Current Affairs · RBI Regulations
Under the regulatory updates concerning credit flow, how does a reduction in risk weight on NBFC exposures to MSMEs influence the financial ecosystem?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It mandates higher capital allocation by banks for lending to MSMEs.
- 2It restricts NBFCs from accessing credit facilities from commercial banking institutions.
- 3It lowers the capital requirements for banks against loans extended to NBFCs for MSME lending, boosting credit availability.✓
- 4It completely prohibits NBFCs from participating in co-lending partnerships.
Correct answer
It lowers the capital requirements for banks against loans extended to NBFCs for MSME lending, boosting credit availability.
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