Second, financial stability was assigned specific attention in formulating RBI’s monetary policy during the period when Dr. Reddy was the Governor of the RBI, and this was reinforced considerably by Governor Dr. Subbarao. Thus, in India, the dimension of financial stability was given due attention in the conduct of monetary policy, even before the onset of global crisis.
Third, India had started using counter-cyclical provisioning norms and risk weights prior to the global crisis, and in the post crisis period such measures – known widely as macro-prudential tools – have become the mainstream consensus.