The Confederation of Indian Industry (CII) and the Indian Banks’ Association (IBA) have launched a Financial Conditions Index (FCI) based on a primary survey of major Banks and Financial Institutions on their expectations of key financial and economic variables determining financial conditions in the Indian economy.
The CII-IBA FCI will: (i) Serve as a key indicator in assessing the short term financial conditions in the Indian economy, (ii) Provide effective monitoring of current financial conditions for facilitating regulatory and policy decisions, (iii) Provide early signals on turning points in financial conditions, and (iv) Help tracking credit flow conditions for industry & service sectors from various channels.
It will be released on a quarterly basis, in advance of release of key macroeconomic and money and credit market indicators with a strategic intent to help serve all stakeholders including the policymakers, regulators, banks and financial institutions, and the Indian industry at large.
To ensure optimal coverage of all major set of indicators, four sub-indices have been created including key indicators across the linkages spectrum of financial sector with the real sector determining the financial conditions in the economy.
They comprise:
- Cost of Funds Index
- Funding Liquidity Index
- External Financial Linkages Index
- Economic Activity Index