Among financial services firms, Aditya Birla Capital (down 5.57%), SBI Cards & Payment Services (down 5.27%), L&T Finance Holdings (down 5.15%), Ujjivan Financial Services (down 4.07%), IDFC (down 3.48%), Poonawalla Fincorp (down 3.45%), Cholamandalam Financial Holdings (down 3.36%), Cholamandalam Investment and Finance Company (down 3.14%), Manappuram Finance (down 3.05%), Piramal Enterprises (down 2.97%), Paisalo Digital (down 2.97%), Edelweiss Financial Services (down 2.91%) and IIFL Finance (down 2.76%) slumped.

The Nifty Bank index was down 1.09% to 43,681.10 while the Nifty Financial Services index was down 0.71% to 19,592.05.

The central bank's decision entails a significant increase in the risk weights for consumer credit exposure of commercial banks, encompassing both existing and new personal loans, by 25% to 125%. It is important to note that these changes are not applicable to housing loans, education loans, vehicle loans, and loans secured by gold and gold jewelry.

Additionally, the RBI has also raised the risk weights on credit card receivables by 25% to 150% for scheduled commercial banks (SCBs) and to 125% for NBFCs.

The new norms, which take immediate effect, are applicable for new as well as outstanding loans.

These adjustments are in line with previous remarks from RBI Governor Shaktikanta Das, who highlighted the swift expansion of specific consumer credit segments. Governor Das emphasized the importance of bolstering internal surveillance mechanisms within banks and NBFCs, addressing risk accumulation, and implementing appropriate safeguards to ensure financial stability.