RBI Governor Raghuram Rajan on Friday said the loan waiver given to farmers in some states in 2009 impeded the flow of finances by breaking the credit cycle.
Referring to the loan waiver in 2009, he said, “Loan waivers do no good to anybody. Those actually disrupt the credit cycle. The financiers’ cycle breaks and it causes problems for the future,” he said, while participating in an interactive session organised by Centre for Research in Rural and Industrial Development (CRRID) here on Friday.
Speaking on the issue of farmers suicides, Rajan said it is a very complicated issue that should neither be taken lightly nor should an easy and rushed explanation be offered to the tragic incidents of suicides.