Viewed from this perspective, economic agents in India should be able to walk in step with their counterparts and competitors elsewhere. One essential requirement in this regard is that risk management systems and procedures as well as the market for risk management products in India should be world class.
Firms are still well funded as a result of their borrowing in the first wave of the pandemic, which in part explains why lending to firms has slowed. By contrast, lending to households is holding up. Our most recent bank lending survey shows that credit conditions for both firms and households have stabilised. Liquidity remains abundant.