Banks should focus more on cash-flow based lending, says RBI Governor

In this regard, credit bureaus and the proposed Public Credit Registry (PCR) framework can improve the flow of credit as well as credit culture in the country, according to the governor

Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday said banks must focus more on cash-flow based lending instead of relying on collaterals for their lending decisions. 

"To improve the credit to gross domestic product (GDP) ratio, access to credit and cost of credit need to be addressed by lesser reliance on collateral security and greater cash-flow based lending," the RBI governor said at a webinar on investor education organised by National Council of Applied Economic Research (NCAER). 

In this regard, credit bureaus and the proposed Public Credit Registry (PCR) framework can improve the flow of credit as well