Don't Aggressively Push Loans, Keep Interest Rates Reasonable: FM To NBFCs

Finance Minister Nirmala Sitharaman on Wednesday asked NBFCs not to aggressively market or push loans to customers and said financial inclusion cannot be used as a pretext for "financial exploitation”.

- Press Trust Of India

She also asked non-banking financial companies (NBFCs) to adhere to the Reserve Bank of India’s loan recovery norms strictly, and keep interest rates at reasonable levels.

Addressing an NBFC Symposium 2025 here, Sitharaman said there should be deep collaboration between NBFCs and banks, especially through co-lending arrangements for providing loans to the priority sector.

“Financial inclusion cannot be used as a pretext for financial exploitation,” she said, adding that the lending should be based on the genuine needs and repayment capacity of customers.

Loans should not be aggressively marketed or pushed onto individuals, the minister said, stressing that the recovery process should be fair, empathetic and in a respectful manner, in strict accordance with the RBI's Fair Practices Code.