The administered interest rate regime during the earlier period kept the yield rate of the government securities artificially low. The demand for them was created through intermittent hikes in the Statutory Liquidity Ratio (SLR). The task before the Reserve Bank of India was, therefore, to develop the markets to prepare the ground for indirect operations.
First, our geographic location is in close proximity to the largest mass consumption society in the world, which shapes our own consumption patterns. This demonstration effect is transmitted through the media, mainly  BIS central bankers’ speeches  1  television, our friends and relatives in the US and frequent visits to that country.