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RBI Reverses Higher Risk Weights on Bank Loans to NBFCs and Microloans

Kumari Sonali

RBI Reverses Higher Risk Weights on Bank Loans to NBFCs and Microloans:

The Reserve Bank of India (RBI) has decided to reverse its 2023 decision to increase risk weights on bank loans to non-banking financial companies (NBFCs) due to the slowdown in bank credit growth. This move, effective from April 1, 2025, is expected to free up capital for banks, improve lending to NBFCs, and provide clarity on risk weights for microloans.

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