1. Priority Sector Lending (PSL) Guidelines by RBI
- Objective: To enhance credit flow to priority sectors and foster inclusive growth.
- Changes:
- Increased Limits:
- Education Loans: Raised limits to encourage access to education financing.
- Renewable Energy Loans: Expanded support for financing renewable energy projects.
- Affordable Housing Loans: Increased limits for loans under affordable housing schemes.
- Increased Limits:
- Impact: These changes are expected to boost lending to key sectors that contribute to economic growth and social welfare.
Risk Weights on Bank Loans to Non-Banking Financial Companies (NBFCs)
- Change: The RBI has restored the risk weight on bank loans to NBFCs from 125% to 100%.
- Effective Date: April 1, 2025.
- Impact: This adjustment reduces the capital burden on banks lending to NBFCs, helping the sector deal with higher borrowing costs.
New Guidelines for UPI Transactions
- Implemented by: National Payments Corporation of India (NPCI).
- Changes:
- Mobile Number Record Updates: Banks and Payment Service Providers (PSPs) must update mobile number records weekly to reduce transaction errors.
- Opt-In Requirement: UPI users must explicitly opt-in for seeding their UPI numbers.
- Purpose: These guidelines are aimed at enhancing security and reducing fraudulent transactions in the UPI ecosystem.
ATM Charges Increased
- Change: The maximum fee that banks can charge for ATM cash withdrawals has been increased to ₹23.
- Effective Date: May 1, 2025.
- Previous Limit: ₹21.
- Impact: The fee hike may lead to increased costs for customers withdrawing cash from ATMs.
Revised SRO Guidelines for Micro Finance Institutions (MFIs)
- Implemented by: RBI-recognized Self-Regulatory Organization (SRO) for MFIs, MFIN.
- New Guidelines:
- Borrower Limit: A borrower will not be able to obtain loans from more than four lenders simultaneously.
- Objective: This rule aims to reduce over-borrowing and mitigate the risk of excessive debt burdens on borrowers.
Prompt Corrective Action (PCA) Framework for Urban Cooperative Banks
- Change: The existing Supervisory Action Framework (SAF) for weak Urban Cooperative Banks (UCBs) will be replaced by the PCA framework.
- Effective Date: April 1, 2025.
- Key Criteria for PCA:
- Consecutive Losses: Banks incurring losses for two consecutive years.
- Net NPAs: Net Non-Performing Assets (NPAs) above 6% but below 9%.
- Capital Adequacy Ratio (CAR): CAR up to 250 basis points below the required level.
- Impact: The PCA framework is designed to be principle-based, with fewer parameters, providing RBI with more flexibility to address financial stress in UCBs.