Business · Companies · 7 hrs ago
NBFCs prepare alternatives as RBI proposes curbs on revolving credit
India’s non-bank lenders are developing alternatives to revolving credit as they prepare for proposed restrictions from the Reserve Bank of India.
Revolving credit lets borrowers draw money, repay it and borrow again within an approved limit, which can help businesses manage working capital.
The RBI’s August draft would require most non-bank financial companies to offer term loans with fixed repayment schedules instead, without allowing repaid principal to be borrowed again.
Bajaj Finance has introduced new term-loan options, while Tata Capital is testing modified products and plans more trials.
Tata Capital says it expects to shift more than half of its flexi-credit portfolio to modified products, much of which serves small businesses.
Some other large lenders say revolving credit makes up only a small part of their loan books, while one estimate puts such facilities across NBFCs at about ₹2 lakh crore.
Lenders are preparing while the RBI’s final rules remain pending, and some say a full ban could temporarily affect lending and profits.
NBFCs are developing alternatives to revolving credit as they prepare for proposed Reserve Bank of India restrictions.
The RBI’s August draft says NBFCs, except authorised credit card issuers, would offer only term loans with predetermined repayment schedules.
Bajaj Finance has introduced term-loan variants, while Tata Capital is testing modified flexi-loan products.
Tata Capital expects to convert more than half of its flexi-credit portfolio into modified products without revolving facilities.
Revolving credit exposure across NBFCs is estimated at about ₹2 lakh crore, compared with a total loan book of roughly ₹30 lakh crore.
- Who
- NBFCs, including Bajaj Finance and Tata Capital, are preparing alternative loan products. The RBI has proposed the restrictions.
- What
- NBFCs are adapting lending products ahead of proposed limits on revolving credit.
- When
- The RBI issued its draft in August. Companies described their preparations in October and November 2026.
- Where
- India.
- Why
- The companies are seeking to protect lending volumes and retain customers. The RBI’s reason for proposing the restrictions is not stated.
This story does not have two clearly opposing sides.
The RBI’s draft proposed that NBFCs, except authorised credit card issuers, offer only term loans.
Bajaj Finance’s Rajeev Jain said the company was launching term-loan variants that did not allow withdrawal.
Tata Capital’s Rajiv Sabharwal said the company had tested some alternatives and would test remaining variants in early November.
Bajaj Finance’s new term-loan variants were introduced.
Tata Capital planned to begin testing its remaining modified flexi-loan variants.
- RBI draft
- Issued in August; proposes term loans only for NBFCs except authorised credit card issuers
- Bajaj Finance
- Introduced term-loan variants on November 1
- Tata Capital flexi-credit
- About 2–2.5% of its loan book
- Tata Capital MSME share
- Roughly 90% of its flexi-credit business
- Cholamandalam revolving-credit share
- 0.6–0.7% of its loan book, or about ₹1,600 crore
- NBFC revolving credit
- Estimated at about ₹2 lakh crore, against a total loan book of roughly ₹30 lakh crore
What people are saying
We are already launching a set of different variants of term loans on November 1st which do not allow withdrawal
Our modified products are almost at a similar price like the flexi loans