Personal loans may get costlier as RBI flags risks

The Reserve Bank of India has increased the risk weight on consumer credit, making it costlier for banks and non-banks to lend to this segment. The move requires banks to set aside more capital, increasing the cost of borrowing for top-rated finance companies. The new norms will not affect home, auto, or education loans. While NBFCs do not expect an across-the-board increase in retail lending rates, they may face a bigger impact from the tighter norms.