2 -36.5 Q4:22-23         41.6 53.2 5.2 -36.5 ‘Decrease’ in Cost of Finance is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table S7: Assessment and Expectation for Salary/Wages (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 24.0 69.2 6.8 -17.2 53.4 44.9 1.7 -51.7 Q4:21-22 24.1 71.6 4.3 -19.8 49.6 49.3 1.1 -48.5 Q1:22-23 40.4 55.1 4.5 -35.9 37.0 62.4 0.6 -36.3 Q2:22-23 46.1 51.0 2.9 -43.3 28.4 70.5 1.1 -27.3 Q3:22-23 47.9 48.4 3.7 -44.2 42.4 56.0 1.6 -40.9 Q4:22-23         43.3 52.1 4.6 -38.7 ‘Decrease’ in Salary/Wages is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table S8: Assessment and Expectation for Cost of Inputs (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 47.5 48.5 4.0 -43.5 69.3 30.3 0.4 -68.8 Q4:21-22 63.5 32.9 3.6 -59.9 73.1 26.1 0.8 -72.4 Q1:22-23 67.0 29.9 3.2 -63.8 61.0 36.6 2.3 -58.7 Q2:22-23 46.0 50.3 3.6 -42.4 62.0 36.1 1.9 -60.2 Q3:22-23 46.1 49.2 4.7 -41.4 49.4 45.6 4.9 -44.5 Q4:22-23         50.1 44.5 5.3 -44.8 ‘Decrease’ in Cost of Inputs is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table S9: Assessment and Expectation for Selling Price (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 22.4 68.2 9.4 13.0 62.3 35.6 2.1 60.2 Q4:21-22 24.2 65.7 10.2 14.0 54.1 43.1 2.8 51.4 Q1:22-23 31.9 60.1 8.0 23.9 29.5 65.9 4.6 24.9 Q2:22-23 19.1 74.9 5.9 13.2 33.3 63.1 3.6 29.8 Q3:22-23 40.8 54.4 4.8 36.0 25.7 68.3 6.1 19.6 Q4:22-23         38.9 55.6 5.5 33.4 ‘Increase’ in Selling Price is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table S10: Assessment and Expectation for Profit Margin (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 21.2 58.3 20.5 0.7 55.0 38.8 6.2 48.8 Q4:21-22 21.2 46.4 32.4 -11.1 46.5 47.0 6.5 40.1 Q1:22-23 19.0 49.3 31.7 -12.7 28.9 61.3 9.8 19.1 Q2:22-23 21.9 58.3 19.9 2.0 30.1 58.1 11.8 18.3 Q3:22-23 41.9 52.0 6.1 35.8 36.3 54.3 9.5 26.8 Q4:22-23         44.8 49.7 5.4 39.4 ‘Increase’ in Profit Margin is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table S11: Assessment and Expectation for Inventories (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 23.5 69.0 7.5 16.0 62.8 34.8 2.4 60.4 Q4:21-22 18.9 70.6 10.6 8.3 54.9 41.8 3.4 51.5 Q1:22-23 25.4 66.7 8.0 17.4 22.9 72.5 4.7 18.2 Q2:22-23 33.7 62.7 3.6 30.1 27.5 68.9 3.6 24.0 Q3:22-23 48.3 46.9 4.8 43.5 40.5 56.8 2.7 37.8 Q4:22-23         48.8 46.0 5.2 43.5 ‘Increase’ in Inventories is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table S12: Assessment and Expectation for Technical/Service Capacity (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 23.1 72.5 4.3 18.8 73.7 25.7 0.6 73.2 Q4:21-22 23.7 71.6 4.7 18.9 65.1 34.1 0.8 64.3 Q1:22-23 25.8 71.9 2.3 23.5 31.3 66.9 1.8 29.4 Q2:22-23 24.0 73.8 2.2 21.8 33.9 63.8 2.3 31.7 Q3:22-23 41.7 53.6 4.7 37.1 29.5 68.8 1.7 27.7 Q4:22-23         41.5 53.9 4.6 37.0 ‘Increase’ in Technical/Service Capacity is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table S13: Assessment and Expectation for Physical Investment (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 20.7 74.4 4.9 15.8 68.8 30.7 0.5 68.2 Q4:21-22 20.5 74.3 5.3 15.2 61.5 37.4 1.1 60.3 Q1:22-23 25.0 72.5 2.5 22.5 27.7 69.9 2.4 25.3 Q2:22-23 21.4 76.7 2.0 19.4 32.5 66.5 1.0 31.5 Q3:22-23 41.3 54.4 4.3 37.0 22.8 75.8 1.5 21.3 Q4:22-23         41.4 53.9 4.7 36.7 ‘Increase’ in Physical Investment is optimistic. Footnotes @ and # given in Table 1 are applicable here. Infrastructure Sector Table I1: Assessment and Expectation for Overall Business Situation (Percentage responses)@ Quarter Assessment Expectation Better No Change Worse Net response# Better No Change Worse Net