RBI's New Rules Tend to Impact Fintech Lenders

The Reserve Bank of India (RBI) has heightened risk weights by 25% for unsecured personal loans, potentially impacting fintech lenders. This move, prompted by concerns over rising NPAs, may lead to increased financing costs and a reevaluation of underwriting practices.

The regulations, not applicable to certain loan categories, aim to enhance credit risk coverage. RBI Governor Shaktikanta Das had previously highlighted concerns about the rapid growth in consumer credit.

The impact may be more pronounced on new-age lending fintechs, potentially raising the overall cost of finance in the unsecured loan segment.

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