Indian Banks and Paytm Curtail Small Personal Loans Following RBI Directive

The move, prompted by concerns over soaring demand and higher risk, impacts the availability of small personal loans and sees Paytm's stock price tumble by 20%.

Indian banks and non-bank lenders have asked their fintech partners to limit issuing small personal loans, following a clampdown by the Reserve Bank of India (RBI) due to concerns over soaring demand and higher risk.
Paytm, a leading digital payments firm, announced plans to slow down on loans under 50,000 rupees (about $600), marking the first such move since the RBI's directive.
The decision is not expected to sever ties with fintech partners, but will impact the availability of small personal loans in the market.
Paytm's stock price fell by 20% following the announcement, also affecting Aditya Birla Capital, a key lending partner.
Industry estimates suggest that overall loan growth will moderate to 12%-14%, down from above 15%.