BUSINESS
Indian banking’s held back by inadequacy of long-term funding
RBI has eased short-term liquidity pressures through various tools, but these are no substitute for the stable, long-term funding banks need to support credit growth. The core issue is long-term availability of stable funding—mainly through deposits or long-term bond issuance. India’s banking system is in a delicate balance—supported by liquidity interventions but hindered by long-term funding gaps
BUSINESS
Aligning With The Target: Is RBI signalling a change in its inflation targeting strategy?
On June 8, the RBI introduced a new phrase to communicate its future strategy — aligning with the inflation target. The introduction of this new terminology could inadvertently create ambiguity which could end up hurting the credibility of the inflation targeting framework
BUSINESS
Is the good run of the Indian banking sector over?
FY2023 saw an unusual confluence of factors all of which resulted in extraordinary performance for Indian banks, after a prolonged phase of banking sector woes. The road ahead seems bumpier
BUSINESS
SVB crisis has brought the trade-off between price stability and financial stability back into focus
Should a monetary authority take financial stability into account when setting its monetary policy or be guided by the mandated objectives of inflation control and economic growth?
INDIA
Liquidity Management | The difficult art of smooth landing
If inflation pressures keep rising, at some point the RBI will need to withdraw the excess liquidity. While it is relatively easy for a central bank to infuse abundant liquidity, it is significantly harder to come out of it
BUSINESS
More banking does not need more banks
It would be a giant leap of faith to believe that the new banks backed by return-seeking private capital will target the segments and geographies left unserved or underserved by the established large banks
