Financial Services – Sector Update – RBI proposes curbs on revolving credit/ flexi loans
Published on 07 Aug 2026
Proposed RBI amendments could require NBFCs to redesign existing revolving credit products; we believe diversified NBFCs to be better placed to mitigate disruption through alternative product offerings. Flexi loans contribute ~13% of BAF’s portfolio (largely MSME loans); we expect a small impact on margin due to the loss of flexi premium. Moreover, the MSME segment has seen subdued growth over the past 4-5 quarters due to high stress in the portfolio. We expect recovery to be further delayed due to the new guidelines.
