In fact, this is a good point - but only restricted to the long run. In the long run, this money may return to India again as investment.
In fact, reducing the floating rate may achieve this objective. It may allow many borrowers to actually pay back - that brings more money into the system and stabilises it.
India should also have lower interests in these periods of growth. I don't know why it hasn't. India has full chances of subprime crises in the future - who will bail us out? The banks here give loans to just about anybody for amounts like crores for a flat. The greed of the bankers and the developers combined may cause big time harm to india.
