The Underbelly of Banking

First published in Deccan Herald

The Reserve Bank of India’s recent directive, acting on the unbridled growth of unsecured loans, is timely, but the move may actually lead to banks raising interest rates and charges. The solution lies in banks moving away from unbridled retail lending. But that may not happen because the banking system in India, overall, is taking easier routes to make its money insidiously from vulnerable segments of the population and the industry that are hungry for debt to sustain their living, and veering away from the more difficult core banking business that would help fuel the Indian economy. And they are doing so quietly and opaquely. Here are just four examples.

This is the opening of the piece. The full article is on Deccan Herald.