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    Question

    Why did the Reserve Bank of India (RBI) decide to roll back

    the increased risk weights on bank loans to NBFCs, effective April 1, 2025?
    A To restrict NBFC lending and reduce liquidity in the market Correct Answer Incorrect Answer
    B Due to a surge in bank loan growth to NBFCs Correct Answer Incorrect Answer
    C To boost credit flow after a sharp decline in NBFC loan growth Correct Answer Incorrect Answer
    D To encourage NBFCs to rely solely on capital markets for funding Correct Answer Incorrect Answer
    E Because NBFCs opposed RBI’s risk weight policies Correct Answer Incorrect Answer

    Solution

    RBI rolled back the increased risk weights on bank loans to NBFCs to boost credit flow after a sharp decline in NBFC loan growth, ensuring adequate liquidity.

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