It has been our constant endeavor to support microfinance sector by addressing regulatory gaps and arbitrage arising from differential regulations across the spectrum of entities. Towards this objective, we have introduced structural changes by revamping the regulatory framework for microfinance loans in March 2022. We would like to see through its successful implementation on ground before taking further steps.
While sovereign bond purchases are a widely used monetary policy tool, they are not without risks. They bring monetary policy very close to monetary financing of governments, which could undermine the central bank’s ability to maintain its mandate of price stability. Monetary policy may face the danger of being dragged and driven by fiscal policy, and find it very difficult to free itself.