Mumbai: Can I pledge my shares and get a loan, As per the decisions taken in the Reserve Bank of India’s monetary policy review meeting, companies have been allowed to provide loans and equity-based loans for mergers and acquisitions.
Loans of up to Rs 1 crore can be availed by pledging shares
The Monetary Policy Committee (MPC) meeting, chaired by Reserve Bank of India Governor Sanjay Malhotra, was held in Mumbai for three consecutive days from the 29th to yesterday.
In this, it was decided to keep the repo rate for banks unchanged at 5.50 percent. Regarding other decisions taken, Malhotra said,
Increasing credit limit
The Reserve Bank has come forward to increase the credit limit for equity investments and Indian companies and relax the norms.
Accordingly, the maximum limit for borrowing against shares is planned to be increased from the current Rs 20 lakh to Rs 1 crore. The credit limit for applying for fresh issue of shares has been increased from Rs 10 lakh to Rs 1 crore. It has also been decided to increase it to Rs 25 lakh.
This will benefit retail investors, especially high net worth individuals.
It has been decided to allow domestic private and public sector banks to provide loans for mergers and acquisitions of Indian companies.
Currently, only non-banking financial institutions, foreign banks and private equity firms are allowed to provide loans for this.
After receiving feedback from the industry, the final regulations in this regard will be issued soon.
There is a rule that exporters have to use the proceeds earned in foreign currency for imports within a month or repatriate it.
It has been decided to extend this deadline by three months.
Free digital services
The Reserve Bank of India (RBI) has announced that digital banking services will now be provided free of cost to customers holding bank accounts that are not required to maintain a minimum average monthly balance.
It has also expanded the services offered to these accounts.
Globalisation of the Rupee
The Reserve Bank of India has taken steps to increase the use of the rupee in cross-border transactions.
Accordingly, authorized banks have been allowed to provide loans in Indian rupees to NRIs residing in Bhutan, Nepal and Sri Lanka.
Other decisions taken in the meeting
Repo rate to remain at 5.50 per cent
GDP growth forecast for the current fiscal has been increased from 6.50 per cent to 6.80 per cent
Inflation forecast has been reduced from 3.10 per cent to 2.60 per cent
GST reforms to have a strong impact on inflation and growth
US tariffs to hit the country’s exports
Current account deficit to be manageable on strong services exports and continued increase in remittances
Forex reserves at Rs 61.62 lakh crore are sufficient to cover imports for the next 11 months
Steps to avoid excessive fluctuations in Indian rupee against the US dollar
The next Monetary Policy Committee meeting will be held from December 3-5.
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