RBI’s market operations helped banks in funding during Covid, says the study

's market operations helped banks in funding

RBI’s normal market performance in line with monetary policy stance has helped the banking system to balance the financial needs of various economic sectors during the Covid-hit 2020-2021, a study published by the central bank said on Thursday.

Strong analysis shows that the fragile economic conditions and the value of the underlying assets are encouraging banks to increase their investment in government securities that boost the portfolio of portfolio recovery, he said.

At the same time, the increase in investment by government securities banks in the face of high government lending fills private debt and has a powerful effect on banks with high-performing debts, while restoring high-value banks and at times strong economic growth.

“Therefore, a robust analysis, raises the possibility of both re-evaluating the portfolio and downtime gaming channels and policies aimed at strengthening the asset quality and financial position of banks could lead to improved bank credit flow in productive sectors,” the paper said.

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