Economic Survey 2020 Volume 2 – Chapter 4 (Monetary Management And Financial Inter-mediation)

Table of Contents

INTRODUCTION

Monetary policy remained accommodative in 2019-20.
The repo rate was cut by 110 basis points in four consecutive Monetary Policy Committee meetings in the financial year due to slower growth and lower inflation.
However, it was kept unchanged in the fifth meeting held in December 2019.

Remained unchanged for Scheduled Commercial banks at 9.3% between March and September 2019
Increased slightly for the Non-Banking Financial Corporations (NBFCs) from 6.1% in March 2019 to 6.3% in September 2019.

The financial flows to the economy remained constrained as credit growth declined for both banks and NBFCs.
Bank Credit growth (YoY) moderated from 9% in April 2019 to 7.1% as on December 20, 2019.
Capital to Risk-weighted Asset Ratio of SCBs increased from 14.3% to 15.1% between March 2019 and September 2019.

Amendment to the RBI Act, 1934 to Strengthen the Regulation and Supervision of the NBFC Sector vesting additional powers with the Reserve Bank.
Liquidity Risk Framework for NBFCs
Review of Limits for NBFC-Micro Finance Institutions (NBFC-MFIs).

The New Pension Scheme, now renamed as National Pension System (NPS) was introduced by the Government on December 22, 2003 and it was made mandatory for Central Government employees (except armed forces) who join service w.e.f. January 1, 2004.
The Scheme was extended to the State Governments and as of now 28 State Governments have notified NPS for their employees.
The Scheme was extended to all citizens of the country on voluntary basis from May 2009.

As on end December 2019, `1.58 lakh crore were realizable in cases resolved under Corporate Insolvency Resolution Processes.
The proceedings under IBC take on average about 340 days, including time spent on litigation, in contrast with the previous regime where processes took about 4.3 years.