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RBI Draft on NBFC Revolving Credit: FIDC Concerns Explained

18 August 20261 min read
BANKING & FINANCERBI Draft on NBFCRevolving Credit:FIDC ConcernsExplained18 August 2026safalsetu.com

Why in the news

The NBFC lobby is readying objections to the draft.

Key facts

  • Draft dated 6 August: term loans only for NBFCs.
  • Finance Industry Development Council (FIDC) is the NBFC SRO.
  • Fear: regulatory arbitrage benefiting banks.
AspectTerm loanRevolving credit
MechanismFixed sum paid once, repaid on a scheduleLimit usable, repayable and usable again
ExamplesHome, vehicle, business term loansCash credit, overdraft, working capital, credit cards
SanctionFresh each timeOne time, repeated use

Exam angle

  • SRO: FIDC.

Test yourself

1. What does RBI's draft of 6 August propose for NBFCs?

The draft would bar NBFCs from revolving credit, leaving term loans.

2. Which body, the self-regulatory organisation for NBFCs, planned to raise concerns on the RBI draft?

FIDC is the NBFC sector's SRO.

3. Which of these is an example of revolving credit?

Cash credit, overdraft, working capital limits and credit cards are revolving.

This topic is part of Daily Current Affairs 18 August 2026 (19 topics).

All topics of the dayDay quizAugust 2026

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