The CII – IBA Financial Conditions Index for Q2 FY 2020-21 recorded a much needed encouragement and has registered an optimistic value of 65.2 owing to expectation of improvement in the overall financial conditions in the economy on account of all factors namely External Financial Linkages, Funding Liquidity Index, Economic Activity Index and Cost of Funds Index.
The survey results indicate that there was significant improvement in all the factors vis-àvis the previous quarter barring the Cost of Funds Index, however, the value returned by this particular index was extremely optimistic like last quarter survey. The overall optimistic expectation is primarily due to the various announcements made to support the economy and the Regulatory efforts put in by the Government and RBI while striving for the Unlock in the pandemic laden year.
This figure is based on Round 20 of the Financial Conditions Expectation Survey undertaken in the month of July 2020, wherein a total of 29 entities participated in the Survey which includes 07 Public Sector Banks, 09 Private Sector Banks, 05 Foreign Banks, and 01 Cooperative Bank. Representing other financial institutions, 07 leading NBFCs participated in the Survey.