Monetary policy: RBI doing exactly what AQR does, though unofficially

The Economic Survey, last week, had suggested that there should be one more round of AQR of banks after the Covid-related forbearance is over

The Reserve Bank of India (RBI) is making its own assessment of the true state of non-performing assets (NPAs) in the banking system as part of its supervisory function. In essence, it is actually an asset quality review (AQR) of the banking system, without officially being called that.

In the post-policy press meet, RBI Governor Shaktikanta Das said, “We are making our own assessment of the true state of NPAs in each of the banks. So, we have a sense of the overall situation. We are exactly doing what an AQR needs to do as part of our supervision”.

“In the last