Reserve Bank of India (RBI) Deputy Governor Rajeshwar Rao has raised concern over excessive borrowing in unsecured loans and the euphoria in derivative capital markets. Mr. Rao said this while addressing the 2nd Annual Conference on Macroeconomics, Banking, and Finance in Mumbai today. The conference was jointly organised by IIM Kozhikode and the National Stock Exchange.

The RBI Deputy Governor said the temptation of short-term gains can easily overshadow the long-term financial security of individuals. He pointed out that while RBI, along with other financial sector regulators, is taking steps to educate the customers, financial sector entities also need to shoulder part of the responsibility. Mr. Rao said that financial entities have a duty to ensure that customers fully understand the risks associated with leveraged products and speculative investing.