The Reserve Bank of India’s (RBI) recent move to tighten the risk weights on unsecured personal loans and credit cards by banks and non-bank finance companies (NBFCs) is credit positive because lenders will need to allocate higher capitals, which will improve their loss-absorbing buffers, Moody’s Investors Service said in a report on Monday.
Last week, the RBI increased the risk weights on the exposure of banks towards consumer credit, credit card receivables and NBFCs by 25 per cent up to 150 per cent.
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