RBI drafts rules to make small loans safer and fairer
Business
The Reserve Bank of India (RBI) is rolling out draft rules to make small loans safer and fairer.
Lenders will need a clear, board-approved pricing policy that factors in things like your credit history, with the goal of stopping shady lending and crazy-high interest rates.
RBI draft targets ₹50,000 loans
These new rules target microfinance and personal loans up to ₹50,000, setting an APR ceiling (though the exact limit isn't out yet).
The RBI also wants to stop NBFCs from offering revolving credit, so "pay-later" and flexi-loans may look different soon.
Experts say this could help curb wild interest rates (some apps have charged over 400%!), but it might also make it tougher for people without a credit record to get loans.
If finalized, expect these changes on 1 April 2027.