rates

EPF interest rate hiked to 8.6%
Interest rate on Employees’ Provident Fund will be increased from 8.25% to 8.6% in the current fiscal. The Employees’
Provident Fund Organisation (EPFO) had brought down the rate of interest to 8.25% for 2011-12 from 9.5% provided in
2010-11.
The retirement fund body EPFO has parked in excess of Rs 55,000 Crore in the Special Deposit Schemes, aimed at
providing better returns to non-government provident funds and other such funds.






India’s public debt rose by 4.9 per cent to 3752576 crore rupees during the first quarter (April-June) of fiscal year 2012

Reserve Bank of India on 18 September 2012 injected a liquidity of around Rs 17000 crore by slashing down the Cash Reserve Ratio (CRR) by 25 basis points to 4.50 percent from 4.75 percent. The indicative policy rates were remained at its original level. The repo rate, state-term policy rate and reverse repo rate remained unchanged with 8 and 7 percent respectively.

The RBI stated following its mid-term review of the monetary policy that with increased risks of growth and inflation. In the situation, where there is a persistent inflammatory pressure of fiscal and current deficits constraints, there exists a need of a stronger policy targeting growth risks. The monetary policies are of great use in reviving the growth rate as per the expectations of the market. 

The Cash Reserve Ratio (CRR) will come into effect from 22 September 2012. So far in 2012, RBI has slashed the CRR by 150 basis points. Cash Reserve Ratio, basically is a portion of deposits that the banks are supposed to keep with the central bank (RBI), these deposits doesn’t earn any interest the depositing bank. Repo Rate is a rate at which the central bank offer funds to the borrowing banks, whereas the reverse repo rate is the rate of parking the funds available by the banks with the central bank.

The Wholesale Price Index (WPI) have been moving around 7.5 percent across the financial year, without much changes and so is the condition of Consumer Price Index (CPI) that has been rotating around 10 percent in spite of price hike in food items.

Wholesale Price Index (WPI) means the price fixed as a representative for a wholesale grain. In India, WPI is used for monitoring inflation. Consumer Price Index (CPI) is a statistical estimate that helps in measurement of price change of services and consumer goods purchased by the households.

RBI cuts SLR, releases Rs 60,000 crore
 RBI slashed the Statutory Liquidity Ratio (SLR) by 1 percentage point from 24 % to 23 % which is expected to
provide liquidity of around Rs 60, 000 crore.
 It kept the major indicative policy rates unchanged while it slashed the gross domestic product (GDP) projections
for the current financial year from 7.3 % to 6.5 % and raised the inflation forecast from 6.5 % to 7 %.
 India’s is facing a slowing growth and increasing inflation problem.
 The Repo rate is untouched at 8%.
 The Cash Reserve Ratio (CRR) is at 4.75 %.
 The cut in SLR is expected to ensure that liquidity pressures do not hamper the flow of credit to the productive
sectors of the economy. The move will facilitate banks to shift their portfolio in favor of the private sector.