SwiffyLabs Positions Lending Platform to Support RBI's Proposed Shift to Term Loans for NBFCs

BENGALURU — The Reserve Bank of India's (RBI) recent draft regulations proposing restrictions on revolving credit facilities for most non-banking financial companies (NBFCs) could initiate a notable shift in how lenders design and manage credit-line products.

Under the proposed framework, NBFCs would generally be required to offer credit products structured as term loans rather than revolving facilities. In traditional revolving facilities, the repayment of principal automatically restores the available borrowing limit. The proposed changes impact lending products that currently rely on drawdown, repayment, and redraw mechanisms.

While the regulatory update requires lenders to reassess product structures, it also introduces a technical challenge. NBFCs will need lending platforms capable of supporting multiple drawdowns, individual repayment schedules, amortization, and servicing workflows while ensuring that repaid principal does not automatically replenish the sanctioned limit.

Bengaluru-based financial technology firm SwiffyLabs announced that its lending platform is already equipped to support this construct. The platform features a non-revolving credit-line structure that allows NBFCs to maintain the operational flexibility of multiple drawdowns within an approved sanction. Simultaneously, it ensures that principal once repaid does not replenish the available sanctioned amount.

This capability aims to provide lenders with a technology-led pathway to adapt existing products to the proposed regulatory framework without completely redesigning customer journeys. The function is particularly relevant for products such as Loan Against Securities (LAS) and other credit-line offerings that traditionally depend on flexible drawdown and repayment mechanisms.

Commenting on the regulatory shift, Vivek Sinha, VP Products at SwiffyLabs, said, "Regulatory changes of this nature require lenders to rethink not just their product structures, but also the underlying technology that manages those products. Our objective has always been to build a lending platform that can give financial institutions the flexibility to launch and adapt credit products while maintaining strong regulatory alignment."

Sinha added that the non-revolving credit construct demonstrates how technology can assist NBFCs in responding to evolving regulatory requirements without compromising user experience.

The broader RBI framework is expected to prompt NBFCs to evaluate their existing credit products, technology architecture, and operational processes. For lenders with significant exposure to revolving or flexible credit products, the capacity to transition to compliant structures without extensive technology redevelopment will likely become a key operational consideration.

SwiffyLabs operates as a technology platform for the banking, financial services, and insurance (BFSI) sector. It enables financial institutions to build, launch, and scale digital financial products through an integrated suite comprising Lending, Payments, and SwiffyLabs Studios. Its modular technology stack spans loan origination, loan management, collateral management, risk workflows, and servicing across multiple credit products.

"Regulatory shifts by central banks always create immediate operational challenges for financial institutions, particularly when existing product lines rely heavily on legacy structures like revolving credit. Technology adaptability is critical in such transitions. Platforms that can preemptively configure non-revolving credit constructs and term-loan mechanics without disrupting customer journeys will offer significant value to NBFCs seeking compliance speed and cost efficiency." — Dr. Shishir Gupta, Founder & CEO, StartupLanes