...while funding gap widens

Banks and non-banking financial companies (NBFCs) aggressively used certificates of deposit and commercial papers to address funding shortfalls, leading to increased money market spreads since July, according to the RBI's latest Financial Stability Report.

- ANUPREKSHA JAIN

Ease in system liquidity in the months of July and August, driven by higher government spending and change in the stance of the Monetary Policy Committee, led to ease in softening of short-term money market rates as well as government bonds and corporate bonds, the report added.