Banker-Borrower Interplay: Synergies and Challenges

A determining aspect of the banker-borrower relationship is built on trust and understanding. It is also important that these relationships neither get too cosy nor do they get too strained as either would have deleterious consequences for the sector and the larger economy. The banking regulations in a way set the ground rules for bank-borrowers relationship, while the supervisory process ensures that this relationship remains healthy. Some of the behavioral practices that RBI expects from the bankers and the borrowers are highlighted here. Emphasize is also given on some regulatory/supervisory concerns that currently exist and could arise from unhealthy relationships between the two.