Reserve Bank of India moves on Religare demerger, credit limits and NBFC revolving‑credit curbs
The Reserve Bank of India (RBI) has rejected Religare Enterprises' proposal to demerge its lending and insurance businesses into two separately listed companies. The regulator sent letters to Religare Enterprises and its subsidiary Religare Finvest on August 6‑7, declining the request without providing detailed reasons. The company said it will seek clarification from the RBI.
In a separate circular dated August 7, the RBI excluded fresh Foreign Currency Non‑Resident (FCNR‑B) deposits of three‑to‑five‑year tenor and NRE term deposits of three years or more from the calculation of Adjusted Net Bank Credit for priority‑sector‑lending targets. The exclusion applies only to amounts that qualify for cash‑reserve‑ratio and statutory‑liquidity‑ratio exemptions and takes effect immediately.
The RBI also released draft regulations for rural cooperative banks, proposing higher housing‑loan limits that vary with a bank’s deposit size (up to ₹3 crore per borrower for banks with deposits over ₹10,000 crore). It suggested new precautionary exposure caps of 20% of Tier‑1 capital for a single borrower, 25% for a group of borrowers, and up to 30% for a Primary Agricultural Credit Society, while retaining a 15% cap on total real‑estate exposure.
Finally, the RBI’s draft directions to restrict revolving‑credit facilities for non‑banking financial companies (NBFCs) would limit such products to entities authorised to issue credit cards. Morgan Stanley warned that flexi and overdraft loans across corporate, MSME and personal segments could be affected, though it believes the industry can redesign products and that the impact may be limited if the rules are applied uniformly or only to new loans. Market reaction to the draft curbs saw Bajaj Finance shares fall 5.55% on August 3, the steepest intraday decline in four months.
Entities: Bajaj Finance · Morgan Stanley · Non-banking financial companies · Religare Enterprises · Reserve Bank of India · Rural Cooperative Banks · non‑banking financial companies
Claims
What the coverage asserts, and how well corroborated each claim is across sources.
- [● 3 SOURCES] Morgan Stanley warned that flexi and overdraft loans by NBFCs could be impacted by the RBI’s draft revolving‑credit curbs. (Morgan Stanley report cited in multiple articles)
- [○ 1 SOURCE] The RBI rejected Religare Enterprises' plan to split its lending and insurance businesses into two listed companies. (RBI decision communicated on August 6‑7)
- [○ 1 SOURCE] The RBI indicated that the impact of the revolving‑credit curbs could be mitigated if the rules apply only to fresh loans and existing facilities are grandfathered. (RBI draft discussion as reported by Morgan Stanley analysis)
- [○ 1 SOURCE] The RBI excluded fresh FCNR(B) deposits of three‑to‑five‑year tenor and NRE term deposits of three years or more from Adjusted Net Bank Credit calculations for priority‑sector‑lending targets. (RBI circular RBI/2026-27/232 dated August 7, 2026)
- [○ 1 SOURCE] The RBI set precautionary exposure limits of 20% of Tier‑1 capital for a single borrower, 25% for a group of borrowers, and up to 30% for a Primary Agricultural Credit Society in rural cooperative‑bk (Same draft regulations for rural cooperative banks)
- [○ 1 SOURCE] Bajaj Finance shares fell 5.55% on August 3, marking the steepest intraday decline in four months. (Market data reported by Business Today)
- [○ 1 SOURCE] The RBI proposed raising housing‑loan limits for rural cooperative banks, with caps ranging from ₹60 lakh to ₹3 crore per borrower depending on the bank’s deposit size. (Draft Rural Cooperative Banks – Concentration Risk Management Directions, 2026)
- [● 3 SOURCES] The RBI’s draft directions aim to restrict revolving‑credit facilities for NBFCs, allowing them only for entities authorised to issue credit cards. (RBI draft directions on revolving credit, August 2026)