Swift, time-bound resolution or liquidation of stressed assets will be critical for de-clogging bank balance sheets and for efficient reallocation of capital. The Government, IBBI and the Reserve Bank have been working together to comprehensively address the challenge through a multi-pronged approach. In brief remarks today, I intend to highlight the key dimensions of this convergent approach and share the underlying thinking. 3.
Under this framework, the Bank has been conducting yield curve control, in which it controls short- and long-term interest rates. Specifically, according to the guideline for market operations, the Bank currently sets the short-term policy interest rate at minus 0.1 percent and purchases Japanese government bonds (JGBs) so that 10-year JGB yields will remain at around 0 percent.