RBI’s proposed NBFC curbs put Bajaj Finance’s revolving-credit engine in focus

The RBI has proposed limiting NBFCs to term loans unless they are licensed credit-card issuers, putting flexi-loan and revolving-credit products under pressure. Bajaj Finance shares fell nearly 6%, while Tata Capital and Cholamandalam also declined amid concerns over customer acquisition, fee income and credit quality.

— Source publishedFri, 7 Aug, 2026, 15:30 IST·First seen Fri, 7 Aug, 2026, 17:04 IST·Source Mint · Industry

What happened

RBI proposes restricting NBFCs to term loans unless licensed as credit-card issuers, threatening flexi and revolving-credit products. Bajaj Finance, Tata

Key facts

  • Bajaj Finance shares fell nearly 6%
  • NBFC credit-card issuers need RBI approval and minimum net owned funds of ₹100 crore
  • Bajaj Finance flexi-loan AUM was previously 30% of total AUM
  • Revolving products are estimated at about 20% of Bajaj Finance standalone AUM
  • Tata Capital shares fell 2.8%
  • Cholamandalam Investment shares fell 3.6%
  • Tata Capital exposure estimated in high single digits to low double digits
  • Cholamandalam exposure estimated at less than 1%
  • Credit-card revolvers account for about 20% of loan books for some issuers
  • Customers may pay up to 40% interest

Why this matters

Retail and finance deal teams should reassess partnerships with NBFC lenders, prioritizing licensed card issuers and term-loan alternatives that can preserve embedded-finance demand.

What to watch

  • RBI consultation-paper deadline, final circular wording and any grandfathering or transition period.
  • Whether RBI defines flexi-loans, overdraft-like products and redraw facilities as prohibited revolving credit for non-card NBFCs.
  • Management disclosures from Bajaj Finance on the share of AUM, disbursements, fee income and customer acquisition tied to flexi-loan products.
  • Announcements of card partnerships, bank tie-ups, co-lending arrangements or applications for card-issuer permissions.
  • Monthly unsecured-loan disbursement trends, customer repeat-borrowing rates, merchant conversion and delinquency/vintage data.
  • RBI commentary on household leverage, unsecured-credit stress, digital lending and regulatory arbitrage between NBFCs and banks.
  • Bajaj Finance and other NBFCs redesign flexi-loans into fixed-tenor products, raising monthly installments and reducing customer redraw convenience.
  • Large NBFCs seek co-lending, card-issuance partnerships, bank subsidiaries or regulated issuer structures to retain revolving-credit economics.
  • Lenders tighten pre-approved offers and raise risk-based pricing as the loss of repeat utilization reduces portfolio visibility.
  • Retailers and consumer-durable merchants increase promotional EMIs, bank-card offers and captive financing tie-ups to offset weaker NBFC conversion.
  • Banks and card issuers gain negotiating leverage with merchants and may capture higher-spend urban consumers previously served through NBFC revolving lines.
  • Near-term equity valuation multiples for consumer-finance NBFCs compress until final rules clarify impacts on net interest margins, fee income and growth.

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