Chinmaya IAS Academy – Current Affairs Chinmaya IAS Academy – Current Affairs
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Reserve Bank of India Deputy Governor Viral Acharya assured that the central bank was ready to stand as the lender of last resort in the context of liquidity needs of the non-banking finance sector. At the same time, Mr. Acharya said the present situation did not warrant any drastic steps given the health of the Indian economy. The Deputy Governor’s comments come in the wake of sector facing a crisis of confidence. “The Reserve Bank also stands ready to be the lender of last resort that is provided that kind of conditions warrant that sort of extreme measure,” Dr. Acharya said during the post-policy interaction with the media. “In our assessment, there is no such necessity at the present given the sound health of our economy. “As the Governor explained in detail, we are at a level of aggregate credit growth which is in excess of nominal GDP (gross domestic product)growth with a fairly robust distribution across various sectors,” he added. The Reserve Bank said it had been watching the market developments on the issue since end August and was in ‘regular touch’ with Securities and Exchange Board of India (SEBI) to access the fallout of mutual fund redemption and the resulting rollover risks for NBFCs and housing finance companies.
