May 15, 2025 - The Reserve Bank of India (RBI) is preparing to tighten the rules for unsecured personal loans and credit cards, say reports. The RBI believes that the risk of default is increasing in such types of loans, which necessitates stricter regulations.

As per reports, the RBI is pushing some lenders to tighten thresholds for unsecured loans and also set a limit for unsecured personal loan amounts depending on the borrower’s credit rating. Therefore, going forward, if RBI implements the above then the maximum loan limit will be determined based on the borrower's credit score.

Additionally, if a person has already taken a home loan or auto loan, banks have been instructed to exercise extra caution while approving personal loans for such individuals. The Central Bank has also urged banks to be more vigilant in sanctioning such loans and to ensure that loans are given only to eligible borrowers.

The RBI is expected to issue a draft of the new guidelines within the next 15 days.

Source: Media Reports