Consider the following statements regarding the RBI's regulatory framework for microfinance loans: Statement 1: For a loan to qualify as a microfinance loan, it must be collateral-free and the borrower’s annual household income must not exceed the uniform ceiling of 3 lakh rupees across both rural and urban areas. Statement 2: The framework stipulates that the total monthly loan repayment obligations of a household must not exceed 50% of its monthly income, counting all existing loans from both formal and informal sources. Statement 3: Regulated Entities are prohibited from charging any prepayment penalty on microfinance loans and must provide a standardized Key Facts Statement (KFS) displaying the Annual Percentage Rate (APR). Which of the following describes the validity of these statements?

Question

Accepted Answer

All three statements are correct and form the core of the RBI's microfinance regulations.

Answer

Only Statement 3 is correct, as the other statements have been completely revised.

Answer

Statement 2 and Statement 3 are correct, but Statement 1 is incorrect.

Answer

Only Statement 1 and Statement 3 are correct, while Statement 2 is incorrect.

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