Key Points
Credit cards segment is seeing the sharpest increase among all the categories of retail loans and that much of it flowing to the subprime segment could make the regulator worry as the unsecured personal loans did in the recent past...
Even after the Reserve Bank of India imposed higher risk weights on unsecured lending by banks in mid-November 2023, credit card outstanding is the fastest growing segment at 34 percent on-year as of end November..
The outstanding dues were at Rs 2.4 lakh crore, which is 5 percent of retail loans...
"In the case of credit cards, per live borrower credit outstanding is higher for the below prime borrowers suggesting a higher flow of credit to relatively riskier borrowers" economists at the RBI wrote in a research paper titled Dynamics of Credit Growth in Retail Segment: Risk and Stability Concerns...
The Reserve Bank increased risk weights on consumer loans from banks, non-banking finance companies (NBFCs) and credit card providers, making it more expensive for lenders across the spectrum to offer loans in these segments in its November 16 circular...
You might be interested in
RBI ups consumer loans’ risk weights
17, Nov, 23Borrowers would have to shell out more as lenders try to compensate for the increase in capital requirement
How RBI's new regulations on consumer credit will affect fintech lenders
25, Nov, 23The Reserve Bank of India (RBI) has tightened norms for consumer credit as it asked banks and NBFCs to assign a higher risk weight for unsecured personal loans
Personal loans may get costlier as RBI flags risks
17, Nov, 23India Business News: The Reserve Bank of India has increased the risk weight on consumer credit, making it costlier for banks and non-banks to lend to this segment. The mo
RBI tightens capital norms for unsecured retail loans
17, Nov, 23The Reserve Bank of India (RBI) increased risk weights on consumer loans from banks, non-banking finance companies (NBFCs) and credit card providers, making it more expensive for lenders across the spectrum to offer loans in these segments. That will mean higher interest rates for all borrowers.
NBFCs should remain cautious on lending; need not go too far in their enthusiasm: FM
23, Nov, 23New Delhi, Nov 23 (PTI) Finance Minister Nirmala Sitharaman on Thursday said NBFCs and small finance banks need to remain cautious while lending as suggested by the Reserve Bank. Speaking at ‘DATE with Tech’ event here, Sitharaman cautioned that NBFCs and small finance banks should respect the red line and should not go too far […]
PSU banks told to tighten loan risk assessment
15, Oct, 23It has also asked them to focus on the acquisition of high-quality current and savings accounts. Banks will carry out regular stress testing and adopt risk-based profitability models in all loan portfolios, said an official, who did not wish to be identified. The government nominees on the bank board will also ensure that such stress analysis reports are part of the agenda and are discussed in all relevant board meetings, the official said.