The Reserve Bank of India (RBI) is preparing to further harden the rules of personal loans, such as personal loans, credit card rules. The risk of default is increasing in the unscrupulous debt. The RBI is worried about this. In November 2023, the RBI had increased the risk weight on these loans from 100% to 125%, but more tough steps are necessary.
Now Personal Loan based on credit score
RBI has instructed banks to tighten the policies of giving their loans. Debers will have to fix the maximum limit of loan based on credit score. If a person has already taken a home loan or auto loan, banks need to take additional precautions while giving personal loans.
RBI worried due to rapid growth of retail loan
Based on negotiations with banks, the NDTV profit has come to know that RBI is concerned about the rapid growth of retail loans and the risks hidden in it. The annual growth in personal loan in March 2024 was 14% (at the same time 17.6%). Private banks are still giving these loans rapidly, while the focus of public sector banks is low.
Important point of RBI report
According to the Financial Stability report of December 2023, the number of debt waiver (right-off) in private banks has increased rapidly, which is a sign of risk.
RBI’s next step
The Reserve Bank of India may issue a draft of these new guidelines soon (in the next 15 days). Banks are expected to be more vigilant about these loans and will give loans only to qualified borrowers. This step of RBI is to prevent the common people from taking over loans and make the banking system safe.
