The benchmark indices settled over 0.5 per cent lower on Thursday on expiry of September series Futures and Options (F&O) contracts. The S&P BSE Sensex ended at 36,324, down 218 points, while the broader Nifty50 index settled at 10,978, down 76 points. Among sectoral indices, the Nifty Bank index settled 1.3 per cent lower due to a fall in the shares of YES Bank, which cracked 9 per cent to end at Rs 203.60.
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- Duty on aviation turbine fuel to hit airlines; fares likely to go up.
- NAVAL’s eligibility question holds up warship orders worth Rs 630 bn.
- Plunging rupee prompts India to raise taxes on goods worth Rs 860 billion.
- Edible oil prices to remain firm on rising import cost, low inventory.
RBI ready to step in with liquidity support for the banking system :
The Reserve Bank of India (RBI) on Thursday said it was ready to provide necessary liquidity support in the banking system and allowed banks to borrow two percentage points more for their liquidity coverage ratio using government securities as collateral. Money market rates have short up due to liquidity shortage in the system, and generally, the mutual fund (MF) industry is aversed to buying short-term papers of NBFCs after IL&FS started defaulting on its obligation.
“It has been decided to permit banks with effect from October 1, 2018, to reckon government securities held by them up to another 2 per cent of their NDTL, under FALLCR (Facility to Avail Liquidity for Liquidity Coverage Ratio) within the mandatory SLR requirement, as Level 1 HQLA (high quality liquid assets) for the purpose of computing their LCR,” RBI said in a notification on its website.
The FALLCR will now be 13 per cent, from 11 per cent earlier.
“This should supplement the ability of individual banks to avail of liquidity, if required, from the repo markets against high-quality collateral. This, in turn, will help improve the distribution of liquidity in the financial system as a whole,” the central bank said in a separate statement.