Disparity in credit & deposits: Time for monetary policy tweaking to avert bank credit crisis

As a short-term measure, the RBI can resort to open-market operations, specifically, through the purchase of T-bills from the banks it can inject liquidity into the banking system. The recent data indicates that the RBI has purchased bonds mainly in 2020 and 2021 following the occurrence of the COVID-19 pandemic. Rather it has sold bonds in 2022 and 2023 in sync with its tight monetary policy approach.