Loan News · 4 November 2026 · 3 min read
In short: Big NBFCs (non-bank lenders) are redesigning their flexi loans because the RBI has proposed that most NBFCs offer only term loans. Bajaj Finance launched new term-loan versions without withdrawals from 1 November 2026, and Tata Capital is testing changed flexi products. About ₹2 lakh crore of revolving credit is outstanding at NBFCs, out of a roughly ₹30 lakh crore total loan book, per Shriram Finance’s Umesh Revankar.
What the RBI has proposed
A flexi loan, or revolving credit, gives you a limit. You can withdraw, repay and withdraw again without a new application. A term loan gives you a fixed amount that you repay on a schedule. Once repaid, the limit does not come back.
- The RBI released the draft rules in August 2026. They are not final yet, and would apply immediately once notified.
- Only NBFCs that the RBI allows to issue credit cards are exempt.
- On 7 October, RBI Governor Sanjay Malhotra said the rule clarifies existing norms rather than adding a new one, signalling no softening.
- Lender bodies have asked for exemptions for small business products like supply-chain finance, but none have been granted so far.
Who is affected
| Lender | Exposure (estimates as reported) |
|---|---|
| Bajaj Finance | About 15% of consolidated AUM in revolving products (IIFL Capital) |
| Tata Capital | 3-4% of loan book; flexi loans about 2-2.5% |
| All NBFCs | About ₹2 lakh crore revolving credit outstanding |
NBFCs make up about 47% of new-to-credit consumer loans, meaning many first-time borrowers use them. Fitch Ratings has said the overall impact on NBFC portfolios may not be significant.
What it means for you
- If you have a flexi loan from an NBFC, watch for messages from your lender. Ask how your existing limit will be handled and whether the interest or EMI changes.
- In a flexi loan you usually pay interest only on what you use. In a term loan you pay interest on the full amount from day one, so borrow only what you need.
- Future top-ups may need a fresh approval, which can mean new processing fees. Ask about all charges first.
- Credit cards and bank overdrafts are not covered by this rule, but card interest is far costlier. Use cards only if you can pay in full.
- Check your monthly payment on our EMI calculator and compare lenders on our loans page.
What to watch next
The final RBI circular will decide how much of the ₹2 lakh crore must be restructured, and whether any small business products get relief. Smaller digital lenders could see bigger changes than large NBFCs.
Sources
- Elets BFSI (citing Mint): RBI revolving credit curbs, NBFCs rework loans (4 Nov 2026)
- Indian Opinion: NBFCs redesign loan products as RBI sticks on revolving credit curbs (4 Nov 2026)
- Business Today: RBI proposes ban on revolving credit by most NBFCs (7 Aug 2026)
This is a news summary for education, not investment advice. Figures are as reported on or before 4 November 2026; check official sources before making decisions.