Regulatory diligence by the liquidity of financial institutions in solving financial crisis – Some suggestive measures

Abstract

India is one among the fast developed economies in recent times even in the midst of international financial crisis. To adjust international monetary disequilibrium in our economy the higher monetary authority namely RBI is essentially followed certain regulatory diligence especially the usage of liquidity of financial institutions under the overall instructions. All over the nation have met financial crises but India evaded from this lacunae because of its own homemade savings of the households/larger sections of the society. Very recently the most developed country like USA is under the grip of inflationary sequences. To adjust the monetary disequilibrium the federal bank of USA is going to raise the rate of interest of commercial banks from 4.6% to 5.1%. In the case of India our rupee is gradually diminishes with the tune 81.64 per US dollar in the international transactions. In this context it is a most wise and essentially to adhere certain regulatory diligence like minimal usage of liquidity of financial institutions, reducing the volume of nonperforming assets of our financial institutions and so on. The author made an attempt to analyze the sequences of regulatory diligence of our financial institutions like public sector banks and other lending institutions in adjusting monetary disequilibrium in a very detailed approach in this paper.