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Rates obsession | Business Line

Rates obsession | Business Line

Rates obsession

With reference to“The RBI’s inflation obsession”, (Business Line, October 26), there are some things the new governor must keep in mind when he makes the October 29 announcement.
One-third of all NPAs of PSBs were contributed bythe top 30 NPA accounts in each bank. Deregulation of savings bank interest rates did not add to the interest income of real SB account holders. The net interest margins enjoyed by banks in India are among the highest in the world.
The theory that interest cost is not the major ingredient in project cost is interpreted to mean that small borrowers can afford to pay higher rates of interest. Big depositors get preferential rates of interest and big borrowers get attractive terms for borrowing.
M. G. Warrier
Mumbai

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