The Hindu Business Line : Credit as human right

The RBI Governor, Dr Y. V. Reddy, recently stated that bank credit can be made a human right. Credit is money which should come back to the lenders so that they can continue to do business. They must also earn interest on the money lent.

Credit sanction is preceded by appraisal proceeds and is not available as matter of right. Credit is money which should come back to the lenders so that they can continue to do business. They must also earn interest on the money lent.

Otherwise, the banking business will collapse. Therefore, sanction and release of credit must be made based on the repayment capacity as assessed by banks.

As credit sanction has to be preceded by comprehensive processing and appraisal, making credit a human right will be risky; if it is done, every loan applicant, regardless of whether he is eligible or not, will insist on its sanction.

Before considering the proposal of making credit a human right, the RBI must ensure a nation-wide debate on the issue.

K. K. Ammannaya

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