response Q3:21-22 41.9 44.1 14.0 27.9 71.3 26.7 2.1 69.2 Q4:21-22 46.9 29.6 23.5 23.5 75.7 19.9 4.4 71.3 Q1:22-23 46.9 26.9 26.2 20.8 59.3 34.6 6.2 53.1 Q2:22-23 41.9 46.8 11.3 30.6 53.1 36.9 10.0 43.1 Q3:22-23 55.5 38.0 6.5 49.0 49.2 46.7 4.1 45.1 Q4:22-23         56.8 37.2 6.0 50.9 ‘Increase’ in Overall business situation is optimistic. @: Due to rounding off percentage may not add up to 100. #: Net Response (NR) is the difference of percentage of the respondents reporting optimism and that reporting pessimism. The range is -100 to 100. Any value greater than zero indicates expansion/ optimism and any value less than zero indicates contraction/ pessimism. Table I2: Assessment and Expectation for Turnover (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 40.7 46.7 12.6 28.1 67.9 27.5 4.6 63.3 Q4:21-22 45.0 31.3 23.8 21.3 73.3 20.0 6.7 66.7 Q1:22-23 37.2 30.2 32.6 4.7 51.3 37.5 11.3 40.0 Q2:22-23 45.5 40.7 13.8 31.7 43.0 46.1 10.9 32.0 Q3:22-23 52.6 40.2 7.2 45.4 56.1 35.0 8.9 47.2 Q4:22-23         55.8 37.2 7.0 48.8 ‘Increase’ in Turnover is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table I3: Assessment and Expectation for Full-time Employees (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 20.1 72.4 7.5 12.7 50.0 45.8 4.2 45.8 Q4:21-22 12.5 80.0 7.5 5.0 54.5 39.6 6.0 48.5 Q1:22-23 22.7 62.5 14.8 7.8 23.1 71.8 5.1 17.9 Q2:22-23 31.5 60.5 8.1 23.4 20.6 74.6 4.8 15.9 Q3:22-23 51.2 42.3 6.5 44.7 36.4 57.0 6.6 29.8 Q4:22-23         52.4 40.7 6.9 45.5 ‘Increase’ in Full-time Employees is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table I4: Assessment and Expectation for Part-time Employees (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 24.5 74.5 1.0 23.5 69.3 28.8 2.0 67.3 Q4:21-22 4.4 88.9 6.7 -2.2 73.2 24.7 2.1 71.1 Q1:22-23 17.2 75.9 6.9 10.3 20.5 75.0 4.5 15.9 Q2:22-23 19.7 71.3 9.0 10.7 21.8 72.7 5.5 16.4 Q3:22-23 50.3 43.2 6.5 43.8 24.6 68.6 6.8 17.8 Q4:22-23         52.1 41.7 6.2 45.9 ‘Increase’ in Part-time Employees is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table I5: Assessment and Expectation for Availability of Finance (Percentage responses) Quarter Assessment Expectation Improve No Change Worsen Net response Improve No Change Worsen Net response Q3:21-22 27.6 62.7 9.7 17.9 56.1 39.7 4.2 51.9 Q4:21-22 31.3 46.3 22.5 8.8 66.4 29.1 4.5 61.9 Q1:22-23 29.5 49.6 20.9 8.5 28.8 67.5 3.8 25.0 Q2:22-23 30.9 60.2 8.9 22.0 33.9 59.8 6.3 27.6 Q3:22-23 50.5 43.7 5.8 44.7 43.4 50.8 5.7 37.7 Q4:22-23         52.2 41.9 5.8 46.4 ‘Improve’ in Availability of Finance is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table I6: Assessment and Expectation for Cost of Finance (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 24.2 71.9 3.9 -20.3 49.8 47.7 2.6 -47.2 Q4:21-22 27.4 67.1 5.5 -21.9 59.4 38.3 2.3 -57.0 Q1:22-23 43.0 51.2 5.8 -37.2 26.8 71.8 1.4 -25.4 Q2:22-23 43.8 48.8 7.4 -36.4 39.8 58.5 1.7 -38.1 Q3:22-23 51.0 42.8 6.2 -44.9 47.5 46.7 5.8 -41.7 Q4:22-23         49.7 44.5 5.8 -43.8 ‘Decrease’ in Cost of Finance is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table I7: Assessment and Expectation for Salary/Wages (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 22.4 73.9 3.7 -18.7 51.3 46.2 2.5 -48.7 Q4:21-22 23.8 72.5 3.8 -20.0 59.0 41.0 0.0 -59.0 Q1:22-23 38.5 55.4 6.2 -32.3 38.8 60.0 1.3 -37.5 Q2:22-23 31.1 64.8 4.1 -27.0 20.8 76.9 2.3 -18.5 Q3:22-23 56.3 39.2 4.4 -51.9 35.0 62.4 2.6 -32.5 Q4:22-23         50.5 43.6 5.8 -44.7 ‘Decrease’ in Salary/Wages is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table I8: Assessment and Expectation for Cost of Inputs (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 53.8 46.2 0.0 -53.8 76.5 23.0 0.4 -76.1 Q4:21-22 77.5 19.7 2.8 -74.6 83.1 15.4 1.5 -81.5 Q1:22-23 79.5 19.7 0.8 -78.7 80.3 18.3 1.4 -78.9 Q2:22-23 50.0 44.2 5.8 -44.2 76.0 23.1 0.8 -75.2 Q3:22-23 52.2 41.6 6.2 -46.0 53.0 42.7 4.3 -48.7 Q4:22-23         55.3 37.8 6.9 -48.5 ‘Decrease’ in Cost of Inputs is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table I9: Assessment and Expectation for Selling Price (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 27.0 67.6 5.4 21.6 59.9 38.1 2.0 57.9 Q4:21-22 21.4 73.2 5.4 16.1 66.4 32.7 0.9 65.5 Q1:22-23 32.2 54.0 13.8 18.4 25.0 73.2 1.8 23.2 Q2:22-23 27.5 60.0 12.5 15.0 34.1 62.4 3.5 30.6 Q3:22-23 51.4 41.8 6.8 44.5 32.2 62.6 5.2 27.0 Q4:22-23         50.3 43.1 6.6 43.8 ‘Increase’ in Selling Price is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table I10: Assessment and Expectation for Profit Margin (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 26.5 52.9 20.6 5.9 49.8 43.5 6.7 43.1 Q4:21-22 19.0 35.4 45.6 -26.6 57.4 33.1 9.6 47.8 Q1:22-23 13.8 34.6 51.5 -37.7 27.8 57.0 15.2 12.7 Q2:22-23 22.0 54.5 23.6 -1.6 22.5 62.0 15.5 7.0 Q3:22-23 52.2 40.1 7.6 44.6 34.7 47.1 18.2 16.5 Q4:22-23         52.8 39.6 7.6 45.1 ‘Increase’ in Profit Margin is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table I11: Assessment and Expectation for Inventories (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 26.3 69.3 4.4 21.9 58.6 36.5 5.0 53.6 Q4:21-22 19.1 74.5 6.4 12.8 64.9 31.6 3.5 61.4 Q1:22-23 20.9 70.1 9.0 11.9 24.4 71.1 4.4 20.0 Q2:22-23 36.4 55.9 7.6 28.8 25.8 71.2 3.0 22.7 Q3:22-23 52.4 41.0 6.6 45.9 45.8 47.5 6.8 39.0 Q4:22-23         53.6 39.2 7.2 46.4 ‘Increase’ in Inventories is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table I12: Assessment and Expectation for Technical/Service Capacity (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 27.5 71.4 1.1 26.4 82.1 16.4 1.5 80.6 Q4:21-22 28.6 60.7 10.7 17.9 76.7 22.2 1.1 75.6 Q1:22-23 23.5 73.5 2.9 20.6 32.1 64.3 3.6 28.6 Q2:22-23 25.5 68.2 6.4 19.1 29.4 67.6 2.9 26.5 Q3:22-23 50.2 43.9 6.0 44.2 27.7 70.5 1.8 25.9 Q4:22-23         50.5 43.5 6.0 44.6 ‘Increase’ in Technical/Service Capacity is optimistic. Footnotes @ and # given in Table 1 are applicable here. Table I13: Assessment and Expectation for Physical Investment (Percentage responses) Quarter Assessment Expectation Increase No Change Decrease Net response Increase No Change Decrease Net response Q3:21-22 30.1 68.8 1.1 29.0 73.6 23.6 2.8 70.8 Q4:21-22 17.2 75.9 6.9 10.3 77.4 20.4 2.2 75.3 Q1:22-23 27.0 67.6 5.4 21.6 24.1 69.0 6.9 17.2 Q2:22-23 22.0 72.5 5.5 16.5 38.9 58.3 2.8 36.1 Q3:22-23 49.7 44.1 6.3 43.4 26.9 70.4 2.8 24.1 Q4:22-23         49.8 43.6 6.6 43.2 ‘Increase’ in Physical Investment is optimistic. Footnotes @ and # given in Table 1 are applicable here. 1 The survey results reflect the respondents’ views, which are not necessarily shared by the Reserve Bank. Results of the previous survey round were released on the Bank’s website on September 30, 2022. 2 Net Response (NR) is the difference between the percentage of respondents reporting optimism and those reporting pessimism. It ranges between -100 to 100. Positive value indicates expansion/optimism and negative value indicates contraction/pessimism. In other words, NR = (I – D); where, I is the percentage response of ‘Increase/optimism’, D is the percentage response of ‘Decrease/pessimism’ and E is the percentage response as ‘no change/ equal’ (i.e., I+D+E=100). For example, increase in turnover is optimism whereas decrease in cost of inputs is optimism.

