Major NBFCs are seeking a meeting with the RBI over its proposed restrictions on revolving credit facilities
The industry says products with more than ₹2 lakh crore in AUM could be affected
RBI officials have sought industry feedback while stressing stronger compliance and risk management
NBFCs Seek RBI Review Of Proposed Curbs On Revolving Credit
The industry is expected to submit a formal representation through the Finance Industry Development Council this week
RBI
Summary
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India's leading non-banking finance companies (NBFCs) are seeking a review of the Reserve Bank of India's (RBI) proposed restrictions on revolving credit products, while the central bank has sought industry feedback and stressed the need for stronger compliance and risk management.
Lenders including Bajaj Finance, Tata Capital and Shriram Finance are looking to meet RBI officials to discuss concerns over the draft RBI (NBFC-Credit Facilities) Amendment Directions, 2026, issued on August 6, as per a report by The Economic Times (ET).
Senior representatives of some of the country's largest NBFCs met on August 14 to finalise the issues they intend to raise with the regulator, as per ET.
The industry is expected to submit a formal representation through the Finance Industry Development Council this week.
NBFCs plan to argue that the proposed framework, which would allow them to offer only term loans and not revolving credit facilities, could affect products with aggregate assets under management exceeding ₹2 lakh crore.
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The industry has said that nearly 90% of such lending serves MSMEs and individuals, as per ET.
Lenders are also concerned that the move could create an uneven playing field, as banks would continue to offer similar working-capital and short-term liquidity products.
RBI Stresses Stronger Controls
RBI officials met senior NBFC executives on Friday and sought their views on the draft framework for revolving credit facilities.
During the meeting, the central bank emphasised robust internal audit, compliance and risk-management systems, particularly for products witnessing rapid growth, as per a report by NDTV Profit.
It also asked lenders to identify risks from new products and technology-led business models at an early stage.
The RBI further discussed the role of self-regulatory organisations, consumer grievance redressal and compliance with digital lending norms and the Digital Personal Data Protection Act.
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The discussions come as the regulator seeks to strengthen oversight of a rapidly evolving NBFC sector while aligning aspects of regulation with global standards.