Live
- Horoscope Today: Astrological Prediction November 6, 2024 for All Zodiac Signs
- GAIL clocks net profit of Rs 2,672 crore in Q2
- Dubai Fitness Challenge is Here!
- Sr Men's National Hockey: Delhi, Karnataka, Bengal, A.P. win group matches on Day 2
- ‘Nation is proud of you’: West Bengal Guv to GRSE on laying keels of two NGOPVS
- KLH Bachupally Campus Promotes Unity Through Community Initiatives
- Kirttane, Kapadia bag golden double as India wins 14 medals in Asia Pickleball Games
- IDFC FIRST Bank leads the way in revolutionising real-time tracking of money sent abroad through Swift GPI
- Gurugram: 11 projects of GMDA worth Rs 249.77 crores approved
- Samsung R&D Institute, Bangalore Sets Up a State-of-the-Art Linguistics Lab focused on Artificial Intelligence and Machine Learning, Jointly with Garden City University, Bangalore
FM sees downside risks for NBFCs on lending
NBFCs, small finance banks should not go too far in their enthusiasm; Stresses on building awareness to curb cyber fraud
New Delhi: Finance Minister Nirmala Sitharaman on Thursday said NBFCs and small finance banks need to remain cautious, while lending as suggested by the Reserve Bank of India (RBI).
Speaking at ‘DATE with Tech’ event here, Sitharaman cautioned that NBFCs and small finance banks should respect the red line and should not go too far in their enthusiasm.
“Enthusiasm is good, but sometimes it becomes a bit too far for people to digest. So as a measure of caution the RBI has also alerted small finance banks, NBFCs to be careful that they don’t go too far too soon and face any downside risks later,” she said.
The minister further said to stop cyber frauds, where people are duped by way of a phone call or SMS, the government periodically reviews public sector banks, and regulator RBI reviews its own systems. Insurance companies also review their systems.FM assured that customer data shared with account aggregators (AA) is completely safe in India. Concerned over the slow movement of the AA scheme,
“We are constantly doing what is required. Unless awareness, unless we are able to build that alertness in the mind of people that I should not go by anything that is said on my phone is built, citizens are at risk,” Sitharaman said.
Reserve Bank Governor Shaktikanta Das on Wednesday had said the central bank’s tougher stance on unsecured loans earlier this month is a preemptive move aimed at ensuring financial stability. Following a massive rise in unsecured lending and delinquencies, the Reserve Bank on November 16 tightened the norms for unsecured consumer credit, asking banks and NBFCs to assign a higher risk weight.
As a result, it has increased the risk weight on unsecured consumer loans and on credit cards by 25 percentage points to 125-150 per cent. This had analysts pegging the capital cost, on banks alone, going up by at least Rs84,000 crore.
“It has been decided to increase the risk weights in respect of consumer credit exposure of commercial banks (outstanding as well as new), including personal loans, but excluding housing loans, education loans, vehicle loans and loans secured by gold and gold jewellery, by 25 percentage points to 125 per cent,” the RBI circular had said.
