Flexibility not forbearance Finally, let me end on a current concern that pertains to the RBI’s regulation that is not unrelated to the issues discussed in this lecture. Today, a large number of industries are getting together with banks to clamour for regulatory forbearance. They want the RBI to be “realistic” and postpone any recognition of bad loans.
The assessment found that: (1) to achieve the 2 percent target, it was appropriate for the Bank to continue with QQE with Yield Curve Control, which was effective in pushing up economic activity and prices; and (2) to that end, it was important to continue with monetary easing in a sustainable manner and make nimble and effective responses without hesitation to counter changes in economic activity, prices, and financial conditions.