The e-rupee is really taking off — and growing faster than UPI or crypto
The e-rupee is really taking off — and growing faster than UPI or crypto
RBI's Digital Rupee is still in its pilot phase, but already looks like a big hit. TOI explains what this currency is all about
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Mint
24 minutes ago
- Mint
RBI's rate cut may not bring immediate EMI relief for all borrowers
The Reserve Bank of India (RBI) has cut the repo rate by 50 basis points (bps) and the cash reserve ratio (CRR) by 100 bps, raising hopes among borrowers of lower EMIs. But rate cuts by the central bank don't automatically translate into immediate relief for all loan categories. The actual transmission, whether faster, slower, or none at all, will depend on multiple factors, including the type of loan, when it was taken, the lending institution, and the benchmark it is linked to. Fixed or floating: the nature of your loan matters Certain loan categories — particularly personal loans and credit card debt — are typically offered at fixed interest rates. The rate set at the time of disbursement remains unchanged through the tenure of the loan, regardless of RBI's policy moves. Read this | Mint Explainer: RBI cuts repo rate by 50 bps. How will it impact lenders and borrowers? 'Most lenders offer loans in these categories as fixed-rate loans. Then there are categories, which are more of a mixed bag. For example, loans such as car loans and loans against securities," said Adhil Shetty, chief executive officer of BankBazaar. To be sure, some public sector banks even offer personal loans with a floating rate option. When it comes to car loans or loans against securities, the interest rate may be fixed or floating. If floating, these are linked either to internal or external benchmarks set by the banks. Since 1 October 2019, all new floating-rate loans must be linked to external benchmarks. However, older loans are often tied to internal benchmarks. According to RBI's Annual Report 2024-25, 35.9% of floating-rate loans are still linked to the marginal cost of funds-based lending rate (MCLR), an internal this: How you can get a loan against an insurance policy Home loans are predominantly floating-rate products, while fixed-rate options are also available. Borrowers who took home loans after October 2019 are generally linked to external benchmarks, while older loans may still be tied to MCLR. This distinction is crucial in determining how quickly borrowers benefit from the RBI's latest repo cut. MCLR vs EBLR: how your benchmark affects transmission For loans linked to MCLR, the transmission is typically delayed due to reset cycles, which may occur annually or half-yearly depending on the bank. Even though the RBI provides the formula for calculating MCLR, banks apply their own internal cost structures to arrive at their minimum lending rates. 'While the formula for calculating MCLR is given by the RBI, it is an internal benchmark, which means it will vary across banks. Banks will use their internal costs and calculation of risks to decide their minimum lending rate under MCLR framework. The variables include cost of funds for the banks (deposits), other borrowings, return on net worth, operating costs, tenor premium (longer loan tenor would mean higher risk premium) and negative carry from RBI's cash reserve ratio," explained Joydeep Sen, corporate trainer and author. The CRR, the percentage of deposits banks are required to maintain with the RBI, results in negative carry because these funds typically earn lower returns. Banks are allowed to factor this into their MCLR calculations. By contrast, loans under the external benchmark lending rate (EBLR) regime, most commonly linked to RBI's repo rate, usually see faster transmission. The repo-linked lending rate (RLLR) adjusts more swiftly, typically on a quarterly reset this: How you can get loan against mutual funds without breaking it As the repo-linked lending rate (RLLR) is directly linked to RBI's repo rate, it will usually lead to full quantum of repo cut getting passed onto the borrowers and the transmission is likely to happen faster as the EBLR framework follows quarterly reset cycle. NBFC loans: more flexibility, less transmission certainty For borrowers with loans from non-bank financial companies (NBFCs), the picture is more complex. While NBFCs are regulated by RBI, they are not mandated to follow the benchmark frameworks applicable to banks. 'NBFCs have their internal models to determine their base rates. These rates are influenced by factors such as cost of funds, overhead costs and asset-liability mismatches," pointed out Jagadeesh Mohan, founder of EMI Saver and former PhonePe executive. For NBFCs, assets are the loans they have extended, and liabilities are funds borrowed from banks, debt markets, or depositors. Asset-liability mismatches occur when most borrowings are of short tenure, while loans extended have longer tenures. Also read: How stock market investors can use liquid ETFs to manage cash Additionally, NBFCs can set their own reset frequencies. Existing borrowers may not necessarily benefit from RBI's repo cut, or the impact may be limited depending on the lender's funding costs, competition, and business strategy. 'NBFCs with better credit ratings might be better placed to pass on the benefits of RBI's repo cut due to the lower cost of raising funds on account of their credit rating and better access to funds through their distribution channel," said Abhishek Kumar, a registered investment advisor and founder of SahajMoney.
