and media. we have received a number of useful suggestions and comments on the recommendations of the study group. these are being examined carefully and would help us to take a considered view, factoring in transition costs and providing a calibrated path to the desired benchmarking system. improving monetary transmission : shoring up bank balance sheets as explained earlier, even as the reserve bank has reduced its policy repo rate by 50 bps since october 2016 and by a cumulative 200 bps since december 2014, the banking sector ’ s credit growth has remained much muted. while weak demand for bank credit could be one of the factors leading to the observed slowdown in credit growth, a primary cause of the slowdown had also been the weak balance sheets of public sector banks in view of large non - performing assets which seem to have made banks risk averse and induced them to reduce the supply of credit : under - capitalized banks have capital only to survive, not to grow 7. the dominance of the supply side factor has also been borne out by the fact that the credit growth of private sector banks ( better asset quality and well - capitalised on average ) remains robust, whereas there has been a sharp deceleration in the credit growth of public sector banks ( especially the ones with high stressed assets ). against this backdrop, the enactment of the insolvency and bankruptcy code ( ibc ) in december 2016, the promulgation of the banking regulation ( amendment ) ordinance 2017 ( since notified as an act ), and the subsequent actions taken thereunder in the form of the reserve bank requiring banks refer the largest, material and aged non - performing assets ( npas ) to the ibc, have made the ibc a lynchpin of the new time - bound resolution framework for bank npas. these initiatives will now be supported by the government ’ s decision to recapitalise public sector banks in a front - loaded manner, with a total allocation of ` 2. 1 trillion, comprising budgetary provisions ( ` 181 billion ), recapitalisation bonds ( ` 1. 35 trillion ), and raising of capital by banks from the market while diluting government equity share ( around ` 580 billion ). the two steps together – asset resolution and bank recapitalisation – are expected to strengthen bank balance sheets significantly and improve banks ’ ability and willingness to lend at rates in consonance with policy rates and result in an improved monetary transmission. concluding observations in summary, efficient monetary transmission

development, speed of transaction processing and reduction in transaction costs. in india the major issue about new technology related delivery channels is their impact on the processing of information, which lies at the core of banking business. inspite of their advantages, reliance on technology based delivery channels often exacerbates traditional risks : operational risk ( since it requires changes in procedures ), reputational risk ( if the bank fails to deliver secure, accurate and timely service ) and legal risk ( uncertainty about which legislation applies to e - banking transactions ), besides emergence of other risks ( business and credit risks ). atms still remain the most successful delivery channel followed by telephone banking and internet banking. with about 9000 off - site and on - site atms installed, banks are effectively reaching out to a large customer base at a substantially lower cost. typically, it costs close to rs. 50 per transaction if conducted in a branch and the same if done through atm costs about rs. 15. in order to reduce the cost of transaction banks have started out - sourcing and sharing of atm services and this trend will gather momentum in near future. as this delivery channel gains mass acceptability and is user friendly, the bank can use it to cross - sell its as well as others ’ products. for example, banks have already started dispensing railway tickets, movie tickets through their atms. in future a bank ’ s atm would function like a kiosk delivering more of non - cash transactions, thereby simultaneously reducing the fixed and operating cost of atm. internet banking - an emerging delivery channel - offers significant cost advantage to banks. a net - based transaction costs the bank only around rs. 4 and costs per transaction are even lower than those of an atm, mainly due to savings on prohibitive real estate costs. internet banking has failed to take off due to a combination of psychological, legal, technological and socio - economic factors. lack of critical mass of early adopters, lack of a strong trust environment, slowness in adoption of the internet, low penetration of pcs and access to internet are some of the impediments in the adoption of internet banking in india. with drastic fall in cell phone tariff and emergence of seamless connectivity between fixed and mobile lines, mobile banking is set to emerge as one of the cost - effective delivery channels in near future. toll - free - numbers would also gain popularity as an important delivery channel. although banks abroad are using call centre as a delivery channel for some time