In the wake of the Supreme Court’s order nullifying the Reserve Bank’s circular of February 12, 2018 for resolution of stressed assets, we have issued fresh guidelines yesterday (June 7, 2019). The new guidelines provide a system of strong disincentives in the form of additional provisioning for delay in initiation of resolution or insolvency proceedings.
In my view, that, combined with data revisions that were directly relevant to our decision making, led to a delay in taking action to address rising inflation. It is helpful that the FOMC provided clear direction earlier this year that it was prepared to act quickly to tighten monetary policy.