Sunday, January 1, 2017

Modi's initiative will land banks in the soup.

 Remember DIR or Poojari loans or IRDP loans. Those schemes were intended to help the poor, farmers, small businesses. Loans were taken and never returned. Banks took the losses and their balance sheet were hit. The new schemes announced by the Modi, it appears, will have the same impact.

What should the interest rate, whom it should give, how much and when should be best left to the judgement of the bankers. There should not be any external interference. Otherwise banks will become sick.

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