Reserve Bank of India has increased the risk weight for personal loans for banks by 25%.

Reserve Bank of India has increased the risk weight for personal loans for banks by 25%.

Daily Current Affairs   /   Reserve Bank of India has increased the risk weight for personal loans for banks by 25%.

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Category : Business and economics Published on: November 20 2023

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  • Recently the Reserve Bank of India has increased the risk weight for personal loans for banks by 25%.
  • Earlier the risk weight for personal loans was 100%.
  • Now it has become 125%.
  • These standards will be applicable to scheduled banks and non-banking financial companies.
  • Higher risk weighting implies that banks have to set aside more money as a buffer when it comes to unsecured personal loans.
  • In simple words, high risk weight limits the ability of banks to lend.
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