RBI says NBFC revolving-credit ban was only a clarification
In short
The RBI said its move on NBFC revolving credit was only a clarification, not a new rule. A draft circular released on August 6 had proposed limiting NBFC lending to term loans.
This matters for NBFCs because it affects how they can lend. The reporting does not say when any final rule would apply or exactly how the clarification changes existing practice.
What the reporting says
The RBI said its ban on NBFC revolving credit was a clarification, not a new rule, after a draft circular released on August 6 proposed limiting NBFC lending to term loans. The publisher-supplied summary says the central bank was clarifying that NBFC lending should be term-loan based. The immediate consequence is less ambiguity for NBFCs, but the available reporting does not give the final circular text or effective date.
Why it matters
The RBI has clarified that its position on NBFC revolving credit is not a fresh rule, following a draft circular from August 6 that suggested term-loan-only lending. The available summary indicates the central bank wants NBFC lending to stay aligned with term-loan structures. The change matters for NBFCs because it affects product design and lending flexibility, but the final wording and timing are not provided.