Why is the offering of ‘teaser loans’ by commercial banks is a cause of economic concern? 1. The ‘teaser loans’ are considered to be an aspect of sub-prime lending and banks may be exposed to the risk of defaulters in future. 2. In India, the ‘teaser loans’ are mostly given to entrepreneurs to set-up manufacturing or export units. Which of the statement(s) given above is/are correct?
(A) Only 1
(B) Only 2
(C) Both 1 and 2
(D) Neither 1 nor 2
Important Facts
Teaser loans are part of sub-prime lending and increase default risk.
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