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'We are not in favour of loan waiver scheme', says Reserve Bank of India

June 17, 2014 - Hyderabad

    The Reserve Bank of India has written a letter to the State Government saying that it is not in favour of loan waiver.

    The RBI said that the loan waiver scheme will weaken the loan distribution and will spoil the repayment culture. It further said that it will pose a threat to the banking financial status. The RBI Executive Director Dr.(Mrs) Deepali Pant Joshi in a letter to the State Government said that it will defeat the self-confidence of those paying loans. He said that RBI strongly opposes such move and wanted the State not to encourage such steps that are detrimental to the financial discipline.

    It may be recalled that Nara Chandrababu Naidu on June 8 signed a file constituting a committee that will recommend the State government on loan waiver scheme. The committee is expected to submit its report by June 22.

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