Financial crisis rocked the financial markets across the world and the world is still not able to recover from that. In India we saw very little impact of the same.
However, did we learn from the mistakes of the USA and Europe?
It seems we have not yet taken any learning from the crisis.
I say this because; still in India it is very easy to obtain credit with very little documentation. Loans like home loans are still lent out with loads of paperwork.
But, credit card debts and personal loans etc. are lent out on the basis of salary only.
The banks do not even check the total amount of loans on a single person. That makes it very easy for a person to be under a huge debt.
Salary is not a good guarantee in India, especially with lack of labor rules people are fired indiscriminately during recession; with no notice pay on the basis of lack of performance. In such a scenario and lack of any social security benefits, how can one pay back the massive amounts of debt?
Home loans in a way are secured because the house is an asset that can be sold. But this theory failed in US and European markets where the house values dipped during the crisis.
Clock is ticking and if not the banks, we as individuals should take good care when taking loans. It is an individual's responsibility. A commitment to sustainable development.
