RBI proposes ban on NBFCs offering revolving credit products
The Reserve Bank of India (RBI) just proposed new rules for nonbank financial companies (NBFCs), making it tougher for them to offer revolving credit products like credit cards.
NBFCs shall only offer credit products which are in the nature of term loans and shall not offer any revolving credit products, except for NBFCs already authorized by the RBI to issue credit cards.
NBFCs need ₹100cr and RBI approval
NBFCs will only be allowed to give term loans with fixed repayment plans, unless they already have RBI approval to issue credit cards.
If an NBFC wants to start offering its own credit card, it will need at least ₹100 crore in net-owned funds and must get direct permission from the RBI.
The RBI says this is all about balancing innovation with financial safety, and it is open to feedback before finalizing things.