 "The Reserve Bank of India (RBI) Governor Urjit Patel attends a news conference after the bi-monthly monetary policy review in Mumbai (Photo: Kamlesh Pednekar)")
Reserve Bank of India (RBI) Governor Urjit Patel on Thursday expressed displeasure over the current spate of farm loan waivers and said these adversely affect the culture of repayments as well as put a severe burden on the exchequer.
“I think it undermines an honest credit culture. It impacts credit discipline. It impacts incentives for future borrowers to repay. In other words, waivers engender a moral hazard,” he said, after announcing the first bi-monthly monetary policy for 2017-18.
The RBI governor added, “We need to create a consensus that such loan waiver policies are eschewed. Otherwise, sub-sovereign fiscal challenges in this context