Published for the Treasury Select Committee hearing on 9 February 2023

See the headline results from an October 2022 survey of 27 financial institutions that are active in the UK foreign exchange market.

HM Treasury and the Bank of England are consulting on a potential digital pound, or central bank digital currency (CBDC).

Published for the Treasury Select Committee hearing on 9 February 2023

Monetary Policy Summary and minutes of the Monetary Policy Committee meeting

The Securities Lending Committee is a forum for market participants and authorities to discuss the UK securities lending market.

Letter from the Governor to the Chancellor

Exchange of letters between the Governor and the Chancellor

The Money Markets Committee is a forum for market participants and authorities to discuss the UK unsecured deposits and funding market and securities lending and repo markets.

The Bank has today completed its sales of the £19.3bn portfolio of temporary holdings of UK government bonds purchased in Autumn 2022 on financial stability grounds.

The Bank's Court of Directors acts as a unitary board, setting the organisation's strategy and budget and taking key decisions on resourcing and appointments. Required to meet a minimum seven times per year, it has five executive members from the Bank and up to nine non-executive members.

The UK Money Markets Code Sub-Committee meets regularly to review and update the UK Money Markets Code.

Randall Kroszner has been appointed as an external member of the Financial Policy Committee (FPC), the Chancellor of the Exchequer, Jeremy Hunt, has announced today.

The Working Group on Sterling Risk-Free Reference Rates, which is comprised of a diverse set of market participants, is working to assist in finalising the transition away from LIBOR.

The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have fined TSB Bank plc (“TSB”)

The ECB meeting came largely in line with expectations. While leaving the policy rates unchanged, the members confirmed that the PEPP program would end in March 2022. Meanwhile, they have extended the reinvestment process and topped up the APP program, as means to continuously provide liquidity to the market. The staff economic projections saw sharp […] The post ECB Reduces PEPP Purchases, Upgrades Inflation forecasts appeared first on Action Forex.

The BOE surprised the market in two consecutive months. After failing to deliver rate hike in November, the members surprisingly increased the Bank rate by +15 bps to 0.25% in December. Concerns over elevated trumped Omicron variant uncertainty. British pound rallied against US dollar and the euro. The members voted 8-1 to increase the Bank […] The post BOE Hikes Bank Rate, Surprising the Market Two Months in a Row appeared first on Action Forex.

FOMC delivered a hawkish outlook at the December meeting. Besides doubling the size of tapering as we had anticipated, more than two-third of the members have projected at least 3 rate hikes next year. The latest economic projections suggest that inflation could rise to +5.3% this year before easing. Both headline and core CPI are […] The post Hawkish Fed Anticipates Three or More Rate Hikes Next Year appeared first on Action Forex.

