, the decrease in inflation rate and a reduction in interest rates. the imf and world bank boards on 30th and 31st august 2006, respectively, approved that malawi had reached the hipc completion point after making satisfactory progress in implementing its poverty reduction strategy paper ( prsp ) for at least one year, and maintained satisfactory macroeconomic policies as evidenced by its performance under the prgf. furthermore, malawi also met all the completion point targets in the area of economic governance and public expenditure management, safety nets, and microfinance. apart from receiving hipc debt relief, malawi also qualified for the multilateral debt relief initiative ( mdri ) which cancelled all pre - 2004 debt to the world bank and african development bank, and pre2003 debt to the imf. in october 2006, paris club creditors also agreed to cancel almost 100 % of malawi ’ s debt owed to them. these developments, distinguished ladies and gentlemen, reduced malawi ’ s external debt from 142 % of gdp at the end of 2005 to 23 % of gdp at the end of 2006. other external debt indicators also improved significantly. distinguished ladies and gentlemen, let me now turn to the monetary policy stance that was pursued in 2006. monetary developments in 2006 were generally expansionary. the increase in money supply mainly arose from net foreign reserves on account of receipts for balance of payments support. the increase in money stock was also partly a reflection of an expansion in credit to the private sector. it should be noted that since march 2006, credit to the private sector has been increasing steadily, implying that the february 2006 reduction in the liquidity reserve requirement ( lrr ) was bearing fruit. this is in line with the economic program which allows for more credit to the private sector to boost economic growth. the bank rate was adjusted downwards from 25. 0 percent to 20. 0 percent on 13th november 2006. as a result, commercial banks followed suit by adjusting both their savings and deposit rates. the reduction in interest rates should, therefore, give an opportunity to the private sector to participate in borrowing capital, thereby generating economic growth. it is also pleasing to note that the rate of inflation has been declining since february 2006. by december 2006, the annual rate of inflation declined to 13. 6 % from 17. 1 % realised in 2005. this was mainly due to : • slowdown in food inflation as a result of a good crop. • relative stability of the malawi kwacha against other major currencies. • lagged effects of a decline

75913 crore as at end march 1998 to ₹ 16, 10, 729 crore at end september 2015. share of nbfc assets as a percentage of scheduled commercial banks ’ assets has increased from 7 % in 1998 to 14. 8 % in march 2015. there are 202 nbfcs - nd - si ( assets size ₹ 500 crore and above ) with a total asset size of ₹14126 billion. the number of deposit taking nbfcs, including residuary non - banking finance companies ( rnbcs ), decreased from 1, 420 in 1997 – 98 to 209 in september 2015. share of nbfc deposits as a percentage of scheduled commercial banks ’ deposits has come down from 3. 34 % in march 1997 to 0. 30 % in march 2015. 20. sources and uses of funds of nbfc sector – position as on september 30, 2015 21. loans and advances extended by nbfcs - nd - si posted strong double - digit growth of 15. 5 % during 2014 – 15, in contrast to the slowdown in commercial bank ’ s non - food credit during the same period ( chart 4. 6 ). strong growth in credit extended by the infrastructure finance companies, microfinance companies and loan companies contributed to sturdy growth in the loan portfolio of nbfcs - nd - si. among the sectors, infrastructure, medium and largescale industries, and the transport sectors contributed to strong growth in credit off - take of the nbfcs - nd - si. during 2014 – 15, nbfcs - nd - si raised funds mainly through debentures and commercial papers. borrowings from banks, which earlier constituted to be the main source of funding, has been progressively reduced. a notable feature is the rising exposure of mutual funds to the financial instruments floated mainly by the nbfc - infrastructure finance companies ( ifcs ), loan companies ( lcs ) and nbfc - micro finance institution ( nbfc - mfis ). 22. in recent years, asset quality of nbfc sector has gone through the vicissitudes of overall deterioration spreading across the financial system as the economy slowed. gross npas as per cent of credit deployed rose to 4. 1 per cent by end - march 2015. bis central bankers ’ speeches prospects 23. in my opinion, the prospects for the sector in the medium term are not going to be uniform. different segments of the sector are poised