RBI still assessing revolving credit norms: Sanjay Malhotra
Reserve Bank of India governor Sanjay Malhotra has indicated that regulations on revolving credit by non-banking finance companies are under review. The RBI issued draft norms limiting NBFCs to term loans without revolving credit options. Malhotra said that systemic risks linked to these changes will be thoroughly evaluated before reaching a decision.
Reserve Bank of India (RBI) governor Sanjay Malhotra revealed that the regulator is still assessing the norms for revolving credit products offered by non banking finance companies (NBFCs). Malhotra stated that such products were never regulatorily approved and the proposed changes will be finalised after evaluating the current situation.
Speaking at a post policy press conference, Malhotra added that surplus liquidity in the banking system should not negatively impact the asset quality of NBFCs. He emphasised that the draft framework on revolving credit is merely a clarification and that NBFCs were previously forbidden from offering such products. The regulator has received feedback from various stakeholders and is currently studying it to form a fresh opinion on the matter. Any decision will consider the potential risks of systemic disruption.
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