These channels include the standard intertemporal substitutional channel, which has long been the sole monetary policy channel in the representative agent models often used for policy analysis. The intertemporal substitution channel suggests that, following a cut in the policy rate, households increase their consumption and reduce their saving because the return on saving falls.
As the RBI guidelines on restructuring are comprehensive and applicable to all borrowers and they already provide some regulatory forbearance, such requests imply a request for further relaxations in our guidelines. Such frequent tweaking with regulatory guidelines is not an ideal practice and therefore, the Reserve Bank generally does not agree to such requests.