( ltro ) and special open market operations ( operation twist ) were also conducted to support growth. most importantly, the liquidity was closely monitored and to avoid falling into a liquidity trap, all the rbi liquidity measures came with sunset clauses. 10. the dislocations in everyday activity and access to finance brought to the fore solvency concerns across individuals, small and large businesses, and raised fears of impending asset quality stress among banks and financial institutions. the rbi responded with a volley of regulatory measures that included a loan moratorium, resolution frameworks 1. 0 and 2. 0 to facilitate restructuring of viable but distressed loans, etc. rbi also deployed its macro - prudential toolkit using various counter - cyclical measures. like liquidity, even here the rbi followed a calibrated approach with sunset clauses. for instance, the covid resolution packages set out parameters to ensure that viable borrowers are benefited, and the dispensations are available only for a finite window. meanwhile, banks were advised to raise capital and restrictions were placed on dividend payments in early days itself so as to conserve the capital of banks and improve their risk absorbing capacity. 2 / 7 bis - central bankers'speeches 11. even before onset of the pandemic, rbi had used innovative ways in resolving distressed institutions without requiring infusion of tax - payer money, while safeguarding depositor interest. instead of applying traditional template of merger of a weak bank with a strong domestic bank or government bailing out a bank, innovative approaches were adopted. in the case of yes bank, a group of banks came together to infuse capital to revive the bank. in the case of punjab and maharashtra co - operative bank a market - based resolution through the expression of interest route was used. for, lakshmi vilas bank, a foreign bank, albeit through wholly owned subsidiary1 route, was allowed to acquire the operations. 12. issues relating to governance, assurance and supervision were at the root cause of many of the problems. however, i believe that all stakeholders of financial sector, including government, regulators and regulated entities have dealt with the challenges of last decade in a collaborative, calibrated and innovative manner. overall, the financial sector and reserve bank have learnt and grown from these experiences strengthening the institutional architecture, the regulatory framework as well as the financial system. 13. on the supervisory front several initiatives have been taken with the overarching vision of being able to provide a sound forward looking

regulators within the framework of agreed global best practices and sound principles should be the ideal way to resolve avoidable frictions. 45. beyond the above agenda, there are several other work - streams whose recommendations have a bearing on the functioning of the markets. for instance, the fsb work - stream on resolution of financial entities requires host country jurisdictions to allow bailin clauses for all deposit liabilities raised by home country entities. the implications of such a sweeping mandate could be serious for the interests of domestic depositors. the challenge would be to strike a balance of the interest of various stakeholders. 46. in india, a standing committee under the technical advisory committee ( tac ) on financial markets has been constituted to assess, on a continuing basis, the implications of recommendations of various international standard setting bodies, through different workstreams, on domestic otc markets. the committee would also help in formulating appropriate policy response in this area. viii. corporate bonds 47. based on recommendations of a working group set up under the aegis of fsdcsc, certain measures have been announced in the union budget for 2016 – 17 for development of the corporate bond market : • setting up of a dedicated fund to provide credit enhancement to infrastructure projects by the life insurance corporation ( lic ) ; • issue of guidelines by the reserve bank of india to encourage large borrowers to access a certain portion of their financing needs through market mechanism instead of the banks ; • expansion of investment basket of foreign portfolio investors to include unlisted debt securities and pass through securities issued by securitisation spvs ; • introduction of electronic auction platform for developing an enabling eco system for the private placement market in corporate bonds by sebi for primary debt offer ; • development of a complete information repository for corporate bonds, covering both primary and secondary market segments ; and • development of a framework for an electronic platform for repo market in corporate bonds. 48. we are in the process of implementing the recommendations. in addition, certain other measures will be announced after finalization of the recommendations of the committee. 49. enactment of the bankruptcy act will be a defining event as regards the development of the corporate debt market. some of the recommendations of the companies law committee, particularly relating to private placement of securities, could also have far reaching implications for easing the issuance process. another significant recommendation of the committee is to exclude instruments covered under chapter iii d of the reserve bank of india act, 1934 in the term “ debenture ” as defined