INDIA’S FISCAL CONDITIONS INDEX FALLS
New Delhi, Feb. 18: An index mapping the country’s short-term financial conditions has plunged over 12 points for the fourth quarter of the current fiscal ending March 31, as compared to the previous quarter.
The CII-IBA Financial Conditions Index stood at 53.2 for the fourth quarter of 2017-18 as against 65.3 in the OctoberDecember period.
However, the External Financial Linkages Index and Economic Activity Index have shown an improvement in the ongoing Q4 vis-avis the previous quarter, while there has been a compression in the cost of funds index.
The index in the current January-March quarter has shown an improvement on a year-onyear basis of five points. A total of 29 banks and financial institutions participated in the survey that includes 11 PSBs, 5 private sector banks, 2 foreign banks, 2 co-operative banks, and 9 non- banking financial companies.
The total asset of the respondents are approximately `68 lakh crore. Indian Banks Association chairman (IBA) and Allahabad Bank MD Usha Ananthasubramanian said: Overall index reading is optimistic about the financial sector though the cost of fund index has contractedy. With inflation apprehension looming large coupled with drying up of excess liquidity from the system, the room for rate action from RBI does not exist.”