Borrowers Beware: RBI’s New Norms for Personal Loans

The Reserve Bank of India (RBI) has introduced new norms that make it harder for borrowers to get multiple personal loans. Starting January 1, 2024, lenders must update credit bureau records every 15 days instead of monthly. This aims to reduce delays in credit evaluations and improve risk assessments by lenders.

Key Points:

• Frequent Updates: Lenders must update credit records every 15 days, giving a clearer and more current view of a borrower’s financial activity.
• Reduced Over-Leveraging: The new rule aims to prevent borrowers from taking multiple loans beyond their repayment capacity.
• Improved Risk Assessment: More frequent updates will help lenders capture defaults or payments more accurately. This reduces the chances of over-leveraging.
• Impact on Borrowers: Borrowers seeking multiple personal loans will face increased scrutiny. This makes it harder to qualify for multiple loans simultaneously.

The RBI believes this change will foster a healthier lending environment by ensuring more reliable data for decision-making.