The Reserve Bank of India (RBI) has implemented stricter rules on personal loans, potentially leading to increased interest rates and impacting non-banking financial companies (NBFCs).
The risk weight for banks and NBFCs has been raised by 25%, affecting SBI Card and RBL Bank the most due to their reliance on unsecured loans. While home, auto, gold, and education loans remain unaffected, there's a likelihood of rising interest rates.
The move follows RBI's concern about the surge in personal loans, particularly credit card loans, emphasizing the need for banks and NBFCs to enhance surveillance and manage increasing risks.