No doubt, there are persistent demands on RBI to reverse the process, but the RBI advocates direct fiscal support to development activities so as to be transparent, accountable and quantifiable rather than through monetary operations of RBI, which would tantamount to quasi-fiscal operations.
Nevertheless, it needs to be recognized that while moderation of growth in RoE is inevitable, the key to cushion this impact is to optimise capital and augment efficiency. 10. On June 9, 2014, the Reserve Bank issued guidelines for the implementation of the Liquidity Converge Ratio (LCR), which is a part of the Basel III framework on Liquidity Standards.