NBFCs Want RBI to Ease Credit Line Rules: Your EMI?

India's NBFC industry body has formally asked RBI to relax its restrictions on revolving credit products like credit lines and pay-later schemes. If RBI agrees, borrowing short-term could become easier and cheaper for crores of middle-class Indians.

Here's what happened: India's NBFC industry association formally petitioned RBI to relax its current restrictions on revolving credit products, including credit lines and pay-later instruments.. RBI tightened rules on NBFC-issued revolving credit in 2023, making it harder and costlier for non-bank lenders to offer flexible credit line products to retail customers.. The industry argues that easing these norms would expand access to affordable short-term credit for millions of middle-class and lower-income borrowers currently underserved by banks..

What you should do: Compare the interest rate on your existing credit card or credit line — if it exceeds 24% annually, explore NBFC or fintech lenders who may offer lower-cost alternatives as rules evolve.. Avoid maxing out revolving credit products; RBI data shows revolving balances attract compounding interest that can double your debt in under 3 years at typical rates.. Check your credit utilisation ratio — keep it below 30% of your total limit across all revolving credit accounts to protect your CIBIL score regardless of how regulations change..

If RBI eases revolving credit norms, fintech lenders will likely be first to pass on benefits — compare their credit line offers against your bank's credit card before assuming your bank is cheaper.