Stepping in to address the build-up of risks and institute safeguards to stave off stress in the banking system, the Reserve Bank of India (RBI) Thursday increased the risk weights on the exposure of banks to consumer credit, credit card receivables and non-banking finance companies (NBFCs) by 25 percentage points up to 150 per cent.
Indian banks have seen a sharp rise in unsecured loans — mostly personal loans and credit cards — that has outpaced the overall bank credit growth of about 15 per cent over the past year, catching the Reserve Bank of India’s (RBI) attention.
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