Points to Remember:
- The Reserve Bank of India has raised the lending cap for MFIs (microfinance institutions) to 1.25 lakh, against the earlier limit of 1 lakh, to improve credit availability in rural and semi-urban areas.
- It has also been decided to “increase the household income limit for borrowers of non-banking financial companies-micro finance institutions (NBFC-MFIs) from the current level of 1 lakh for rural areas and 1.60 lakh for urban/semi urban areas to 1.25 lakh and 2 lakh, respectively.”
- Taking into consideration the important role played by MFIs in delivering credit to those in the bottom of the economic pyramid and enable them to play their assigned role in a growing economy, the Reserve Bank of India (RBI) observed in its Statement on Developmental and Regulatory Policies.
RBI Policy Rates at a Glance:
- Policy Repo Rate: 5.15%
- Reverse Repo Rate: 4.90%
- Marginal Standing Facility Rate: 5.40%
- Bank Rate: 5.40%
- CRR: 4%
- SLR: 18.75%
Important Possible questions based on above News:
- Recently, the Reserve Bank of India has raised the lending cap for microfinance institutions to ___ against the earlier limit of 1 lakh, to improve credit availability in rural and semi-urban areas. 1.25 lakh