Devanjana Mukherjee, Khabri Media
The new regulations are a response to the evolving financial landscape and aim to strike a balance between promoting responsible lending practices and safeguarding the interests of consumers.
Pic: Social Media
In a move aimed at regulating the financial sector and maintaining stability, the Reserve Bank of India (RBI) has introduced new regulations that are set to have a profound impact on the cost of personal loans and credit cards. These regulations come at a time when the financial landscape is undergoing significant changes, and consumers are increasingly relying on credit to meet their diverse needs.
To subscribe please click tau.id/2iy6f and access our live channel.
The Reserve Bank of India (RBI) has strengthened regulations for personal loans and credit cards by increasing the amount of capital that is required. The new guidelines may slow the expansion of credit cards and personal loans and increase their costs.
ALSO READ: Credit Card scam in Gurugram
According to a statement from the RBI, the central bank increased the capital requirements that banks must keep aside for each loan by 25 percentage points, to 125 percent for retail loans, for lenders and non-bank financial firms (NBFCs).
The RBI further stated that loans secured by gold and gold jewellery, as well as those related to housing, education, and cars, would not be accepted. The new risk weight will be applied to retail loans for NBFCs and personal loans for banks.
Pic: Social Media
As personal loans and credit cards become costlier, consumers are advised to reassess their financial strategies and make informed decisions. They should explore alternative financing options, such as secured loans or peer-to-peer lending platforms, to potentially secure more favorable terms.
While the cost of personal loans and credit cards may rise in the short term, consumers can navigate these changes by staying informed, exploring alternative financial avenues, and maintaining a proactive approach to managing their finances.
The RBI’s new regulations are a response to the evolving financial landscape and aim to strike a balance between promoting responsible lending practices and safeguarding the interests of consumers. While the cost of personal loans and credit cards may rise in the short term, consumers can navigate these changes by staying informed, exploring alternative financial avenues, and maintaining a proactive approach to managing their finances.
