Since passive consolidation takes longer time to make an impact on enhancing the liquidity, Active consolidation was proposed by way of buying back illiquid bonds and reissuing liquid bonds. The Scheme has been finalized in consultation with the Government and the budgetary provision of Rs. 25 billion has also been made in this regard. Further action is being taken by RBI.
My main contention is that, even if that is so, we cannot afford to restrict ourselves to this strategy, or stick to it in a way that the public may see as a-critical. The decisions we take today set an important precedent for how MAP will work and how it will be expected to work in the future.