The latest Economic Survey reveals significant improvements in monetary policy transmission, with the repo rate slashed by 115 basis points since March 2020. This easing of monetary policy, alongside measures to manage liquidity, saw a notable decline in lending and deposit rates. The banking sector also showed resilience, with a reduction in the Gross Non-Performing Asset ratio and an increase in the Capital to Risk-Weighted Assets ratio.
Gross non performing Asset ratio of scheduled commercial Banks Declined; from 8.21% in Mar. 2020 to 7.49% in Sept. 2020
Improvement in Capital to Risk Weighted Assets, in Both Public Private Banks
The monetary policy was significantly eased from March 2020 onwards owing to the unprecedented C
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FAQ :
The repo rate has been cut by a total of 115 basis points since March 2020, with 75 bps in March and 40 bps in May 2020.
The transmission of policy repo rates led to a decline of 94 bps in lending rates on fresh rupee loans and 67 bps on outstanding rupee loans, while term deposit rates fell by 81 bps between March 2020 and November 2020.
Yes, the Gross Non-Performing Asset ratio for scheduled commercial banks decreased from 8.21% in March 2020 to 7.49% in September 2020.
The Capital to Risk-Weighted Assets ratio for scheduled commercial banks increased from 14.7% to 15.8% between March 2020 and September 2020.
The recovery rate for scheduled commercial banks through the IBC, since its inception, has been over 45%.