RBI releases Consultative Document on Regulation of Microfinance

It has been released for harmonising the regulatory frameworks for various regulated lenders in the microfinance space.

Reserve Bank of India has released a Consultative Document on Regulation of Microfinance. It has been released for harmonising the regulatory frameworks for various regulated lenders in the microfinance space.

Key proposals of the documents are, common definition of microfinance loans for all regulated entities, Capping the outflow on account of repayment of loan obligations of a household to a percentage of the household income.

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It also recommends a Board approved policy for household income assessment. It also asked for introduction of a standard simplified fact sheet on pricing of microfinance loans for better transparency and display of minimum, maximum and average interest rates charged on microfinance loans on the websites of regulated entities.

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