Business Today - - CONTENTS - UR­JIT PA­TEL Gov­er­nor, RBI

Ur­jit Pa­tel, Gov­er­nor of the Re­serve Bank of In­dia, crit­i­cised some state gov­ern­ments who de­cided to write off farm loans. Ac­cord­ing to Pa­tel, such waivers un­der­mine an hon­est credit cul­ture and en­gen­der moral hazard. "It leads to crowd­ing out of pri­vate bor­row­ers as high gov­ern­ment bor­row­ing tends to im­pose an in­creas­ing cost of bor­row­ing for oth­ers,” Pa­tel said dur­ing the RBI's bi-monthly mon­e­tary pol­icy an­nounce­ment. He has, how­ever, urged lenders to bring down lend­ing rates as pol­icy rates have come down by 175 ba­sis points while weighted av­er­age lend­ing rates have come down only by 8590 ba­sis points. The RBI Gov­er­nor was re­cently in the news when his monthly ba­sic pay was raised from `90,000 to `2.5 lakh by the gov­ern­ment.

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