RBI Removes Pricing Caps for Microfinance Lenders

On 14th March, 2022, the Reserve Bank of India removed caps on pricing of microfinance loans, altering the definition of what qualifies as microloans.

  • The new interest rate guidelines are based on proposals in a consultation paper the regulator had released in June 2021.

Key Highlights

  • According to the Master, all microfinance lenders must set up a board-approved policy for pricing of loans, the regulator said in its circular.
  • The new norms require that the interest rates and other charges must not be usurious in nature.
  • It has also increased the maximum limit on microfinance loans given by NBFCs that are not ....
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