Chief EditorRBI Flags Concerns Over Unsecured Lending and Market Speculation
By FAZLULLAH for RAHAMATABAD.COM
Date: February 21, 2025
Mumbai: The Reserve Bank of India (RBI) has raised concerns over the rapid rise in unsecured lending and speculative activities in financial markets. Deputy Governor Rajeshwar Rao, speaking at a recent industry event, cautioned that excessive risk-taking could lead to financial instability.
The RBI has observed a sharp increase in personal loans, credit card debt, and consumer lending, prompting fears of over-leveraging. While such loans have contributed to economic growth, experts warn that they could pose a risk if borrowers default on payments, leading to a crisis in the banking sector.
In response, the central bank is considering tighter regulations on lending practices, including stricter capital requirements for banks and non-banking financial companies (NBFCs). RBI officials have also urged financial institutions to adopt responsible lending practices and conduct thorough risk assessments.
Market analysts believe that while India’s economy is growing at a strong pace, excessive credit expansion without adequate safeguards could lead to long-term financial risks. The RBI’s cautionary stance is expected to influence upcoming monetary policy decisions.
India’s Business Growth Hits Six-Month High in February
By FAZLULLAH for RAHAMATABAD.COM
Date: February 21, 2025
New Delhi: India’s business activity has surged to its highest level in six months, driven by strong growth in the services sector and increased employment, according to the latest Purchasing Managers’ Index (PMI) data.
The PMI for February 2025 recorded a sharp rise, indicating robust expansion in business activity. The services sector, which includes industries like IT, retail, and hospitality, has been a key driver of this growth, benefiting from rising consumer demand and increased digital adoption.
Meanwhile, employment figures have also improved, with companies expanding their workforce to meet growing business needs. The positive trend has boosted investor confidence, with stock markets responding favorably to the latest data.
Economists attribute the strong performance to stable macroeconomic policies, improved business sentiment, and government initiatives to boost economic growth. However, concerns remain over inflationary pressures and global uncertainties that could impact future expansion.
With India’s economy showing resilience, policymakers are expected to focus on sustaining this momentum while addressing potential risks in the financial sector.