Tag: RBI

What constitutes monetisation of Debt ?

Monetisation of debt is a difficult concept to comprehend, as it is not clearly defined. It can occur through several practices that may be transparent, translucent, opaque or hidden. For long, monetisation of debt was understood as “converting government debt to money” or “the central bank’s purchase of government bonds when they are issued”. Either definition has its problems. Typically, the government can finance its deficits by printing money or issuing debt. The former directly attenuates monetary control. In the […]

Shoe Leather Cost, Covid & Yes Bank!

People normally want to park most of their liquidity in an interest bearing savings account with a bank (or park in liquid funds) and minimise the actual cash they keep with themselves. This is because while the nominal value of cash remains constant, the real value of the same reduces with time due to inflation. However, some amount of cash one needs, to carry on day to day activities – to pay to vegetable vendor, for grocery store next door […]

Another strong month for Indian External Commercial Borrowing Market

Latest data release from RBI shows that capital flows in the External Commercial Borrowing market continued unabated during March as well, despite overhang of Covid-19. The total ECB issuance volume for the month of March was USD 7.43 Billion. With this the cumulative ECB volume for FY 20 closed at USD 52.93 Billion (including USD 896 million of Masala Bonds). In terms of volumes, March was the second biggest month for the ECB market for FY 20 – next only […]

Partial Credit Guarantee Scheme (PCGS 2.0) : Hits and Misses

Finance Minister, Nirmala Sitharaman last week, as part of Covid Relief Atmanirbhar package had announced Partial Credit Guarantee Scheme 2.0 (PCGS 2.0) for Micro Finance Institutions (MFIs) and Non- Banking Financial Companies. The stated objective of the scheme is “to address temporary liquidity/cashflow mismatches of otherwise solvent NBFCs/HFCs/MFIs without having to resort to distress sale of their assets for meeting their commitments, and to enable availability of additional liquidity to them for on lending”. ISF in an article published on […]

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