Liquidity Lifeline: RBI Eases Bank Lending Norms for NBFCs

To increase liquidity, the Reserve Bank of India is rolling back the 25 basis point increase in risk weights for bank lending to non-banking financial companies (NBFCs) that was instituted since November 2023. Effective April 1, 2025, the risk weights will revert to an approach that is determined by the credit rating of the NBFCs, which will lower the capital requirements of the banks for such exposures. This has come as a response to a major slowdown in corporate credit to NBFCs and tighter market liquidity for a conducive flow of lending into the disadvantaged sectors. 

 

Source: Business Standard