Indian banks ask fintech partners to limit tiny personal loans amid regulatory glare -sources

FILE PHOTO: A man walks behind the Reserve Bank of India (RBI) logo inside its headquarters in Mumbai, India, April 8, 2022. REUTERS/Francis Mascarenhas/File Photo

MUMBAI (Reuters) - Top Indian banks and non-bank lenders have asked their fintech partners to curtail issuing tiny personal loans, three banking and one industry source said on Thursday, weeks after the central bank clamped down on the fast-growing business.

Paytm plans to go slow on sub-50,000-rupee-loans (about $600), it said Wednesday, the first to announce such a move since the Reserve Bank of India, last month, told banks to set aside more capital to cover personal loans and lending via NBFCs on concerns that soaring demand could lead to higher risk.