New Delhi ,
Most people resort to personal loan and credit card to meet their financial needs. Indian banks and non-banking finance companies (NBFCs) issue unsecured loans such as credit cards and personal loans. However, now it may be difficult to get a credit card and take a personal loan. The Reserve Bank of India has tightened some rules. RBI has tightened the rules related to unsecured loan portfolio of banks and non-banking financial companies.
Which rules did RBI tighten?
The Reserve Bank of India (RBI) issued a release last Thursday regarding unsecured loans of banks. The central bank said in this that now banks and non-banking companies will need to set aside more capital for unsecured loan portfolio. This capital will be 25 percent more than before. Whereas earlier 100 per cent capital was kept separate, now banks and non-banking finance companies will be required to keep 125 per cent capital separate. Suppose a bank gives a personal loan of Rs 5 lakh, earlier it had to keep aside only Rs 5 lakh, but now the bank will have to keep aside 25 percent more, Rs 6 lakh 25 thousand.
Why did RBI take such a decision?
In recent times, rapid growth has been seen in personal loans and credit cards. Last year, unsecured loans outpaced bank loan growth by a large margin. Especially an abnormal increase was seen in credit and personal loans. While the number of personal loans and credit cards has increased, the cases of default have also increased and the cases of timely payment have decreased. In such a situation, RBI has tightened the rules of this type of loan.
What will be the impact on customers?
Due to this loan rule of Reserve Bank of India, banks and non-banking finance companies will have to keep more capital separately. This means that banks and non-banking finance companies will have less money left for unsecured loans, due to which customers may face problems in taking such loans. Besides, banks and ABFC can also decide some criteria.
This rule will not apply to which type of loan?
The Reserve Bank of India has clarified on which type of loans this rule will not be applied. Generally there are two types of loans, secured and unsecured loans. Unsecured loans include personal loans and credit cards. Whereas secured loans include home loan, car loan, gold loan and property loan etc. Such loans are secured because something or the other is kept with the banks in return for it. This rule of RBI will not affect secured loans.