Against the background of such developments, the Bank is closely monitoring the extent to which both short and long-term interest rates may decline further while continuing to employ the Asset Purchase Program. Meanwhile, steadily increasing the amount outstanding of the Asset Purchase Program is no easy task.
While banks have been the primary channels of credit in the economy, recent trends suggest increasing role of non-bank funding channels. Assets of non-bank financial intermediaries like NBFCs and mutual funds have been growing; funding through market instruments like corporate bonds has also been increasing.