Highlights of Monetary Management and Financial Intermediation (Economic Survey Part II)
| Relevancy |
- G.S. Paper 2
- Highlights of Monetary Management and Financial Intermediation
Highlights of Monetary Management and Financial Intermediation
- The Reserve Bank of India cut the policy rate by 50 basis points during 2016-17.
- However, it shifted its monetary policy stance from accommodative to neutral in February 2017.
- As of August 2017 Repo rate stood at 6.00 per cent and reverse repo rate at 5.75 per cent.
- Monetary aggregates decelerated significantly following the withdrawal of legal tender status of specified bank notes on November 9, 2016.
- As of 31st March 2017, currency in circulation contracted by 19.7 per cent whereas reserve money contracted by 12.9 per cent.
- Credit off-take from banks continued to decelerate further. During 2016-17, gross bank credit outstanding grew at around 7 per cent on an average.
- The average gross bank credit to industry contracted by 0.2 per cent in the FY 2016-17.
- Sluggish growth and increasing indebtedness in some sectors of the economy have impacted the asset quality of banks and this is a cause for concern.
- The gross non-performing advances (GNPAs) ratio of SCBs rose from 9.2 per cent in September 2016 to 9.5 per cent in March 2017.
- Financial inclusion is proceeding apace under the Pradhan Mantri Jan Dhan Yojana.
- Zero balance accounts under PMJDY has declined consistently from nearly 58 per cent in March 2015 to around 24 per cent as of December 2016.