There is a sentiment of risk in global markets which we have seen over the last couple of days, says Saugata Bhattacharya.In the last 20 days almost every bank has announced fund raising. What is this sort of fundraising telling you? Are banks getting very-very cautious when it comes to their credit cost in aggregate as a whole?This will depend from bank to bank but on a general basis, the first thing that needs to happen is balance sheets and particularly capital positions will need to be strengthened. This is one reflection and this is an opportune time of raising money. Most companies including banks and NBFCs are looking for cheap funding sources given the cheapness of funding to shore up capital positions. Secondly, particularly for banks, in light of the pre-eminent position in the stimulus programme that is envisaged with the government and their large share of lending, the banks need to raise growth capital in addition to strengthen the balance sheet. So given the lessons that we have learnt, there is a need to raise and strengthen capital in the light of different risks that might emerge in the system at some point in time. I think cumulatively, the funding increases that you are seeing is a result of some of these factors.Let us just talk about the interest of FIIs. We have seen a big deal on Reliance Jio. A lot of other fundraising has happened which has got in a lot of FII participation and FDI participation in the markets. What do you make of the current account surplus which came in and how does that impact rupee?We have seen a sudden strengthening of the rupee over the last couple of days. I think we need to break it up into two sources: one is typically the flows which is the direct impact on the rupee. Whenever there is an inflow or an outflow of the rupee, it has an immediate impact. Second is the movement of global currencies because even that has an impact indirectly; via risk on and leading to capital flows. So the inflows of capital accounts that we have seen throughout Q1 and beginning in Q4 of last year have obviously given global perceptions or valuations of Indian companies. Given the flood of liquidity driven by central banks in global markets, all investors are looking for yield and India is a very attractive market particularly given the current valuation; that is one. Secondly in terms of flows, the current account surplus that you mentioned in Q4 and in Q1 are likely to pretty much get a surplus. This is not very good news because the surplus is being driven by lower imports which is indicating weak demand. But be that as it may, it is contributing to the overall flows. In addition to the current account surplus, you are also seeing the flood of capital flows. The third factor is, where is the rupee headed and what is the strategy of the Reserve Bank of India to deal with it. So obviously there is a certain discomfort in allowing the rupee to accelerate to appreciate beyond a certain point; go below 75, then 74.50. It is a difficult number to read. So these are the three components. The dollar in the meantime has weakened. There is a sentiment of risk in global markets which we have seen over the last couple of days in terms of the DXY index for the dollar that has had an impact on all emerging markets currencies in addition to which our estimate of increasing capital flows has also been instrumental in driving the rupee. Incidentally, I think the Reserve Bank has also started intervening in the forwards markets which we had not seen for some time.