The stance of the Bank has been that deposit acceptance will have to be a tightly regulated activity and banks are the right structure to carry on that activity. Further given the absence of deposit insurance and an institutional complaint redress mechanism for the NBFC sector, the Reserve Bank is not in favour of allowing NBFCs to accept deposits.
In such an environment, taking into account the strong fall in commodity prices over recent months, price, cost and wage pressures in the euro area should also moderate. At the same time, the underlying pace of monetary expansion has remained strong but has continued to show further signs of deceleration.