We want transparent retail forex trading platform: RBI

MUMBAI: The Reserve Bank is contemplating a transparent foreign exchange trading platform with a view to encouraging retail participation, saying it would lead to better price discovery.

"The Clearing Corporation of India Limited (CCIL) will develop access to its platform FX-CLEAR through an internetbased application. A discussion paper on the proposal will be issued by end-october 2017 for public comments," said a statement on developmental and regulatory policies by the Reserve Bank of India.

It observed that the issue of transparent and fair pricing for retail users including Micro, Small and Medium Enterprises in the foreign exchange market has been raised in various fora.

"A mechanism is proposed for improving the pricing outcome for the retail user to be defined in terms of transaction size under which client pricing is directly determined in the market by providing customers with access to an interbank electronic trading platform where offers from clients and banks can be matched anonymously and automatically," it said. Such a mechanism will provide transparency while enhancing competition and lead to better pricing for customers, it said.

The statement further said that a High-level Task Force on Public Credit Registry (PCR) for India has been constituted under the chairmanship of Y M Deosthalee, former CMD of L&T Finance Holdings.

The Task Force is expected to submit its report by April 4.

RBI has also decided to make it mandatory for corporate borrowers having aggregate loan exposure of Rs 5 crore and above from any bank to obtain Legal Entity Identifier registration and capture the same in the Central Repository of Information on Large Credits. MUMBAI: To make electronic payments efficient and more secure, the Reserve Bank of India on Wednesday said it will issue revised directions by October 11 to allow 'inter- operability' among prepaid payment instruments (PPIS).

PPIS are substitute of paper currency or cash that prepaid payments industry issues in the form of paper coupons, mobile wallets or electronic formats.

It is expected that PPIS can inter-operate within six months of the revised directions, RBI said in the 'Statement on Developmental and Regulatory Policies' on Wednesday.

"Inter-operability amongst KYC compliant PPIS shall be implemented within six months of the date of issuance of the revised master directions, which will be issued within a week, i.e., by October 11, 2017," it said.

The first guidelines for issuance and operations of PPIS came in April 2009 with the objective to create an ecosystem and earlier in March this year, the RBI asked for feedback on the PPI industry so far.

"The feedback received has been examined and it has been decided to rationalise the operational guidelines with a view to encouraging competition and innovation, and strengthening safety and security of operations, besides improving customer grievance redressal mechanisms," the RBI said.

The RBI said revised framework will pay the way for interoperability into usage of PPIS, as per the vision for Payment and Settlement Systems in the country. The vision envisages for India to migrate to electronic payments and ensure that such payments are safe, secure, authorised, efficient and accessible. Among others, the regulator has also eased processes for cooperative banks to open current account with the RBI that will enable them to maintain sufficient liquid funds for clearing or settlement, transactions of government securities, remittance services and currency chest operations.

As of now, non-scheduled cooperative banks (NSCBS) face problems in opening current accounts with the RBI due to certain prescribed requirements.

Reviewing directions on short selling in government securities (g-secs), the RBI said a short seller will not be needed not borrow securities for notional short sales when it is held in the held-for-trading/available-for-sale/held-tomaturity portfolios of banks. It has also allowed settlement of G-secs by foreign portfolio investors (FPIS) on T+1 or T+2 basis. Further, to boost retail participation in G-secs, RBI in consultation with capital market regulator Sebi has allowed specified stock exchanges, in addition to banks and primary dealers, to act as aggregators for retail investor bids in noncompetitive segment for g-secs and treasury bills. NEW DELHI: The finance ministry on Wednesday said it has taken note of the RBI decision to maintain status quo on interest rate and the downward revision of growth forecast for the current fiscal. The ministry said: "We have noted that this decision has been made by the MPC in light of the underlying analysis which implies – a downward revision of the real GVA growth forecast for 2017-18 from 7.3% to 6.7%, which leads to a widening of the output gap...

"A marginally upward revision of the CPI inflation forecast for the second half of the year meaning an average inflation for the year 2017-18 as a whole of less than 4%." MUMBAI: The rupee on Wednesday staged a stellar comeback to end at a fresh oneweek high of 65.01 against the US dollar with investors taking a bullish stance on the economy even as the RBI kept key rates unchanged.

Stamping its second biggest one-day rally for the year - the home currency garnered a solid 49 paise, or 0.75 per cent.

Frantic unwinding of the American currency by banks and corporates along with upbeat equities predominantly weighed on the rupee trade amid broad based dollar selling in Asia. The rupee was under severe pressure last week and touched a 6-1/2 month low 65.89 during intraday. Forex market sentiment got a boost after core sector growth MUMBAI: The Reserve Bank on Wednesday flayed lenders for keeping interest rates high and flagged concerns over base rate and marginal cost of fundbased lending rate (MCLR), saying these have not improved monetary transmission.

An internal RBI group also suggested switching over to an external benchmark in a timebound manner so that better rates are available to borrowers.

"The RBI study group has observed that internal benchmarks such as the base rate/ MCLR have not delivered effective transmission of the monetary policy," RBI said in a report on Wednesday.

The group was constituted by RBI to study various aspects rebounded to a five-month high 4.9 per cent in August also supported by robust manufacturing PMI data. The rupee opened on a strong note at 65.37 at the Forex market and maintained its buoyant momentum throughout the day amid easing dollar pressure. of the MCLR system from the perspective of improving the policy transmission.

RBI introduced MCLR on April 1, 2016 after finding that the then prevailing base rate had failed to achieve the objectives of easier and faster policy transmission. Before the MCLR was rolled out, the banks were following a more rigid base rate system, which came into force on July 1, 2010 replacing the banks' prime lending rate.

The study group submitted its report on September 25.

"Arbitrariness in calculating the base rate/mclr and spreads charged over them has undermined the integrity of the interest rate setting process," the study group has observed. MUMBAI: Stocks ended in positive territory on Wednesday underpinned by ratesensitive realty and banking shares after the Reserve Bank decided to hold rates in line with expectations.

The BSE Sensex ended up 174.33 points, or 0.55 per cent, at 31,671.71. The gauge had gained 337.57 points in the previous three sessions.

The NSE Nifty followed suit and regained the key 9,900mark before closing up 55.40 points, or 0.56 per cent, at 9,914.90.