NBFCs redesign lending models ahead of revolving credit curbs

Non-banking financial companies (NBFCs) are changing the way they lend money to customers ahead of new rules that will limit revolving credit facilities. This means they are shifting their focus from offering credit lines that can be used repeatedly to providing term loans, which are repaid over a set period. The upcoming guidelines from the Reserve Bank of India are prompting this change, and companies like Bajaj Finance and Tata Capital are already adapting their products.

Why it matters

NBFCs are redesigning their lending models to comply with the upcoming RBI guidelines, which aim to limit revolving credit. This could lead to a shift in the lending landscape and impact the availability of credit for certain borrowers.

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