Technology has lowered the cost of information processing and facilitated the growth of information bureaus, making information about households and small businesses more readily available. This information has allowed some institutions to substitute credit scoring for more costly traditional techniques in the underwriting of some types of consumer and small-business loans, particularly credit card loans.
The purport of the above explanation is to show how, despite not being part of the global financial sector problem, India has been affected by the crisis through the adverse feedback loops between external shocks and domestic vulnerabilities. How have we responded to the challenge? Let me now turn to how we responded to the crisis.