Not much impact on margins: RBL Bank on RBI norms for unsecured loans

Despite having the highest credit card portfolio in terms of retail assets at over 42 per cent, private sector lender RBL Bank does not see much impact on its margins after the RBI increased the risk weight on unsecured lending.
Following a massive rise in unsecured lending and delinquencies, the Reserve Bank on November 16 tightened the norms for unsecured consumer credit, asking banks and NBFCs to assign a higher risk weight.
As a result, it has increased the risk weight on unsecured consumer loans by 25 percentage points to 125 and to 150 for credit cards. This had analysts pegging the capital cost, on banks alone, going up at least by Rs 84,000 crore.
“Our capital (CET 1 ratio) cost will go by 60 bps because of the RBI action, but the impact on our margin will be negligible at 1-2 bps only,” the bank’s chief executive and managing director R Subramaniakumar told reporters on the sidelines of the IBA-Ficci-organised national banking summit here on Wednesday.
The bank’s capital .