ISSUE: 933 2025 13 June 2025

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Retail inflation dips to 2.82% in May, lowest

since Feb 2019: Retail inflation based on Consumer
Price Index (CPI) dipped to 2.82 per cent in May as
against 3.16 per cent in April, government reported on
Thursday. May’s headline number is the lowest year-on-
year inflation since February 2019. Year-on-year inflation rate based on
All India Consumer Food Price Index (CFPI) for the month of May, 2025
over May, 2024 is 0.99 per cent. Corresponding inflation rate for rural
and urban are 0.95 per cent and 0.96 per cent respectively. A sharp
decline of 79 basis point is observed in food inflation in May, 2025 in
comparison to April, 2025. The food inflation in May, 2025 is the lowest
after October, 2021.
(Business Line)
India, China signal willingness to resume rare earth magnet
talks: In a significant development that could ease pressure on global
industrial supply chains, both India and China on Thursday indicated
readiness to engage in dialogue aimed at normalising the disrupted trade
in rare earth magnets, which is a vital component in sectors ranging from
automobiles to semiconductors. The breakthrough comes after months of
strained supply following China’s imposition of export controls on key
rare earth elements (REE), which has impacted manufacturing sectors
worldwide. Chinese foreign ministry spokesperson Lin Jian said during a
media briefing in Beijing that China is open to enhancing dialogue and
cooperation with relevant countries to ensure stability in global industrial
and supply chains, PTI reported. “We are willing to enhance dialogue and
cooperation with relevant countries and regions to jointly keep the
stability of global industrial and supply chains,” Lin said, responding to a
question on whether Beijing was prepared to lift export restrictions on
REEs to India, after it began clearing export licences for the US and the
European Union.
(Financial Express)
Sensex, Nifty decline amid geopolitical tension and trade
uncertainty: Indian equities declined on Thursday amid uncertainty
surrounding the US–China trade deal and rising geopolitical tensions.
The Sensex ended at 81,692, a decline of 823 points or 1 per cent. The
Nifty, meanwhile, ended the session at 24,888, a fall of 253 points or 1.01
per cent. Investors were jittery despite US President Donald Trump's
claim on Wednesday that a tariff framework with China had been
reached. Concerns about elevated geopolitical tensions further dented
sentiment after Iran said it would strike US bases in the Middle East if
nuclear talks failed.
(Business Standard)

New India Assurance likely primary insurer

for Air India plane crash; hull insurance
likely up to $300 million: New India Assurance
is likely the primary domestic insurer for the Air
India plane that crashed at Ahmedabad Airport,
according to sources familiar with the matter.
Typically, for large aviation risks such as this,
domestic insurers retain a minimal share and transfer significant
exposure to global reinsurance markets. Around 5 percent of the hull
claim will likely be ceded to India's GIC Re as a part of the mandatory
domestic reinsurance requirement, while the remaining bulk of the risk is
likely to be reinsured internationally, with AIG London likely to lead the
program, sources indicated. Insurance payouts in such cases are
categorised under two main heads: Hull insurance and passenger
liability. The hull claim, which refers to the compensation the airline
received is often equivalent to the aircraft's market value. In this case, the
aircraft hull alone can be valued between $200 to $300 million, and
liability coverage, especially for flights operating in or to regions like
Europe—typically exceeds $500 million. Passenger liability in such cases
falls under third-party liability insurance, which covers compensation for
death, injury, and baggage loss in line with the Montreal Convention and
India’s Carriage by Air Act.
(Moneycontrol)
RBI to tighten remittance rules, bar offshore time deposits: The
Reserve Bank of India (RBI) plans to tighten rules for overseas
remittances by resident Indians, barring them from holding foreign
currency deposits with lock-in periods, two government sources said. RBI
will amend regulations to prevent overseas transfers from being used to
park money in time deposits or other interest-bearing accounts abroad,
one of the sources said. “This is akin to passive wealth shifting, which is a
red flag for the RBI in a still-controlled capital regime,” the first source
familiar with the thinking of the central bank said. The proposed changes
reflect India's cautious stance on a rise in outward remittances and full
convertibility of the rupee, as authorities strive to safeguard foreign
exchange reserves and manage currency volatility, the sources said.
Overseas investments by individuals fall under the central bank's
Liberalised Remittance Scheme (LRS) — which allows resident Indians to
remit up to $250,000 in a single year — for purposes ranging from
foreign education, travel, equity and debt investments to medical
treatments.
(Business Line)
FSIB recommends R Doraiswamy as MD and CEO of LIC: The
Financial Services Institutions Bureau (FSIB) has recommended
Doraiswamy Ramchandran (R. Doraiswamy), the current Managing
Director of Life Insurance Corporation of India (LIC) for the position of
Chief Executive Officer and Managing Director (CEO & MD) at LIC. FSIB
interviewed four candidates from Life Insurance Corporation of India
(LIC) on June 11, 2025 for the position of CEO & MD in LIC. “Keeping in
view their performance in the interface, their overall experience and the
extant parameters, the Bureau recommends R Doraiswamy for the
position of CEO & MD in LIC,” said FSIB.
(Economic Times)
RBI allows KYC updation for low-risk customers till 30 June
2026: The Reserve Bank of India (RBI) has directed regulated entities to
continue allowing transactions for individual “low-risk” customers, while
ensuring their Know Your Customer (KYC) details are updated by 30
June 2026 or within one year of falling due, whichever is later. The
decision comes as the regulator has observed a large pendency in periodic
updation of KYC including in the accounts opened for credit of Direct
Benefit Transfer under government schemes to facilitate credit of direct
DBTs and/or scholarship amount and accounts opened under Pradhan
Mantri Jan Dhan Yojana (PMJDY).
(Business Standard)

