RBI’s advisory to the state governments that mass loan waiver schemes would adversely affect the financial health of the banks and ultimately such decisions would lead to financial instability is not only a sane advice. It also reveals AP Chief Minister N. Chandrababu Naidu’s hollow mind as he thinks that the RBI works as per directions of the Centre, and his brinkmanship. Of late, it has become a habit with the political parties to promise the moon to the electorate giving little thought to the financial burden and how to bear it. The election laws must direct political parties to explain how such promises would be fulfilled without troubling public sector banks, or the RBI must debar banks from granting loans based on such reckless promises. Loan waiver discriminates those repaying loans promptly against the wilful or otherwise defaulters and encourages every one not to repay loans. This will be a sad state of affairs.
- Ganti Mahapatruni Rama Rao, Visakhapatnam
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