The RBI's move is likely to boost consumer spending in the coming festive season.
Under the standardised approach for credit risk management, all unsecured consumer credit, including personal loans and credit card receivables, which are both unsecured lending, attract a higher risk weight of 125 per cent or higher, if warranted by an external rating of the counter-party.
"On a review, it has been decided to reduce the risk weight for consumer credit, including personal loans, but excluding credit card receivables, to 100 per cent. Other stipulations remain the same," the RBI said in a statement.
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