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RBI Confounded In Its Incrementalism Maze — Read Systematix' Analysis
In the latest order, effective April 1, the risk weights for banks on lending to NBFCs and MFIs will be restored to the pre-Nov ’23 situation, adds Systematix.
28 Feb 2025, 09:35 AM IST 
The Reserve Bank of India's latest move to relax the risk weightage of bank lending to NBFC and microfinance companies by revoking the Nov-23 order does not come as a surprise.
(Photo Source: NDTV Profit)
In Nov’23, given the exuberant retail lending, accentuated by aggressive lending to NBFCs and MFIs, RBI had sought to tighten the norm by increasing the risk weight by 25% for lending to such entities assigned based on the external risk assessment.
