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.

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