Why converting purchases to EMIs may no longer get you a discount
- Banks push customers to convert their shopping purchases to EMIs but this carries interest and other charges.
Last week, the Reserve Bank of India (RBI) issued two important directives that will have far-reaching consequences for the personal loan segment. One, it asked the country’s largest consumer goods financier Bajaj Finance Ltd to stop lending through two of its loan products. Two, it increased the risk weights— the money set aside by banks and non-banking financial companies (NBFCs) for loans to cover credit risk—in the personal and retail loan categories to 125% from the earlier 100%.