Latest news with #G-secs
Economic Times
13 hours ago
- Business
- Economic Times
Will eased KYC norms revive foreign investment in Indian sovereign bonds?
Mumbai: India's regulatory latitude on compliance and KYC norms for foreign funds buying only sovereign bonds is expected to burnish the allure of an asset class already featuring in global gauges, although an immediate halt to recent outflows would require worldwide rate dynamics and geopolitical risks to settle in favour of the emerging markets. ADVERTISEMENT "Considering that the Indian economy is growing and the market is coming up the maturity curve with inclusion in global indices, it is quite logical for making the investing route easier for FPIs," said Divaspati Singh, partner at Khaitan & Co. According to a senior official at a foreign bank, there has been a long-pending demand to ease the operational issues around reporting and KYC. On Wednesday, Sebi approved the proposal to relax certain regulatory requirements for all existing and prospective foreign portfolio investors that exclusively invest in G-Secs. Overseas investors have been shedding Indian bonds of late. Easing of the KYC norms are unlikely to lead to an immediate trend reversal. "While this may not see a sudden spurt of inflows, it does make life easier for FPIs participating only in G-secs," Singh overseas banker expects long-term benefits from Sebi's move. (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
13 hours ago
- Business
- Time of India
Will eased KYC norms revive foreign investment in Indian sovereign bonds?
Mumbai: India's regulatory latitude on compliance and KYC norms for foreign funds buying only sovereign bonds is expected to burnish the allure of an asset class already featuring in global gauges, although an immediate halt to recent outflows would require worldwide rate dynamics and geopolitical risks to settle in favour of the emerging markets. "Considering that the Indian economy is growing and the market is coming up the maturity curve with inclusion in global indices, it is quite logical for making the investing route easier for FPIs," said Divaspati Singh, partner at Khaitan & Co. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Chi phí cấy ghép răng là bao nhiêu vào năm 2025 (kiểm tra giá) Cấy ghép răng | Quảng cáo tìm kiếm Tìm hiểu thêm Undo According to a senior official at a foreign bank, there has been a long-pending demand to ease the operational issues around reporting and KYC. On Wednesday, Sebi approved the proposal to relax certain regulatory requirements for all existing and prospective foreign portfolio investors that exclusively invest in G-Secs. Bonds Corner Powered By Will eased KYC norms revive foreign investment in Indian sovereign bonds? India's relaxation of KYC norms for foreign funds investing solely in sovereign bonds aims to enhance the appeal of this asset class, already included in global indices. While easing operational issues is a welcome step, an immediate reversal of recent outflows hinges on favorable global rate dynamics and reduced geopolitical risks. Experts anticipate long-term benefits for FPI participation in G-secs. India's Larsen & Toubro may explore another ESG bond issue after debut attracts premium, spokesperson says Indian bond yields marginally higher; focus on oil, debt supply Sebi eases norms for foreign investors who only buy government bonds Lending yields set to shrink in FY26 as banks play it safe Browse all Bonds News with Overseas investors have been shedding Indian bonds of late. Easing of the KYC norms are unlikely to lead to an immediate trend reversal. "While this may not see a sudden spurt of inflows, it does make life easier for FPIs participating only in G-secs," Singh said. An overseas banker expects long-term benefits from Sebi's move. Live Events
The Hindu
2 days ago
- Business
- The Hindu
Founders can now hold employee stock options post listing, says SEBI
In a bid to increase ease of doing business for market participants, the Securities and Exchange Board of India (SEBI) has approved proposals to allow founders to hold employee stock options even after listing, relax regulations for alternative investment funds (AIF), and allow public sector undertakings (PSUs) with minimal public shareholding to delist, among other actions. In its board meeting that concluded on Wednesday, the markets regulator said that founders or promoters can now continue to benefit from employee stock options even after listing, if they started receiving them at least one year prior to filing for IPOs. Aiding reverse flipping Moreover, compulsory convertible securities (CCS) will be exempted from a minimum shareholding period of one year, akin to equity shares. This will assist companies contemplating reverse flipping. Reverse flipping is when Indian start-ups, originally incorporated overseas, move their headquarters and ownership back to India. The regulation will now also include relevant persons other than just the founders. Category I and II AIFs can now offer co-investment schemes (CIV) to 'facilitate AIFs and investors to co invest' and 'support capital formation in unlisted companies,' according to a statement from SEBI. This initiative is in addition to the existing opinion for accredited investors to co-invest in unlisted entities through portfolio management system (PMS). Angel investors The board also approved proposals to ensure that only angel investors would need to be accredited investors (AI) now. Moreover, AIs will be included as qualified institutional buyers (QIBs) for the limited purpose of investments into angel funds. The floor and cap on investments by angel investors has been changed to ₹10 lakh to ₹25 crore. Earlier, this threshold was ₹25 lakh to ₹10 crore. In addition to these, SEBI also offered settlement opportunity for venture capitalists (VCs) to migrate to AIF regulations. The markets watchdog has also enabled PSUs, in which the Government of India holds more than 90% stake, to be delisted. 'There are five such companies,' SEBI Chairperson Tuhin Kanta Pandey said during a briefing. In addition to these, the regulator also brought in other regulations that relaxed compliance for foreign portfolio investments (FPIs) exclusively investing in G-secs, simplified documents for qualified institutional placements (QIPs), and rationalisation of merchant banking regulations.
