RBI Increases Risk Weights for Consumer Loans

On 16th November, 2023, the Reserve Bank of India (RBI) directed banks and non-banking financial companies (NBFCs) to increase the risk weights for consumer credit and bank credit by an extra 25 percentage points.

Key Points

  • RBI has increased it by 25 percentage points, from 100% to 125% for commercial banks and NBFCs. This applies to personal loans (and retail loans for NBFCs), excluding housing, education, vehicle loans, and loans secured by gold.
  • Presently, scheduled commercial banks have a risk weight of 125% for credit card loans while NBFCs have 100%.The RBI plans to increase this to 150% and 125%, respectively.
  • The ....
Do You Want to Read More?
Subscribe Now
To get access to detailed content

Already a Member? Login here

Take Annual Subscription and get the following Advantage
The annual members of the Civil Services Chronicle can read the monthly content of the magazine as well as the Chronicle magazine archives.
Readers can study all the material since 2018 of the Civil Services Chronicle monthly issue in the form of Chronicle magazine archives.
Be an Annual Subscriber

Economy Watch