The CII-IBA Financial Conditions Index at 56.9 for Q1 FY 2017-18 reflects positive outlook in the overall financial condition in the Indian Economy as compared to the previous quarter (48) owing to the expectation of improvement in the overall financial conditions in the economy on account of growth of External Financial Linkages, Funding Liquidity Index and Economic Activity Index.
According to CII-IBA Financial Conditions Index for Q1 FY 2017-18, there was improvement in the expectation of banks and financial institutions which is captured in improvement in the Economic Activity Index (55.6). There is also improvement in Funding Liquidity Index (72.2), and External Financial Linkages Index (59.3). There has been a relative decline in the Cost of Funds Index (40.3) as compared to the previous quarter owing to the expectation of increase in the interest rates leading to deterioration in the expectation of short term interest rate and Marginal Cost of Lending Rate (MCLR).
There were 31 major banks and financial institutions who participated in the survey with a combined total assets of more than Rs.60 Lakh crores.