1) The Indian banking balance sheet is suffering from ‘double financial repression’. It means that
a. On the liabilities side, statutory liquidity ratio (SLR) and priority sector lending (PSL) requirements have depressed returns to bank assets. On the assets side, high inflation lowered real rates of return on deposits.
b. On the liabilities side, interest on loans is increasing. On assets side, Non performing assets are increasing.
c. On the liabilities side, high inflation lowered real rates of return on deposits. On the assets side, statutory liquidity ratio (SLR) and priority sector lending (PSL) requirements have depressed returns to bank assets.
d. None of the Above
