What RBI has in store for banks and NBFCs: New regulation, lens on unsecured loans

The RBI has issued new regulations for private banks and NBFCs concerning unsecured loans. The regulations aim to ensure that private sector banks and non-banking financial companies (NBFCs) maintain adequate control and oversight over their lending practices. This includes stricter guidelines on assessing credit risk, especially for unsecured loans, and improved mechanisms to prevent defaults. The RBI’s move aims to strengthen the financial sector’s stability and prevent further stress on the banking system.