Unsecured loan growth to moderate after RBI norms on lending: NBFCs

The growth of unsecured loans among non-banking financial companies (NBFCs) is likely to moderate after the Reserve Bank of India's (RBI's) decision to increase the risk weightage of bank loans, said the top management of such lenders during the India Debt Capital Market Summit 2023 organised by Trust Group.

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"There is a good reason to believe that unsecured lending will slow down and correspondingly the interconnectedness between NBFCs and banks will also come under pressure after the RBI's signal,” said Jairam Sridharan, managing director (MD) of Piramal Capital & Housing Finance.

Earlier, after repeated caution on surging unsecured loans, the RBI increased the risk weightage for unsecured loans to 125 per cent from 100 per cent for banks and NBFCs.