There is fresh news of pain in the financial markets from the mutual fund sector. The NBFCs continue to say that they are not receiving any money from banks for the inevitable asset-liability mismatch because of the moratorium granted to their borrowers. The stock markets are reflecting the pain of the financials. A lot has been done, there is no taking away from that.
It was only on March 25th and 26th that the overnight money in the market the repo rate was going at 5.15. Today overnight money even according to the policy rate is 3.75 that is a huge almost 150 basis point policy rate cut and then if you go to the actual overnight money which is in the TREPs then it is as low as 2 percent so the cost of money has fallen by 300 basis points, money is as cheap as 2 percent. But it is not available to those who most need it as is very obvious which is why you have so many people seeking redemptions because corporates want money, they have no revenues.
So where does this leave us in terms of the next steps from the regulator – has he fired all his bullets? Does the Reserve Bank of India (RBI) have more bullets and what next from the fisc if the Reserve Bank is reaching a dead-end on some issues? To answer these question Latha Venkatesh is in conversation with Ananth Narayan, Professor at SPJIMR, V Srinivasan, Former Deputy MD at Axis Bank, and HR Khan, Fmr Deputy Governor of RBI.