RBI Tightens Rules for Personal Loans and Credit Cards; SBI Expects Minimal Impact

The new rules are expected to make loans costlier and slow growth, but SBI has already moderated growth in the unsecured personal loans segment.

The Reserve Bank of India (RBI) has tightened rules for personal loans and credit cards, raising the risk weights for banks and non-bank financial companies (NBFCs) by 25 percentage points to 125% on retail loans.
State Bank of India (SBI), the country's top lender, expects minimal impact on its capital ratios from the central bank's tighter rules for personal loans.
The higher capital requirement will make loans costlier and crimp growth, according to bankers and analysts.
SBI has already moderated growth in the unsecured personal loans segment, maintaining about 15% growth in its retail loan portfolio this fiscal year.
The tightening by lending partners will impact many startups, most of whom rely on NBFCs to extend loans to consumers.