Repaying Chinese loans is not easy because unlike other official lenders such as the World Bank that provide finance at concessional, below-market interest rates, and longer tenures, China tends to lend at market terms, at interest rates close to those prevailing in private capital markets. Additionally, the Chinese insist on collateral, meaning that debt repayments are secured by assets or future revenues.
Over four decades ago, the most popular retail banking product was the pygmy deposit account. Housewives would scrape together a few rupees everyday and give it to a savings collector who would visit their homes. The money collected was deposited in a bank account that paid interest and was insulated from the daily demands of life. Depositors squirreled away a decent sum by the end of the year. The simple motivation was: Save money even if it is only a few pennies at a time. This was a sure way to build wealth
The accusation was followed by Rao's allegation that the Central government’s policies have caused huge revenue loss for Telangana.
