RBI loan ban: The Reserve Bank of India (RBI) has implemented stringent measures impacting banks and non-bank financial institutions to address burgeoning consumer credit risks. Fitch Ratings highlighted these changes as a credit-positive step. Concerns arose due to the surge in unsecured credit card and personal loan growth, prompting regulatory action.
SBI s retail loan book grew over 16.46 per cent to ₹12,04,279 crore in the June 2023 quarter from ₹10,34,111 crore in the year-ago period, making it the largest asset class for the lender whose total book stood at ₹33,03,731 crore, growing at 13.9 per cent on-year.
The move, aimed at ensuring better collections, comes amidst rising level of retail lending in the system coupled with increasing delinquency levels on the back of the upward movement in the interest rates.
India's central bank has cautioned lenders at meetings held over at least the past three months about the growing risk of delinquencies on unsecured loans amid rising interest rates and high inflation.