Business Standard

Credit growth: Barking up the wrong tree?

It is unfair to expect risk capital from banks to prop up the economy. They deal with public money

bank, credit, growth, loans, funding, capital, cash, m&a, payment

Tamal Bandyopadhyay New Delhi
India’s banking regulator is upset with the extreme risk aversion of commercial banks, which are holding back the flow of credit to the productive sectors of Asia’s third-largest economy. This undermines the role of banks as the principal financial intermediary in the economy, the Reserve Bank of India (RBI) says.

However, the bankers have a different story to tell. They are not risk averse; they are just being prudent.

Who’s right? Probably, both. Bankers are not giving credit to those who are perceived to be capable of playing a role in pushing the economic growth and creating employment as they
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Aug 30 2020 | 9:43 PM IST

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