The Reserve Bank of India has changed the rules for giving people loans. Now, banks and other loan companies have to keep more money aside when giving loans for things like personal expenses.
This change is for all loans, whether they are new or old. However, loans for buying a home, education, a car, or using gold as collateral are not included in this new rule.
The amount of money set aside, called risk weightage, has been increased by 25%, making personal loans more expensive. This change starts right away.
For regular banks
In the new rules, the risk weightage for personal loans from banks has gone up from 100% to 125%.
This applies to both new and old loans. Personal loans are now included in this change. But, loans for buying a home, education, a car, or using gold as collateral are still separate.
For other loan companies
For companies that give loans (NBFCs), the risk weightage for personal loans used to be 100%, but now it’s increased to 125%.
This is for all types of loans, whether they are new or old. However, loans for buying a home, education, a car, or using gold as collateral are not affected by this change.
Microfinance loans and loans for self-help groups are also not included in this new rule.
