Patel warns against steep interest rate subvention

He was speaking at Gandhinagar, Gujarat, at an event to commemorate GIFT

Reserve Bank of India (RBI) Governor Urjit Patel on Wednesday cautioned that credit guarantees and interest rate subventions reduced the incentive to guard against risk when people were protected from its consequences.

Patel was speaking at Gandhinagar, Gujarat, at an event to commemorate GIFT, India’s first International Financial Services Centre (IFSC).

On the New Year’s eve, Prime Minister Narendra Modi raised the ceiling for credit guarantees on loans to small businesses from Rs 1 crore to Rs 2 crore and offered interest rate relief of 4 per cent on housing loans up to Rs 9 lakh and 3 per cent