But for the last five years the banks have been asked to earmark reserves of 1.5 percent against their secured consumer loans and 3 percent against unsecured loans in their portfolios. This pool of money will enable the banks to deal with in the event they are stuck with higher defaults.
At the same time the repossession laws have been strengthened and repossession of automobiles or houses has become much easier for the banks and liquidate their collaterals against which the loans have been given. A second criticism is that the banks are fuelling the speculative activities such as stock market share trading and real estate purchases.