Tightening of norms on unsecured lending pre-emptive, in the interest of sustainability: RBI governor Shaktikanta Das

Reserve Bank of India (RBI) governor Shaktikanta Das on November 22 said the recent tightening of norms on unsecured lending is a pre-emptive and targeted move in the interest of sustainability.

Reserve Bank of India (RBI) governor Shaktikanta Das on November 22 said the recent tightening of norms on unsecured lending is a pre-emptive and targeted move in the interest of sustainability.

Addressing the annual FIBAC event in Mumbai, he said the RBI excluded certain sections such as loans for house and vehicle purchase, and also the ones availed by small businesses, because of the advantage on the growth front they have.

The Federation of Indian Chambers of Commerce and Industry (FICCI) and Indian Banks’ Association (IBA) are jointly organising the FIBAC event.

"We have also recently announced a few macroprudential measures in the overall interest of sustainability. These measures are pre-emptive in nature. They are calibrated and targeted," Mr. Das said.

Mr. Das said he does not see new stress building up in the banking system currently, but wants lenders to continue with stress testing.

He said some non-bank finance companies-microfinance institutions (NBFC-MFIs) are reporting higher interest margins and asked them to use the flexibility in setting rates by the RBI "judiciously".