Recently, the Reserve Bank of India raised risk weights on consumer loans, credit card exposures, and loans to non-bank financiers by 25 basis points.
Background
Concerns of High Growth: RBI’s response to abnormally high growth in unsecured lending portfolios of banks and NBFCs.
Sharp Rise: Unsecured loans, especially personal loans and credit cards, surpassed overall bank credit growth by approximately 15% in the past year.
About the News Guidelines:
The RBIincreased the risk weights for banks and NBFCs by 25 percentage points to 125% on retail loans.
Risk Weights: The capital that banks need to set aside for every loan.
Applicable Loans
Banks: New risk weight applies to personal loans.
NBFCs: Applies to retail loans, excluding housing, education, vehicle loans, and loans secured by gold and gold jewellery.
Specific Changes
Credit Card Exposures: Risk weights increased by 25 percentage points to 150% for banks and 125% for NBFCs.
Additional Guidelines
Board-Approved Limits: Requirement for all banks and NBFCs to establish board-approved limits for unsecured consumer credit exposures.
Treatment of Top-Up Loans: Top-up loans against depreciating movable assets (e.g., vehicles) are considered as unsecured loans for credit appraisal and exposure purposes.
Connect with our experts to get free counselling & start preparing
Aiming for UPSC?
Download Our App
Know about Physics Wallah
Physics Wallah is an Indian online education platform, that provides accessible & comprehensive learning experiences to students of classes 6 to 12 and those preparing for JEE and NEET exams. We also provide extensive NCERT solutions, sample papers, NEET, JEE Mains, BITSAT previous year papers, which makes us a one-stop solution for all resources. Physics Wallah also caters to over 3.5 million registered students and over 78 lakh+ Youtube subscribers with 4.8 rating on its app.
We Stand Out because
We successfully provide students with intensive courses by India's qualified & experienced faculties. PW strives to make the learning experience comprehensive and accessible for students of all sections of society. We believe in empowering every single student who couldn't dream of a good career in engineering and medical field earlier.
Our Key Focus Areas
Physics Wallah’s main focus is to create accessible learning experiences for students all over India. With courses like Lakshya, Udaan, Arjuna & many others, we have been able to provide a ready solution for lakhs of aspirants. From providing Chemistry, Maths, Physics formulae to giving e-books of eminent authors, PW aims to provide reliable solutions for student prep.
What Makes Us Different
Physics Wallah strives to develop a comprehensive pedagogical structure for students, where they get a state-of-the-art learning experience with study material and resources. Apart from catering students preparing for JEE Mains and NEET, PW also provides study material for each state board like Uttar Pradesh, Bihar, and others.
Aiming for UPSC?
Download Our App
Quick Revise Now !
AVAILABLE FOR DOWNLOAD SOON
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format Integration of PYQ within the booklet Designed as per recent trends of Prelims questions हिंदी में भी उपलब्ध
Quick Revise Now ! UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format Integration of PYQ within the booklet Designed as per recent trends of Prelims questions हिंदी में भी उपलब्ध
<div class="new-fform">
</div>
Subscribe our Newsletter
Sign up now for our exclusive newsletter and be the first to know about our latest Initiatives, Quality Content, and much more.