NBFCs to Tweak Funding Mix as RBI Eases Norms

Indian non-banking financial companies (NBFCs) are likely to tweak their funding pattern in the upcoming financial year, as the Reserve Bank of India's relaxation of some lending norms could nudge banks to increase funding to this segment.

- Reuters

MUMBAI:

The RBI partially reversed tighter rules for bank loans to NBFCs, trimming risk weight requirements for banks on consumer microfinance loans by 25 percentage points to 100% and effectively reverting to the earlier risk weight requirements. This will "free up capital for banks, allowing them to lend more to NBFCs," said George Alexander Muthoot, managing director, Muthoot Finance, adding that this will also make bank funding more attractive for NBFCs.