Summary

A workshop on the RBI circular on regulatory measures in consumer credit by banks and NBFCs was held to discuss the implications of the circular. The circular was a response to concerns about the increasing growth of consumer credit and aimed to address the potential risks associated with it. The circular introduced four measures, including an increase in risk weights applicable to consumer credit for banks and NBFCs, an increase in risk weights for bank lending to NBFCs, and the establishment of sectoral limits for consumer credit. The circular had an immediate implementation deadline of February 2024. The workshop also discussed the definition of consumer credit and the exclusions from the risk weights.