RBI’s market operations helped banks in funding during Covid

Current Context: RBI's regular market operations and the monetary policy stance helped the banking system balance the financing needs of the various sectors of the economy during the Covid times.

• Weak economic conditions and stressed asset quality encourage banks to increase their investments in government securities.
• Due to countercyclical fiscal policy adverse impact on the overall economic activity was somewhat reduced.
• Proactive monetary, liquidity and regulatory measures by the Reserve Bank ensured continued credit flows not only through banks but also through market instruments like corporate bonds, commercial paper, etc.
• Several fiscal packages were announced under the umbrella scheme of the Atma Nirbhar Bharat's mission in response to the COVID crisis.