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Mumbai, Jan. 18 The RBI has reduced risk weights on education loans under the Basel II framework.

“Under the Basel II framework, educational loans, no longer being a part of consumer credit, would be treated as a component of the regulatory retail portfolio and attract a risk weight of 75 per cent, as against 125 per cent at present,” said an RBI notification.

In the past, a reduction in risk weights has encouraged banks to cut interest rates on loans.

More Stories on : Credit Market | Education | RBI & Other Central Banks

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