Unsecured lending norms proactive for sustainability: Shaktikanta Das

Reserve Bank of India (RBI) Governor Shaktikanta Das said that the recent tightening of norms for unsecured lending is a proactive and specific measure aimed at promoting sustainability.

Speaking at the annual FIBAC event, Das clarified that certain segments, such as loans for housing and vehicle purchases, as well as those availed by small businesses, were excluded due to their positive impact on overall growth.

The FIBAC event is jointly organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Indian Banks' Association (IBA).

Das highlighted that the macroprudential measures recently announced by the RBI are preemptive, calibrated and targeted. He underlined the importance of stress testing for banks, indicating that while he does not currently foresee new stress building up in the banking system, it is crucial for lenders to continue such evaluations.

Addressing the performance of non-bank finance companies-microfinance institutions (NBFC-MFIs), Das noted some are reporting higher interest margins. He advised them to exercise flexibility in setting rates, granted by the RBI, judiciously.

He also commended the Indian rupee for exhibiting "low volatility and orderly movements" despite the elevated US treasury yields. This statement comes amid recent depreciation in the local currency to new lows.

Additionally, Das advocated for reforms in agricultural marketing and connected value chains. He stressed that such reforms are essential for sustaining high growth, ensuring durable price stability, and mitigating price shocks in the economy.

(With PTI inputs)