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Why the RBI’s measures for NBFCs may not ease the sector’s pain ?

Aside from lowering repo rate and reducing risk weights for consumer credit5 to boost lending, the RBI also undertook two measures to ease the ongoing pain in the NBFC sector. In a bid to free up banks’ capital, the RBI raised the permissible bank’s exposure limit to single NBFC to 20 per cent of Tier I capital from 15 per cent earlier. It has also allowed bank lending to NBFCs for further on-lending to agriculture, micro and small enterprises and housing—to be counted as priority sector lending. Please click on the linkfor full report: Why the RBI’s measures for NBFCs may not ease the sector’s

 

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