Date:19/01/2008 URL: http://www.thehindubusinessline.com/2008/01/19/stories/2008011952790600.htm

Back RBI slashes risk weights on education loans

Our Bureau

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.