India’s financial condition and market environment showed a healthy improvement in the quarter to June, according to industry body CII and Indian Bank Association’s latest Financial Conditions Index. The index stood at 61.1during the quarter, up from 47.8 in the previous quarter.
The reading shows that a majority of respondent banks and financial institutions reported improvement in the overall conditions as against a significant deterioration in the previous quarter. “There was a strong rebound in expectation of banks and financial institutions for an improvement in the overall financial conditions index,” the survey said. The cost of funds index improved to 70.7 and the funding liquidity index stood at 67.2. The economic activity index at 51.8 though declined from the previous quarter’s 64.6. The deterioration was largely due to an uptick in consumer price index inflation expected by a majority of the respondents. Several bankers, who participated in the survey, expect non-food bank credit in the current quarter to deteriorate.