Mumbai, Oct. 7 -- The Reserve Bank of India's (RBI) recent draft circular seeking to bar non-bank financial companies (NBFCs) from offering revolving credit products is not a new proposal, but a clarification that such lenders were never permitted to offer these loans in the first place, governor Sanjay Malhotra said on Wednesday.

At the post-monetary policy conference, Malhotra said the draft proposal is not a "new rule or law," adding that individual non-banks offering such products had been warned and directed multiple times by the regulator before the draft circular was issued.

The development of digital technology has enabled non-bank lenders to offer such revolving credit products in the form of term loans, prompting the central b...