Now Reading: RBI Seeks Comments on Rural Bank and NBFC Lending Rules
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RBI Seeks Comments on Rural Bank and NBFC Lending Rules
The Reserve Bank of India has released draft changes to lending rules for rural co-operative banks and non-banking financial companies, seeking public comments by August 28, 2026. The proposals for rural co-operative…
The Story in Brief
The Reserve Bank of India has released draft changes to lending rules for rural co-operative banks and non-banking financial companies, seeking public comments by August 28, 2026. The proposals for rural co-operative banks set prudential exposure limits for single and group counterparties and unsecured advances, while raising housing loan limits.
For rural co-operative banks with deposits above Rs 1,000 crore, the draft would allow greater flexibility over housing-loan tenors and moratoriums. It also proposes withdrawing sectoral exposure limits, except for real estate. The separate NBFC amendment draft covers credit facilities, but the RBI release gives no further details. Feedback can be sent through Connect 2 Regulate or email.
The Indian Opinion
Claims that the RBI is simply loosening lending rules miss the safeguards on counterparty and unsecured exposure. The opposite claim, that every rural bank will gain the same freedom, is also inaccurate because the added housing-loan flexibility is limited to banks above the Rs 1,000 crore deposit threshold. The useful test is whether the final directions control bad loans without restricting viable housing credit. The RBI’s final exposure limits will provide that measure.
Sources (2): rbi.org.in, rbi.org.in (2)
This story was synthesised by AI from the 2 sources linked above.
