......... Undoubtedly, poor rainfall causes idiosyncratic shocks to income and consumption of the households in the rural sector of India and in other emerging economies, which in turn creates shocks to credit demand. It results in a high cost of credit and pervasive rural indebtedness, notes Rakesh Mohan, an erstwhile Deputy Governor of the Reserve Bank of India (RBI), in an RBI paper in 2006. His observation suggests lack of responsiveness of the commercial banking system to credit demand shocks. However, it is a commonsense observation based perhaps on his experience, but not on an empirical analysis of extensive rainfall and farm credit data. From time to time, the financial press and other media outlets in India have also reported isolated instances of the effect of poor rainfall on bank credit availability. But so far there has been no systematic study................
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
No comments:
Post a Comment