RBI Reverses Risk Weight Increase on Bank Loans to NBFCs and Microloans
| Summary/Static | Details |
|---|---|
| Why in the news? | RBI Reverses Higher Risk Weights on Bank Loans to NBFCs and Microloans |
| Aspect | November 2023 Decision |
| --- | --- |
| Risk Weights on NBFC Loans | Increased by 25 percentage points (if below 100%) |
| Bank Loan Growth to NBFCs | Declined from 15% (Dec 2023) to 6.7% (Dec 2024) |
| Overall Bank Credit Growth | Dropped from 20% to 11.2% |
| Microloan Risk Weights | 125% for all microloans |
| Impact on NBFCs | Higher borrowing costs, reliance on capital markets & ECBs |
| Impact on Banks | Higher capital requirements |