The performance of banking sector has improved as bad loans declined in the last fiscal, but financial flows are constrained due to fall in money raised from capital markets and stress in the non-banking financial sector, the Economic Survey 2018-19 said Thursday.
The monetary policy witnessed a U-turn over the last year.The benchmark policy rate was first hiked by 50 basis points (bps) and laterreduced by 75 bps due to weaker than anticipated inflation, growth slowdown andsofter international monetary conditions, the survey, tabled by FinanceMinister Nirmala Sitharaman in Parliament, said.”The performance of the banking system hasimproved as non-performing asset (NPA) ratios declined and credit growth accelerated.