RBI asks banks to monitor personal loan,
The Reserve Bank of India, abbreviated as RBI, is India’s central bank and regulatory body responsible for regulation of the Indian banking system. It is under the ownership of Ministry of Finance, Government of India. It is responsible for the control, issue and maintaining supply of the Indian rupee. RBI orders banks to observe personal loan.
MUMBAI: The RBI in concerned about the strong growth in personal loans. He is watching out many stress in that segment, asks banks, NBFC’s to strengthen their surveillance mechanisms.
Demands of personal are recorded very high. India among top 3 nations with highest 5 G base, roll-out remarkable. Considering this surge in personal loans, Das Feels that lenders must maintain robust risk management and stronger underwriting standards. While there are no explicit concerns, that surge in personal loans may heighten risks going ahead.
RBI Deputy Governor J Swaminathan,
RBI has concerned about the use of the unsecured personal loans for purposes such as investments in capital markets. In which have the potential to substantially increase financial stability risks. Rise of low cost or not cost brokerage firms has made access to capital markets much easier for a retail investor than ever before.
The composition of bank credit has witnessed substantial change over time with an increasing proportion of credit now going to services and retail loans relative to industry. Amid these structural changes, the impact of bank credit on GDP growth appears to have strengthened. The central bank also said that for urban co-operative banks (UCB’s), it would double the exciting limit for gold loans under its bullet repayment scheme to approximately 4 lakh. This would be applicable only for those UCBs that have met ‘the overall target and sub-targets under the priority sector lending.’ So, Reserve Bank of India asks banks to monitor personal loans.