Air India crash: Tata Group announces Rs 1

crore for kin of each victim: Tata Group chairman
N Chandrasekaran on Wednesday announced Rs 1
crore for the families of each victim who died in the
tragic Air India plane crash in Ahmedabad. "We are
deeply anguished by the tragic event involving Air
India Flight 171. No words can adequately express the
grief we feel at this moment. Our thoughts and prayers are with the
families who have lost their loved ones, and with those who have been
injured," Chandrasekaran said in a post on X. He said the Tata Group,
which owns the airline, will provide Rs 1 crore to the families of each
person who lost their life in the tragedy. "We will also cover the medical
expenses of those injured and ensure that they receive all necessary care
and support. Additionally, we will provide support in the building up of
the B J Medical's hostel," the chairman added.
(Moneycontrol)
Aviation stocks fall after Air India Boeing 787 crash kills over
200: The shares of aviation stocks in India and those of aircraft
manufacturer Boeing declined on Thursday after a fatal crash of a Boeing
787 Dreamliner operated by Air India left more than 200 people dead.
The flight, which was bound for London from Ahmedabad, crashed
shortly after take-off in what is termed the worst accident involving
Boeing’s twin-aisle aircraft. The flight had 242 passengers and crew. The
shares of Indian aviation firms declined. The stock of InterGlobe
Aviation, which owns IndiGo, fell by 2.7 per cent, while that of SpiceJet
declined by 1.8 per cent.
(Business Standard)
Canara Bank to raise up to ₹9,500 crore capital through bond
issuance: Canara Bank’s Board of Directors, at its meeting held on 12
June 2025, approved a capital raising plan for the financial year 2025–
26, amounting to up to ₹9,500 crore. The capital will be raised through
the issuance of debt instruments, specifically Basel III-compliant
Additional Tier I (AT1) and Tier II bonds. The initiative is aimed at
strengthening the bank’s capital adequacy, supporting future business
growth and ensuring compliance with Basel III norms.
(Business Standard)

RBI introduces STRIPS in state-government

bonds: The Reserve Bank of India (RBI) on June 12
allowed Separate Trading of Registered Interest and
Principal of Securities (STRIPS) in State
Government Securities (SGS). This decision was
taken based on consultation with the State
Governments/Union Territories and the feedback
received from market participants, RBI said in a release. STRIPS are
basically "zero-coupon" securities where the investor receives a payment
at maturity only. STRIPS allow investors to hold and trade the individual
interest and principal components of eligible Government securities as
separate securities of varying tenure. The central bank said all fixed
coupon securities issued by State Governments/Union Territories having
a residual maturity of up to 14 years and minimum outstanding of Rs
1,000 crore as on the day of stripping, provided that such securities are
reckoned as eligible investment for the purpose of meeting Statutory
Liquidity Ratio (SLR) requirements and are transferable.
(Moneycontrol)
Curbing frauds: Sebi brings more checks for investors via valid
UPI handle: Amid rising instances of unregistered entities defrauding
investors, SEBI has rolled out a new initiative, with the help of NPCI,
under which investors will be able to verify if the entity to which they are
transferring money is registered with Sebi or not. The new “@valid”
handle for registered entities will go live from October 1, 2025. Only
registered and authentic entities will be able to secure this handle
through banks. All registered intermediaries have been mandated to
obtain the new UPI IDs.
(Business Standard)
RBI skips 14-day main liquidity operation for third straight
fortnight: The Reserve Bank of India has decided not to conduct the 14-
day main operation under the liquidity management framework
scheduled for Friday, it said in a statement on Thursday. The decision
was made following "a review of the current and evolving liquidity
conditions" marking the third consecutive fortnight that the central bank
has skipped the main 14-day operation. Market participants had expected
the RBI to conduct a 14-day variable rate repo auction on Friday on
account of the upcoming tax outflows which are seen sucking out rupee
funds from the banking system.
(Business Standard)

RBI KEY RATES FOREX EQUITY

/COMM. MARKET
Repo Rate: 5.50% INR / 1 USD : 85.5353 Sensex: 81691.98 (-823.16)
SDF: 5.25% INR / 1 GBP : 116.0392 NIFTY: 24888.20 (-253.20)
MSF /Bank Rate: 5.75% INR / 1 EUR : 98.5475 Bnk NIFTY: 56082.55 (-377.20)
CRR: 4.00% INR /100 JPY: 59.5200
SLR: 18.00%
BUSINESS/FINANCIAL CONCEPTS
COINSURANCE
 Coinsurance is the amount, generally expressed as a fixed percentage,
an insured must pay toward a covered claim after the deductible is
satisfied. It is common in health insurance.
 Some property insurance policies also contain coinsurance provisions.
In this case, coinsurance is the amount of coverage that the property
owner must purchase for a structure.
 Coinsurance is the percentage under an insurance plan that the insured
person pays toward a covered expense or service.
 The coinsurance clause in a property insurance policy requires that a
home is insured for a percentage of its total cash or replacement value.

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