India Gazette
2 days ago
- Business
- India Gazette
Govt's net borrowings under control, show steady trend: SBI Report
New Delhi, June 18 (ANI): India's market borrowing program has seen a stable and orderly evolution in recent years, with net borrowings remaining under control despite the country's growing economic needs. Data from a report by SBI showed that the government is actively managing its debt through various instruments while adhering to fiscal discipline under the FRBM Act. It said, 'G sec borrowing trend.... Keeping the borrowings in check.' As per the data, gross market borrowing through government securities (G-secs) is estimated at Rs 14.8 lakh crore in the Budget Estimates for FY26, while net borrowing is projected at Rs 11.5 lakh crore. So far in FY26, the government has raised Rs 3.2 lakh crore as gross borrowing, and Rs 2.4 lakh crore as net borrowing. In the previous financial year (FY25), gross borrowing stood at Rs 14.0 lakh crore, while net borrowing was Rs 10.7 lakh crore. Similarly, FY24 had seen gross borrowing of Rs 15.4 lakh crore and net borrowing of Rs 10.7 lakh crore. This shows that while gross borrowing fluctuates with fiscal needs, net borrowing is being kept largely in check. The report also highlighted that the outstanding stock of government debt through G-secs has steadily risen over the past decade, from Rs 41.6 lakh crore in FY15 to Rs 114.5 lakh crore so far in FY26. However, this surge has been managed with caution, and the government is making genuine efforts to reduce overall debt levels. The debt-to-GDP ratio is estimated at 57.1 per cent for 2024-25 and is projected to decline to 56.1 per cent in 2025-26, as per the FRBM guidelines. To fine-tune its borrowing profile, the report mentioned that the government is also using debt switch and buyback operations. In FY26, switch borrowings are budgeted at Rs 2.5 lakh crore, and buybacks have already accounted for Rs 0.5 lakh crore. In past years, switch operations ranged from Rs 0.3 to Rs 2.0 lakh crore, depending on the fiscal strategy. In the context of banking and finance, a debt switch typically refers to a transaction where a borrower exchanges one type of debt security for another, often with the goal of restructuring debt obligations or managing liquidity. While the buyback operations typically refer to the repurchase of government securities or corporate bonds by central bank (RBI). On this the SBI report noted a dichotomy in current trends. While issuing more short-term papers may support immediate funding needs for a fast-growing economy, it could lead to higher redemption pressure in the medium term. The report outlined that while India's public debt has grown in absolute terms, the government's prudent fiscal management, stable borrowing trends, and strategic tools like debt switches and buybacks are helping maintain long-term sustainability. With net borrowings under control and efforts aligned with FRBM targets, the overall debt outlook looks disciplined. (ANI)
Mint
12-06-2025
- Business
- Mint
RBI cut interest rates: How will it impact personal loan interest rates?
