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NBFCs gain momentum as RBI eases bank lending norms

Mint Chennai

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February 28, 2025

The business environment is set to turn favorable for non-banking financial companies (NBFCs), thanks to two recent developments.

- Manish Joshi

The business environment is set to turn favorable for non-banking financial companies (NBFCs), thanks to two recent developments. On Tuesday, the Reserve Bank of India (RBI) eased risk-weight norms for bank lending to NBFCs, reducing it from 125% to 100%, from 1 April. This move should lower the capital adequacy ratio needs of banks for such lending, freeing up more funds for NBFCs. The measure follows a 25 basis points (bps) repo rate cut on 7 February and is likely to ease investor concerns about systemic growth.

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