Team Blitz India
NEW DELHI: The Reserve Bank of India (RBI) is stepping up its scrutiny of retail lending targeting new areas including mortgage-linked top-up loans, on concern about rising risks to the financial system, a source said. The RBI is tightening its supervision of the industry and nudging individual lenders to rein in credit in areas where it sees increased risks, although it has not taken any formal enforcement action, the sources with direct knowledge of the process told Reuters.
The RBI has taken a string of measures over the past six months to rein in some retail lending by banks and non-bank financial firms, and publicly warned them against all forms of exuberance.
But the new scrutiny, essentially a shot across the bow for financial firms, marks a change for the RBI, which as recently as September said India’s credit expansion did not point to building systemic stress.
