In 2006-07, the weighted average maturity of new loans was 14.7 years with a range of 4 to 30 years and the weighted average yield of new loans was 7.9 per cent. The Reserve Bank's efforts to elongate the maturity profile resulted in a smooth and reliable yield curve, which acts as a benchmark for the other markets for pricing and valuation.
Market liquidity today compares well with other emerging economies with bid-offer spreads in benchmark securities at 1-2 bps. The holding of G-Secs among financial institutions has been more persified, particularly, with the emergence of insurance and pension funds as a “durable” investor class for the longterm securities.