Bajaj Finance, peers seek RBI rethink on proposed revolving-credit curb

NBFCs including Bajaj Finance and Tata Capital will urge the RBI to reconsider draft restrictions on revolving credit, saying they could disrupt more than Rs 2 lakh crore in consumer and MSME lending, raise borrowing costs and tilt the market toward banks.

— Source published Mon, 17 Aug, 2026, 00:55 IST · First seen Mon, 17 Aug, 2026, 01:19 IST · Source ET Small Business

What happened

Bajaj Finance, Tata Capital and other NBFCs will ask RBI to reconsider a proposed ban on revolving credit products, warning it could disrupt over Rs 2 lakh

Key facts

  • More than Rs 2 lakh crore in affected credit products/AUM
  • 15-20% annual market growth
  • Nearly 90% of lending serves MSMEs and individuals
  • Market expected to nearly double over the next four years
  • Draft directions issued August 6, 2026
  • NBFC representatives met August 14

Why this matters

Financial-services and retail platforms should evaluate bank partnerships or acquisitions that preserve flexible consumer and MSME credit access if NBFC-led revolving finance is restricted.

What to watch

  • RBI consultation response, final circular language, implementation date, and any exemptions for MSME, co-lending, or legacy portfolios.
  • Management commentary from Bajaj Finance, Tata Capital and peers on revolving-credit book size, expected repricing, and originations impact.
  • Changes in merchant checkout approval rates, EMI conversion, average ticket size, and financing penetration during major retail sales periods.
  • Bank announcements on credit-card, personal-loan, supply-chain-finance, and co-lending expansion.
  • Evidence of rising consumer borrowing costs, lower unsecured-loan disbursals, or delinquency migration as lenders change product structures.
  • Bajaj Finance, Tata Capital and other NBFCs intensify representation through industry bodies, emphasizing MSME credit disruption and potential demand slowdown.
  • Large NBFCs review revolving-credit portfolios, tighten eligibility criteria, and prepare pricing increases or limits reductions ahead of final rules.
  • Retailers and e-commerce platforms expand bank partnerships, no-cost EMI arrangements, and merchant-funded discounts to protect checkout conversion.
  • Banks pursue co-lending and distribution partnerships with NBFCs to capture customer acquisition flow without fully building merchant ecosystems.
  • Consumer-facing lenders increase focus on fixed-tenure personal loans, durable-finance EMIs and secured lending as substitutes for revolving lines.