RBI Seeks Feedback on Revolving Credit Restrictions for NBFCs

The Reserve Bank of India is reviewing revolving credit offerings by non-bank entities due to concerns regarding potential risks of debt recycling and rising household indebtedness.

Rural India, where seasonal income accounts for 46% to 50% of GDP, has increasingly relied on revolving credit as a financial shield against shocks.

The central bank's scrutiny aims to address how specific repayment patterns in these credit products might conceal the true extent of financial liabilities for borrowers.