Q.3 Over the last decade, banks have increasingly shifted away from providing credit to industry, favouring instead lending to consumers. What are the factors responsible for this shift? What are its implications for the economy? (10 Marks)

Mentor’s comment- https://indianexpress.com/article/opinion/columns/what-the-rbis-financial-stability-report-reveals-about-the-banking-sector-8071499/ In the intro, mention the RBI’s latest Financial Stability Report (FSR) giving the banking system a reasonably clean bill of health. In the body mention the reasons for the shift such as lessons learned from the global financial crisis and lending boom of 2004-2009. That created issue from both the supply … Continue reading Q.3 Over the last decade, banks have increasingly shifted away from providing credit to industry, favouring instead lending to consumers. What are the factors responsible for this shift? What are its implications for the economy? (10 Marks)