Small and worrying: Loans under Rs 50K are on Reserve Bank of India's radar

Regulator wants banks and fintechs to review exposure limits for consumer credit

The Reserve Bank of India (RBI) is monitoring loans with a ticket size of up to Rs 50,000 on the books of banks and fintech lenders. A majority of consumers in this segment services three “live” loans, and it is suspected this could be an indication of evergreening with the possibility of diversion into capital markets.

The scrutiny should be seen in the context of the RBI in November asking regulated entities (REs) to review their exposure limits for consumer credit and put in place board-approved limits for various sub-segments, specifically unsecured consumer credit exposures, by February 29,