The financial conditions are looking up in the current quarter (Q2FY21) due to policy decisions and steps the government and Reserve Bank of India have taken to support economy. The reading on financial conditions index rose to 65.2 for July-September 2020 (Q2FY21) from 44.2 for April-June 2020 quarter (Q1FY21), according to CII-IBA survey.
Sunil Mehta, Chief Executive, Indian Banks’ Association in a statement said, “As we move on with the unlocking pace and also with managing the Covid situation better than in the initial stages, we should remain hopeful on the pick-up in economic activity.”
The cost of fund index and liquidity index are showing an impressive reading of 80.6 and 71.1 in the present quarter survey. Affordable cost of funds and sufficient liquidity in the system, ensure availability of resources for all the activities of the economy, IBA-CII said.
A total of 29 entities participated in the survey which includes seven public sector banks, nine private sector banks, five foreign banks, and one cooperative bank. Representing other financial institutions, seven leading NBFCs participated in the survey.
Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII) said, the optimism in the expectation of the financial sector is pleasant. The availability of finances has improved for the economy.
The Indian economic activity has also started showing signs of revival after the strict lockdown was relaxed, he added.
Several indicators like GST collection, petrol consumption, peak power demand, electronic toll collection have shown early signs of recovery.