On 6th June 2025, the RBI cut the repo rate by 50 basis points and the Cash Reserve Ratio (CRR) by 100 basis points. It was RBI's third repo rate cut in successive Monetary Policy Committee (MPC) meetings since February 2025. The interest rate cuts are expected to bring down interest rates on personal loans and other loans. In this article, we will understand what the repo rate is, the repo rate cuts by the RBI, and how it will impact personal loan interest rates. Before understanding the impact of RBI repo rate cuts on loan interest rates, let us first understand what is the repo rate. The repo rate or the Repurchase Rate is the rate at which banks borrow money from the Reserve Bank of India (RBI). The money is borrowed by offering Government Securities (G-secs) as collateral to the RBI. The borrowing bank later buys back the G-secs from the RBI at a higher rate, including the interest amount calculated as per the repo rate. On 6th June 2025, the RBI cut the repo rate by 50 basis points from 6% to 5.5%. It is the RBI's biggest repo rate in the last few years. Before that, the RBI cut the repo rate from 6.5% to 6.25% in February 2025, and further from 6.25% to 6.0% in April 2025. Apart from the repo rate cut, the RBI announced the CRR cut by 100 basis points. It will be done in four equal tranches of 25 basis points each on 6th September, 4th October, 1st November, and 29th November. A cut in the repo rate has a direct impact on the personal loan interest rates. When the repo rate is cut, it lowers the cost of borrowing for banks. When the cost of funds falls for banks, they can lend to customers at a lower rate. Thus, when the repo rate decreases, the interest rates on personal loans and other loans go down. The RBI's move to cut the repo rate by 100 basis points or 1% since February 2025 is good news for personal loan borrowers. The borrowers can expect a cut in interest rates on personal loans. If banks lower the interest rates on personal loans by 100 basis points, it will result in huge interest rate savings for borrowers. Let us understand the savings in interest amount with an example. Kareena wants to take a Rs. 10 lakh personal loan for a tenure of 5 years. At a 12% interest rate, Kareena will have to pay an Equated Monthly Instalment (EMI) of Rs. 22,244. She will pay a total of Rs. 13,34,667 to the bank through 60 EMIs. Thus, the total interest paid by Kareena on the 5-year personal loan will be Rs. 3,34,667. Now, suppose the bank reduces the personal loan interest rate to 11% after the 100-basis points repo rate cut by the RBI. For the same Rs. 10 lakh personal loan of 5 years, Kareena's EMI will fall to Rs. 21,742. She will pay a total of Rs. 13,04,545 to the bank through 60 EMIs. The total interest paid by Kareen on the 5-year personal loan will be Rs. 3,04,545. With the personal loan interest rate falling from 12% to 11%, Kareena's EMI will fall from Rs. 22,244 to Rs. 21,742. Thus, she will save Rs. 502 every month on her EMI. The total interest paid over the 5-year personal loan will fall from Rs. 3,34,667 to Rs. 3,04,545. Thus, she will have interest savings of Rs. 30,122 over the entire loan tenure. The table below shows the savings due to changes in personal loan interest rates due to a cut in the repo rate. Personal loan amount & tenure Rs. 10,00,000 for 5 years Rs. 10,00,000 for 5 years Interest rate 12% 11% EMI Rs. 22,244 Rs. 21,742 EMI saving Rs. 502 Total interest paid over 5 years Rs. 3,34,667 Rs. 3,04,545 Total interest savings Rs. 30,122 The above-expected interest rate cuts are not just limited to personal loans. The cuts in Repo Rate are expected to lead to a cut in interest rates on most loans like home loans, vehicle loans, business loans, etc. One of the important objectives of the RBI is to keep inflation at 4% with a tolerance band of 2 to 6% (+ or – 2%). For April 2025, the CPI inflation rate was at 3.16%, well below the RBI's target rate of 4%. The lower inflation rate gave the RBI the elbow room to cut interest rates. The RBI expects the CPI inflation to be 3.7% for FY 2025-26. It is within the RBI's target rate of 4%. However, during his 6th June Monetary Policy statement, the Governor mentioned that after the 100-basis points repo rate cut since February 2025, the RBI is left with limited space to support growth. Hence, the MPC has changed its stance from accommodative to neutral. Going ahead, the MPC will assess the incoming economic data for future course of action. Thus, going ahead, repo rate cuts, if any, will depend on the inflation rate and other economic data. As mentioned earlier, there is limited scope for any further repo rate cuts in the near future. It will all depend on how inflation behaves. Banks will pass on the repo rate cut benefit to their customers in the form of lower interest rates on personal loans and other loans. Hence, if you are looking for a personal loan, consider going for it. Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. He can be reached at LinkedIn.
