Essay on Finance For Lending, India 's Banking System

776 Words Nov 30th, 2016 4 Pages
India, is a developing country, that is strongly built through its exports, has a constant rate of economic growth per year, and the country that was least affected by the global financial crisis, out of the three. When looking at 2008 to 2010, even though this was when the crisis transpired, India was still able to have a GDP growth rate over 2%. This did not mean that India was able to avoid the financial crisis, but rather dampen the effects of it, relative to the United States of America. In this section, we will take an in depth look at finance for lending , India’s banking system, and the financial systems in place during 2008.

India’s banking structure is drastically different then the United States of American and very unique compared to many countries around the world. There is a Central bank in India, called the Reserve Bank of India; this central bank is given power to control and manage many aspects of the banking system, one in particular credit policies. The Reserve Bank of India is known as one of the strongest central banks in the world, due to the fact of its sound policies and management that it employs. The Reserve Bank of India was one of the only banks to put a pause on loans before the crisis occurred, forecasting what might take place. This bank as mentioned before has a lot of power and because of this would not allow just anyone to get credit, unless they met the standards. India capital ratio is about 12.5%, they base lending on income, and do…

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