This website is only for informational purposes. Visitors are requested to note that the information is intended to be correct, complete, and up-to-date. Juris Corp does not warrant that the information contained on this website is accurate or complete, and disclaims any and all liability to any person for any loss or damage caused by errors or omissions, whether such errors or omissions result from negligence, accident or any other cause.

This website is not intended to be a source of advertising or solicitation. The reader must not consider the information contained herein to be an invitation for a lawyer-client relationship, must not rely on information provided herein and must seek independent advice. Transmission, receipt or use of any information on this website does not constitute or create a lawyer-client relationship. No recipients of content from this website should act or refrain from acting, based upon any or all of the contents of this website.

Furthermore, Juris Corp does not wish to represent anyone desiring representation based solely upon viewing this web site. Finally, the reader is warned that the use of e-mail for confidential or sensitive information is susceptible to inherent risks of lack of confidentiality associated with sending e-mail over the internet.

By clicking on the "I understand and agree" button below, the user acknowledges that:

  • This website is not a mode of advertisement, promotion, personal communication, or solicitation of any sort whatsoever and the user wishes to gain information about us for his/her own reasons;
  • Entering into this website does not establish a lawyer-client relationship.

We are not liable for any consequence of any action taken by the user relying on information provided under this website. In cases where the user has any legal issues, he/she must seek independent legal advice.

JC - Legal Updates - Regulatory measures towards consumer credit and bank credit to NBFCs

Legal Updates

21 Nov 2023

Regulatory measures towards consumer credit and bank credit to NBFCs

Brief Overview:
RBI through the ‘Regulatory measures towards consumer credit and bank credit to NBFCs’ dated 16th November 2023 (“Notification”), inter alia hasincreased the risk weight percentage for various credit exposures of commercial banks (“SCBs") and non-banking financial companies (“NBFCs”) to strengthen their internal surveillance mechanisms, address the build-up of risks, and institute suitable safeguards.
Technical Details:
Increase in risk weight percentage:

Credit Exposure

Erstwhile risk weight percentage

Increased risk weight percentage


Consumer Credit Exposure of SCBs



Excludes personal loans. Excludes housing loans, education loans, vehicle loans, and loans secured by gold and gold jewellery.

Consumer Credit Exposure of NBFCs



Excludes housing loans, education loans, vehicle loans, loans secured by gold and gold jewellery and microfinance/Self Help Group (SHG) loans.

Credit card receivables of SCBs




Credit card receivables of NBFCs




SCB exposure to NBFCs (excluding CICs)




Excludes loans to HFCs, and loans to NBFCs which are eligible for classification as priority sector.

Strengthening credit standards:
Regulated Entities (“REs”) shall:
1)  review their extant sectoral exposure limits.
2)  prescribe limits for unsecured consumer credit exposures.
3)  adopt necessary board-approved limits for prudent risk management.
4)  treat top-up loans extended by REs against movable assets which are inherently depreciating in nature, such as vehicles, as unsecured loans for credit appraisal.
JC takeaway:
The regulations bought through the Notification might bring correction in the market and address concerns over high growth noticed in the consumer credit segment. This will increase cost of funds and market may see increase in interest rates.
For further details, please see:  
For any queries/clarifications, please feel free to ping us and we will be happy to chat:

●   Mr. Ankit Sinha (ankit.sinha@jclex.com)
●   Ms. Rupul Jhanjee (rupul.jhanjee@jclex.com