Search Global Export Import Trade Data
Recent Searches: No Recent Searches

RBI tightens norms for consumer loans amid rise in unsecured lending.

Date: 17-11-2023
Subject: RBI tightens norms for consumer loans amid rise in unsecured lending
The Reserve Bank of India has asked institutions to increase the risk weights with respect to consumer credit exposure of commercial banks by 25 per cent to 125 per cent, merely a month after flagging the high growth in certain components of consumer credit and asking NBFCS, banks to strengthen internal surveillance mechanisms.

This hike includes personal loans but excludes housing loans, education loans, vehicle loans and loans secured by gold and gold jewellery.

Risk weights mean the amount of capital lenders have to keep aside to cover credit risk from a particular loan segment. The higher a risk weightage, the more amount of capital needed to be set aside by lenders for the loans

Credit growth in unsecured loans has been an outlier at about 23 per cent as compared with an average of 12-14 per cent of credit growth in the country, according to the RBI. It has even outpaced the overall bank credit growth of about 15 per cent seen over the last year.

"Banks and NBFCs would be well advised to strengthen their internal surveillance mechanisms, address the build-up of risks, if any, and institute suitable safeguards in their own interest. The need of the hour is robust risk management and stronger underwriting standards," RBI Governor Shaktikanta Das said on October 6, 2023.

RBI has also decided that the consumer credit exposure of NBFCs, which are categorised as retail loans, will now attract a risk weight of 125 per cent, up from 100 per cent before. This excludes housing loans, educational loans, vehicle loans and loans against gold jewellery and microfinance/SHG loans.

Further, credit card receivables of scheduled commercial banks, which attract a risk weight of 125 per cent, has been hiked to 150 per cent while NBFCs' risk weights have been hiked by 25 per cent to 125 per cent.

Regulated entities (REs) have been asked to review their extant sectoral exposure limits for consumer credit and put in place board-approved limits in respect of various subsegments under consumer credit as may be considered necessary.

RBI Governor Das said last month the central bank was closely monitoring some fast-growing personal loan categories for signs of nascent stress. Subsequently, Reuters reported that the RBI was particularly concerned with the surge in tiny personal loans of up to 10,000 rupees, taken for three to four months.

Source Name : Economic Times


Get Sample Now

Which service(s) are you interested in?
 Export Data
 Import Data
 Exim Help

What is New?

Date: 22-11-2023
Notification No. 13/2023 -Customs (ADD)
Seeks to further amend notification No. 47/2021-Customs (ADD), dated 26th August, 2021, imposing Anti-dumping Duty on imports of "Natural mica-based pearl industrial pigments excluding cosmetic grade" from China PR, to modify the existing duty table .

Date: 21-11-2023
NOTIFICATION No. 12/2023-Customs (ADD)
Seeks to continue levy of anti-dumping duty on "Synthetic Grade Zeolite 4A (Detergent Grade) from China PR for 5 years pursuant to First Sunset Review Final Findings issued by DGTR."

Date: 17-11-2023
NOTIFICATION No. 11/2023-Customs (ADD)
seeks to impose anti-dumping duty on toughened glass for home appliances imported from China PR for a period of 5 years.

Date: 17-11-2023
NOTIFICATION No. 54/2023- Central Tax
Seeks to amend Notification No. 27/2022 dated 26.12.2022 to notify biometric-based Aadhaar authentication for GST registration in the State of Andhra Pradesh.

Date: 16-11-2023
Notification No. 84/2023 - Customs (N.T.)
Exchange Rate Notification No. 84/2023-Cus (NT) dated 16.11.2023-reg

Date: 15-11-2023
Notification No. 83/2023 - Customs (N.T.)
Exchange Rate Notification No. 83/2023-Cus (NT) dated 15.11.2023-reg

Date: 15-11-2023
Notification No. 82/2023-CUSTOMS (N.T.)
Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver- Reg.

Date: 02-11-2023
Notification No. 16/2023- Union Territory Tax (Rate)
Seeks to amend Notification No 17/2017- Union territory Tax (Rate) dated 28.06.2017.

Date: 02-11-2023
Seeks to notify a special procedure for condonation of delay in filing of appeals against demand orders passed until 31st March, 2023.

Date: 02-11-2023
Notification No. 81/2023 - Customs (N.T.)
Exchange Rate Notification No. 81/2023-Cus (NT) dated 02.11.2023-reg

Exim Guru Copyright © 1999-2023 Exim Guru. All Rights Reserved.
The information presented on the site is believed to be accurate. However, InfodriveIndia takes no legal responsibilities for the validity of the information.
Please read our Terms of Use and Privacy Policy before you use this Export Import Data Directory.


C/o InfodriveIndia Pvt Ltd
F-19, Pocket F, Okhla Phase-I
Okhla Industrial Area
New Delhi - 110020, India
Phone : 011 - 40703001