Time of India
an hour ago
- Time of India
Cybersecurity boost: Banks, RBI move to launch Digital Fraud Detection Platform amid soaring crimes - All you need to know
This is an AI-generated image, used for representational purposes only. In a concerted push to tackle the rising wave of digital payment frauds, major public and private sector banks are collaborating with the Reserve Bank of India (RBI) to develop a Digital Payment Intelligence Platform (DPIP), a new Digital Public Infrastructure aimed at enhancing fraud risk management As per the news agency PTI, the proposed platform will enable real-time intelligence sharing and data analysis to detect and prevent fraudulent digital transactions. According to sources, the RBI-led initiative is a top priority and is expected to go live in the coming months. The Reserve Bank Innovation Hub (RBIH) has been tasked with building a prototype of DPIP in consultation with 5–10 banks. 'Fraud is a common monster,' a source said, underlining why both public and private banks are being roped in to co-develop the platform. A high-level meeting was recently held to finalise its institutional structure, with participation from senior bank executives and RBI officials. The platform comes in response to a sharp spike in fraud cases. As per the RBI's latest annual report, bank frauds jumped nearly threefold to Rs 36,014 crore in FY25, compared to Rs 12,230 crore a year ago. Public sector banks reported Rs 25,667 crore worth of frauds—up from Rs 9,254 crore in FY24. While card and internet payment frauds dominated in the private sector, public sector banks faced large-scale fraud in their loan portfolios. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Aparat de sudură cu laser de 9000 W (4 în 1) – o revoluție în sudură! Află mai multe Undo A few weeks ago, Airtel approached over 40 banks, RBI and NPCI, proposing collaboration to create a repository of known fraudulent domains to enable proactive blocking of rogue sites. The telecom major also highlighted risks posed by OTT messaging platforms, calling them the weakest link in fraud prevention due to lack of regulatory oversight. Airtel Vice Chairman and MD Gopal Vittal, in a letter to NPCI MD & CEO Dilip Asbe, proposed 'closer collaboration to create a repository of known fraudulent financial domains,' and favoured joint public awareness campaigns and technical cooperation to counter online scams. 'The external threat landscape is evolving rapidly. Systems like are useful, but still reactive,' Vittal wrote to the RBI, stressing that fraud must be stopped at the first step—when a user attempts to access a malicious site. The telco's proposal received positive responses from banks and the NPCI, sources said. Airtel has also sought to join forces with Jio and Vodafone Idea to initiate a joint industry-level defence against telecom-based scams. In the first nine months of 2024 alone, India reported over 1.7 million cybercrime complaints, resulting in losses exceeding Rs 11,000 crore. These figures underscore the urgency of building a coordinated, tech-driven ecosystem like DPIP to shield consumers and financial systems from the growing digital threat. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
an hour ago
- Time of India
Automation in Bengaluru's kitchens: Hotels seek solutions to South Indian cook shortage
Representative Image BENGALURU: As demand for South Indian cuisine surges and hotels face a cook shortage, many are seeking new ways to integrate advanced technology into their kitchens. While automation in the hotel industry is not a new concept, it is now entering a new phase, with a focus on further automating tasks traditionally done by human hands. "Particularly South Indian cooks are hard to find," says PC Rao, Honorary President, Bangalore Hotels Association (BHA). "We have machines for vada-making, pongal preparation, and more, but there's still a need for someone to measure the ingredients and feed them into the machines. It is not 100% mechanised yet." He was talking to TOI on the sidelines of the launch of Media Day Marketing trade expo where equipment industries will meet the hospitality sector. Echoing his sentiments, President of Bangalore Hotels Association, Subrahmanya Holla said, "It's interesting how things will unfold, and we're also waiting to see." Holla, whose own hotel still favours a hands-on approach, acknowledges that machines can be a good solution for bulk production, such as in catering. "Vada making makes sense in high-volume business. Pongal machines are already in use. But you can't fully mechanise everything. Some things still require ahuman touch, like pouring ghee and sugar, in a Mysore Pak production line," Holla shares. K Rama Murthy, owner of Konark Hotel on Residency Road, who was in the industry for over 40 years, addresses the challenges in complete automation of South Indian food. "South Indian food is passed down generationally. It is not something we can easily put in a syllabus for students. Hence, while the automation of beverage preparation, like cocktail mixing, is already common, the same is harder to achieve with food. For Indian food, especially South Indian items, it is made to order." He finds the fresh food production segment at a crossroads. New manpower laws have made hiring and retaining fresh-food staff more challenging, shrinking the pool of cooks willing to learn complex, made-to-order South Indian recipes. Advanced solutions like freeze-drying plants or vacuum-packed ready-cook systems are emerging to retain higher nutrition levels, but are expensive, he added. At his hotel, he uses automation. Murthy elaborates on the same: Three-star hotels in the city have adopted this technology—a combi-oven, which can cook with steam and dry heat—giving you rice, steam veg, pulao, any rice item—bisibele bath and pongal. You can roast masalas in the machine in a systematic way. There are limitations—shallow frying and traditional methods, like masala dosa preparation, or making sambar. For Uddina vadas, there is a separate machine—the dough gets dropped like doughnuts. "We also have an in-house South Indian filter dispensing machine, and are looking for idli dropping and cooking systems," he said, being the go-to person on automation in the sector. Hospitality students are also training on the growing role of AI in the sector, including streamlining kitchen operations. Sanchari Chowdhury, Director at IIHM Bangalore, said, "Although human touch is still very much needed in hospitality, AI helps in menu planning, stock taking, and ingredient percentages, making the process faster. Even experiences are curated using tech—a Japanese restaurant in the city has automated the process of learning its guest's food and seating preference. " "We are in a city that has accepted automation well," she adds. "Key cards in hotels are replaced by mobile check-ins. Roles in hospitality are changing—but the warm body is very needed in hospitality even today."
