...... To quote the Reserve Bank of India: ”Housing loans constitute around half of the total personal loans in India and as a result a boom and bust in the housing market can affect quality of assets. The build-up of systemic risk in this area in India was avoided mainly due to implementation of macroprudential policy by the Reserve Bank like changing the risk weights for loans to real estate. “.......
......it is a bit cynical to try and achieve the latter objective by making the banks take on excessive credit risk. He should stick by the view that bank managements, including those in public sector banks, must be given their autonomy when deciding on their lending practices and the task of regulating them and influencing their behaviour must be left to the central bank.
Read - The Hindu
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