Rolls back risk weights hiked on NBFC credit in November 2023
In November 2023, the Reserve Bank of India had increased the risk weights on banks credit exposures to NBFCs by 25 percentage points over and above the risk weight associated with the given external rating) in all cases where the extant risk weight as per external rating of NBFCs is below 100%. The RBI had highlighted an increasing dependency of NBFCs on bank borrowings.Now, the RBI has decided to roll back this November 2023 risk weights hike of 25 percentage points and restore the risk weights applicable on bank exposure to NBFCs prior to November 2023 circular.
The revised risk weights would come into effect from 1 April 2025.
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