Till recently, most analysts were talking about unwinding the ultra-loose monetary policy as the biggest challenge before Reserve Bank of India (RBI) Governor Shaktikanta Das in the coming months. The policy rates have been at its historic low since May 2020 and there has been plenty of liquidity in the system. The second wave of the Covid pandemic has changed the scene. For Das, the immediate challenge is helping banks manage their quality of assets and handhold the stressed borrowers, while securing financial sector stability. Because when the tide recedes, some of the banks may end up swimming naked.
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