RBI’s proposed revolving-credit curbs put Bajaj Finance’s growth model in focus
A proposed RBI framework that would bar NBFCs from replenishing revolving credit lines could pressure customer acquisition, fee income and yields. Bajaj Finance has about 15% of AUM exposed, versus high single- to low-double-digit exposure at Tata Capital and under 1% at Cholamandalam.
What happened
RBI’s proposed ban on replenishing revolving credit lines for NBFCs could curb customer acquisition, fees and yields. Bajaj Finance faces the highest exposure,
Key facts
- Bajaj Finance revolving credit exposure: about 15% of assets under management
- Tata Capital exposure: high single-digit to low double-digit percentage of portfolio
- Cholamandalam Investment and Finance exposure: less than 1%
Why this matters
The rule change could increase the strategic value of lending platforms and portfolios with lower revolving-credit dependence, while making Bajaj Finance’s exposed customer-acquisition model less attractive for expansion partnerships.
What to watch
- RBI publication of final framework, definitions of revolving credit and replenishment, and any exemptions for existing accounts or specific products.
- Effective date and transition period, especially whether legacy lines may continue until maturity.
- Bajaj Finance disclosure of revolving-line AUM, active customer counts, yields, fee contribution, repeat-loan conversion and product-level delinquency.
- Management commentary on expected AUM-growth, NIM, fee-income and operating-expense effects.
- Evidence of banks or card issuers targeting customers displaced from NBFC revolving programs.
- Changes in competitor product design at Tata Capital, Cholamandalam and other large NBFCs.
- Any rise in customer churn, merchant-sales conversion declines or higher acquisition costs following product changes.
- Redesign revolving-line journeys into installment conversion, explicit re-underwriting and pre-approved term-loan offers.
- Prioritize retention of high-quality repeat borrowers through loyalty, merchant financing and cross-sell rather than automatic line refreshes.
- Expand bank partnerships, co-lending and card-linked distribution where regulated bank balance sheets can support alternative revolving products.
- Reassess customer-acquisition economics by channel, with reduced spend on cohorts whose profitability depends on repeat revolver utilization.
- Build transition plans for affected borrowers, including communications, repayment alternatives and revised credit-limit governance.
- Increase emphasis on secured, SME, consumer-durable and other products with lower exposure to the proposed replenishment restriction.