The focus of this week’s ECB meeting is whether the PEPP would extend beyond March 2020 in light of the new Omicron variant and rapid increase the number of coronavirus cases across Europe since the November meeting. Recent comments from ECB officials signal that things would go as planned. The latest economic projections would also […] The post ECB Preview – Phase-Out of PEPP by March as Scheduled appeared first on Action Forex.

We expect the BOE to stand pat at this week’s meeting. October’s GDP came in weaker than expected, and the renewed restrictive measures to curb spread of the new Omicron variant could affect household consumption and put a brake on the job market improvement. We expect policymakers to wait for more certainty about the development […] The post BOE Preview – Delaying Rate Hike to February 2022 appeared first on Action Forex.

The Fed this week will announce acceleration of QE tapering. With inflation approaching 7%, policymakers would likely revise its view on inflation outlook and “retire” the word “transitory”. The updated economic projections and median dot plots showing members’ interest rate projections would also be released. The Fed funds rate will stay a 0-0.25% until mid-2022. […] The post FOMC Preview – Fed to Double Size of QE Tapering appeared first on Action Forex.

Following a hawkish move in October, we expect the BOC to keep the powder dry this week. Policymakers should acknowledge the strong GDP growth and job market data, while cautioning over the uncertainty of the Omicron variant. They are also expected to reiterate the stance that the rate hike would come once the economic slack […] The post BOC Preview – Reiterating Rate Hike in First Half 2022 amidst Strong Economic Data appeared first on Action Forex.

The RBA left the cash rate unchanged at 0.1% and the asset purchase program at AUD 4B/week. Policymakers maintained a cautiously optimistic outlook over economic recovery despite Omicron uncertainty. Again, policymakers reiterated that the next meeting (February) would be the time to discuss the pace of QE purchases. The central bank remained cautiously optimistic over […] The post RBA Stayed Put, Cautiously Optimistic Over Domestic Economy appeared first on Action Forex.

The RBA is widely expected to leave the cash rate unchanged at 0.1%. Given the mixed economic data flow since the last meeting, the uncertainty of the Omicron variant and the scheduled discussion about asset purchases in February, policymakers would stand pat at the upcoming meeting. They would also reinstate that a rate hike next […] The post RBA Preview – Keeping Powder Dry on Mixed Data and Omicron Uncertainty appeared first on Action Forex.

Despite concerns over the new coronavirus variant Omicron, Fed Chair Jay Powell’s testimony before the Senate was hawkish. He suggested that the Fed could accelerate the tapering of asset purchases in order to curb strong inflation. US dollar extended rally against major currencies, with the exception of Japanese yen and Swiss franc. The testimony is […] The post Hawkish Powell Expects Fed to End QE Tapering a Few Months Earlier than Previously Anticipated appeared first on Action Forex.

The RBNZ raised the OCR by +25 bps to 0.75%, as we had anticipated. Policymakers sounded more cautiously about the economic outlook while reiterating the stance of continued reduction of stimulus. Kiwi extended recent correction after the announcement. On the monetary policy outlook, the central bank reiterated that “it remains appropriate to continue reducing monetary […] The post RBNZ Hiked Rate but More Cautious about Economic Outlook appeared first on Action Forex.

The RBNZ is ready to increase the policy rate again this week. The question is whether, in light of the latest strong inflation data, whether the hike is +25 bps or +50 bps. We continue to expect the former. Several banks have lifted the mortgage rates, while bond yields have risen after October’s rate hike. […] The post RBNZ To Lift Policy Rate Again after Strong Inflation appeared first on Action Forex.

The latest ECB bulletin, European Commission’s latest inflation projections and the preliminary inflation data for October rekindled ECB’s rate hike speculations. At the ECB bulletin, policymakers acknowledged that strong inflation proves more persistent than previously anticipated. Yet, they expected that it would fade next year. As noted in the report, the present inflationary pressure has […] The post Rate Hike Speculations Heighten as Eurozone’s Inflation Accelerates Further appeared first on Action Forex.

We were surprised that the Committee voted with overwhelming majority to leave the Bank rate at 0.1%. Despite Governor Andrew Bailey’s hawkish comments ahead of the meeting, the was one of those who voted to leave the policy rate unchanged. The BOE also decided to leave the QE program at 875B pound. On the economic […] The post Market Disappointed at BOE Left Bank at Historic Low. Downgraded Growth Forecast appeared first on Action Forex.

