Interest rate waivers will harm banks: AIBDA

Mumbai , June 18:

Interest rate waivers for bank loans during moratorium will harm the depositors, the All India Bank Depositors’ Association (AIBDA) has said adding that interest waiver of any kind will dent the credit culture and also impact the financial health of banks.

Bank depositors will be “severely hit” if a waiver on interest rates is allowed, as banks would inevitably seek to cover their potential or actual loss of interest income through further cutbacks in the deposit interest rates, it said.

Credit demand has also gone down and will revive as the lockdown eases, it said, adding that the depositors’ money is unlikely to be used for it as the low cost funds made available by the RBI will be deployed.

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