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India needs to continue push for financial inclusion, says Raghuram Rajan


India needs to continue push for financial inclusion, says Raghuram Rajan

Hyderabad, July 19 (ANI): Reserve Bank of India governor Raghuram Rajan said that India needs to continue fine-tuning rules on collateral and interest rates to ensure financial institutions have enough incentives to keep lending to the poor. Rajan added the RBI would continue to look at the rules as it seeks to find a careful balance between the needs of the poor and the push for profits by financial institutions.

As such, Rajan said the RBI may look at easing rules that at present prohibit taking collateral for loans below a certain size for some population segments, and reducing the ceiling rates for loans provided by micro-finance firms. Rajan also said the RBI could be open to allowing individuals, including farmers, to declare personal bankruptcy to win a reprieve from debt, as long as this was used sparingly.

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