An Economic Times opinion report highlights a potential trade-off in the RBI’s proposed approach to flexi loans. The curbs are intended to tackle evergreening of bad debt, but the report warns that they could also limit a useful borrowing option for self-employed workers and small businesses.

The central concern is how to separate misuse from genuine working-capital needs. Flexible borrowing can serve a purpose for these borrowers, according to the report. Restricting that option could therefore have consequences beyond the bad-debt practices that the proposed measures seek to address.

The report’s argument favours safeguards rather than bans. It frames the policy question as whether stronger oversight can control misuse while keeping useful credit available. That is a distinction between addressing problems in lending and restricting the borrowing option itself.

However, the supplied extract does not set out the proposed restrictions, their scope or an implementation timetable. It also does not state which lenders or specific loan arrangements would be covered. The practical impact on borrowers and banks therefore cannot be assessed in detail from the information provided.