Earlier this week, Governor Shaktikanta Das completed two years at the helm of the Reserve Bank of India (RBI). In a flashback, two years ago, around the time the Governor took charge, financial markets were indeed in choppy waters. The ILF&S and YES bank crises were looming large. They resulted in a major liquidity crisis, as NBFCs found it difficult to raise funds from banks and certain sectors were faced with a severe liquidity squeeze.
Though inflation was under control and subsiding, interest rates were high with the repo rate quoting at 6.5 per cent, as RBI retained its calibrated tightening stance. Most of the investments in the previous two years were government-driven and corporate loan offtake was low, with a host of growth sectors like telecom and power coming under stress.