The Government of India has been infusing capital on a regular basis into the public sector banks, to enable them to meet regulatory capital requirements and maintain the government stake in the PSBs at a benchmark level (set at 58 per cent in December 2010, but subsequently lowered to 52 per cent in December 2014).
The impact of the programme and the ECB’s previous monetary policy measures is visible: Bank lending rates to companies started to decline in the third quarter of last year, marketbased measures of inflation expectations have reacted positively to the ECB’s balance sheet expansion over recent months, and euro area long-term sovereign yields have fallen – in spite of the renewed crisis in Greece.