ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
-A A +A

Differential Rates of Interest - A Comment

September 9, 1972 Differential Rates of Interest A Comment C H Hanumantha Rao IN his article "On Differential Rates of Interest" (July 1, p 1279) A K Dasgnoti observes that although banks should charge differential rates of interest with a view to discriminating in favour of the weaker customers, they should operate on commercial lines and seek to maximise profits subject to some subsidy to the weaker sections. According to him, such an operation on commercial lines is possible because banks have a monopolistic position in the credit market and the system of differential interest rates amounts to monopoly price discrimination, if only re-lending by the weaker sections can be discouraged, as the elasticity of demand for credit of the poorer sections such as small farmers is higher than that of the richer sections.

Subscribers please login to access full text of the article.

New 3 Month Subscription
to Digital Archives at

826for India

$50for overseas users

Get instant access to the complete EPW archives

Subscribe now


(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Back to Top