Farm loan waivers not good for banks :SBI Chairman
DSIJ Intelligence / 15 Mar 2017
SBI has recently announced a one-time settlement (OTS) scheme in the tractor segment to speed up its recovery. Similar schemes have been announced in education and SME segments by the largest lender in the country.
SBI chairman Arundhati Bhattacharya said on Wednesday, while commenting on the farm loan waiver schemes, that such measures may disrupt credit discipline in borrowers and that it may not be good for banks in general.
BJP in its election campaign for UP promised, if voted to power, to bring in a loan waiver scheme for farmers.
SBI chairman said on the sidelines of an event organised by CII that such waiver will allow for fall in credit discipline as people who get these waivers , it is found , will again expect the waiver in future as well. With this mentality of borrowers the future loans given may remain unpaid.
SBI chairman emphasised on supporting the farmers without disrupting the credit discipline amongst the farmers.
SBI has recently announced a one-time settlement (OTS) scheme in the tractor segment to speed up its recovery. Similar schemes have been announced in education and SME segments by the largest lender in the country.
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