Source: RBI RBI has increased the 'Risk Weights' on various c | ECONOMY by VIVEK SINGH

Source: RBI

RBI has increased the 'Risk Weights' on various category of loans as RBI Governor thinks that these category of loans could be risky in future. Governor had also raised the issue of more lending by banks to NBFCs. (Just have a look, no need to go in detail)

How it will impact?
When Banks and NBFCs calculate 'Capital Adequacy Ratio (CAR)' then there is a 'risk weight' multiplied in the 'assets' in the denominator which increases the denominator and reduces the CAR. So Banks & NBFCs will now require more capital (equity and bond) to maintain the CAR as per BASEL III Norms.

CAR = Capital/Risk weighted Assets
https://bit.ly/3SdghTR