As widely anticipated, the Fed announced to taper its QE program. The Fed funds rate was kept unchanged at 0-0.25%. US dollar retreated after the meeting as the Fed continued to view inflation as “transitory” and did not appear to think that a rate hike was imminent. On economic developments, policymakers acknowledged that the number […] The post Fed Will Start Reducing Asset Purchases in Coming Weeks. Not in a Rush to Raise Rate appeared first on Action Forex.

Federal Reserve Board issues enforcement action with Riverbend Financial Corporation

Lael Brainard submits resignation as Vice Chair and a member of the Federal Reserve Board, effective on or around February 20, 2023

Federal Reserve Board releases hypothetical scenarios for its 2023 bank stress tests

Federal Reserve Board announces appointment of Joshua Gallin as secretary of the Federal Open Market Committee

Federal Open Market Committee reaffirms its "Statement on Longer-Run Goals and Monetary Policy Strategy"

Federal Reserve issues FOMC statement

Federal Reserve Board announces denial of application by Custodia Bank, Inc. to become a member of the Federal Reserve System

Federal Reserve Board issues policy statement to promote a level playing field for all banks with a federal supervisor, regardless of deposit insurance status

Federal Reserve Board announces it has fined Popular Bank $2.3 million for processing six Paycheck Protection Program (PPP) loans despite having detected that the loan applications contained significant indications of potential fraud

Chair Powell tested positive for COVID-19, is vaccinated, has mild symptoms, and is working remotely

Federal Reserve Board announces approval of application by Bank of Montreal and BMO Financial Corp.

Federal Reserve Board provides additional details on how its pilot climate scenario analysis exercise will be conducted and the information on risk management practices that will be gathered over the course of the exercise

Federal Reserve Board releases results of survey of senior financial officers at banks about their strategies and practices for managing reserve balances

Federal Reserve Board announces Reserve Bank income and expense data and transfers to the Treasury for 2022

Federal Reserve Board announces the designation of the Chairs and Deputy Chairs of the 12 Federal Reserve Banks for 2023

Speech At the Sadie Collective Research Reception, Washington, D.C.

Speech At the Midwest Cyber Workshop, organized by the Federal Reserve Banks of Chicago, Kansas City, and St. Louis

Speech At the American Bankers Association Community Banking Conference, Orlando, Florida

Speech At the Global Interdependence Center Conference: Digital Money, Decentralized Finance, and the Puzzle of Crypto, La Jolla, California

Speech At the 2023 Arkansas State University Agribusiness Conference, Jonesboro, Arkansas

Speech At the Hope Economic Mobility Forum at Jackson State University, Jackson, Mississippi

Speech At the “110 Years of Deltas Embracing the Past while Shaping the Future” event, Norfolk, Virginia

Speech At the C. Peter McColough Series on International Economics, Council on Foreign Relations, New York, New York

Speech At the University of Chicago Booth School of Business, Chicago, Illinois

Speech At the Florida Bankers Association Leadership Luncheon Events, Miami, Florida

Speech At the Symposium on Central Bank Independence, Sveriges Riksbank, Stockholm, Sweden

Speech At the 2023 Allied Social Science Associations (ASSA) Annual Meeting, New Orleans, Louisiana

Speech At the American Enterprise Institute, Washington, D.C. (virtual)

Speech At the Hutchins Center on Fiscal and Monetary Policy, Brookings Institution, Washington, D.C.

Speech At the Detroit Economic Club, Detroit, Michigan

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

The purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

Call for Papers

Call for papers

Call for papers

Call for papers

The aim of the conference is to promote policy-relevant research in this field, by bringing together researchers from academia, central banks, international institutions, and the financial industry

Witnesses: Andrew Bailey, Huw Pill, Silvana Tenreyro and Jonathan Haskel

The Royal Economic Society’s Women’s Committee launched the new UK Women in Economics Network (UK WEN), with support from the Bank of England

Online Q&A session

Virtual event

Witness: Randy Kroszner

Witnesses: Andrew Bailey, Sam Woods, Jon Hall and Collette Bowe

Witness: Andrew Bailey, Governor

Witnesses: Andrew Bailey, Ben Broadbent, Catherine L Mann and Swati Dhingra

The Bank of Canada, Bank of England, Board of Governors of the Federal Reserve System and European Central Bank

Witness: Huw Pill