Recently, the Reserve Bank of India (RBI) asked for all players in the credit card industry to be more responsible about their lending policies as well as to update them to reflect recent changes. In response, Slice has told its customers that they will have to seek fresh credit from the company! This article discusses this latest development and what it might mean for the future.
The Reserve Bank of India (RBI) has issued a directive to all financial institutions in India, requiring them to adopt a stringent lending policy of no more than 30% of the borrower’s income. This directive has forced many banks to review their lending policies and adjust their terms accordingly. One such bank is Slice, which has updated its lending policy to adhere to the RBI directive.
Slice’s new lending policy stipulates that borrowers must have a minimum annual income of Rs 8 lakhs and a maximum annual income of Rs 12 lakhs. These limits are considerably higher than the previous lending limit of Rs 2 crore. Slice also requires borrowers to certify that they will be able to repay their loan in full and on time. This certification is an added safeguard against borrowers taking out loans they cannot afford to repay.
The updated lending policy at Slice is likely to improve the bank’s reputation among borrowers and lenders alike. It is hoped that this change will lead to decreased instances of loan default and increased liquidity in the Indian loan market.
Slice lending policy update
Recently, the Reserve Bank of India (RBI) issued a notification stating that all financial institutions should update their lending policies to adhere to its guidelines. As a result, Slice has updated its lending policy to conform with these new requirements.
The updated policy includes stricter criteria for customers who want to borrow money and more stringent verification processes for borrowers. It also imposes limits on the amount that borrowers can borrow and sets a higher interest rate for loans that are offered to customers with lower credit ratings.
These changes are designed to make Slice more competitive and compliant with the RBI’s directives. They hope that this will make it easier for customers to find loans and improve the overall quality of the banking system.
Current situation of the RBI directive
The RBI has issued a directive to banks to revise their lending policies in order to adhere to the guidelines set by the central bank. The directive has come into effect on February 14, 2019. The guidelines set by the RBI state that banks should not give loans above a certain threshold to any individual or company. The threshold varies from bank to bank, but it is generally lower for small businesses than for large businesses.
The directive has caused some concern among the business community, as they fear that they will not be able to get loans from banks. There have been reports of businesses planning to go ahead with closure if they are not able to get loans from the banks.
The RBI has clarified that its directive does not mean that banks cannot lend money to companies or individuals. It just means that they should not give loans above a certain threshold. Banks can still provide credit facilities to companies and individuals, provided that they comply with the other guidelines set by the RBI.
How will this affect you?
The RBI directive, issued in December 2017, mandates all banks to adopt a uniform credit scoring system. This will affect the way loans are granted and will result in a higher cost of borrowing for borrowers.
In light of this change, Slice has updated its lending policy to adhere to the RBI directive. The new policy will result in a higher cost of borrowing for borrowers, but it will also ensure that all borrowers are treated equally and that there is no favoritism shown towards any particular group.