In India, state and local governments enjoy a time-honored system of balancing their financial books with easily available no-interest loans. Among the other favorable terms are indefinite payback periods, unlimited credit lines, and year-round availability. As you might expect, such easy credit is a godsend to financially strapped governments; and those which favor this bailout vehicle use it with annual regularity.
This arrangement is not, of course, particularly remunerative for the lender, First Bank of India. But then, First Bank of India doesn’t have the same political clout that most other financial institutions enjoy.
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