Monday, August 27, 2012

Take more risks, increase credit flow to larger number of people: RBI

Banks need to increase credit flow to cover larger number of people as only 10 per cent of people in the country have access to bank loans,Reserve Bank Deputy Governor K C Chakrabarty said here today.

"Banks have to take more risk. Look in our country today, access to credit is only 10 per cent. You have to increase the flow of credit to a larger number of people," Chakrabarty told reporters near here.

"What we are feeling is that banks are not comfortable taking risks. The issue is not risk aversion. The issue is managing the risk. Risk management means minimise the risk. It is minimise the risk for a given return or with a given risk, maximise the return," he said.

He said that once banks take more risk on giving access to credit, it meant they were doing more business.

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