New Delhi, Aug. 8 -- The Reserve Bank of India (RBI) has proposed restricting non-banking financial companies (NBFCs) to offering only term loans, effectively disallowing revolving credit products under draft amendments to its Credit Facilities Directions, 2026.

Under the proposal, NBFCs will be permitted to offer only term loan products and will be barred from providing revolving credit facilities. However, this restriction will not apply to NBFCs authorised by the Reserve Bank of India (RBI) to issue credit cards, where revolving credit is an inherent feature.

Loan Types

The draft guidelines define a term loan as a fund-based credit facility with a fixed sanctioned amount, disbursed in one or more instalments and repaid according to ...