Mathematics · Aptitude and Financial Literacy
Kavita runs a small poultry farm. She has an active microfinance loan with a monthly EMI of Rs 4,000. Her husband earns Rs 10,000 a month, and she earns Rs 8,000 a month from her business. She applies for a new loan with a proposed monthly EMI of Rs 5,000. Under the RBI guidelines for microfinance loans, where the total monthly loan repayment obligations must not exceed 50% of the household income: 1. What is the total monthly household income? 2. What is the total monthly repayment obligation if the new loan is sanctioned? 3. Can the bank sanction the loan under RBI's 50% FOIR (Fixed Obligation to Income Ratio) rule?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11. Rs 8,000; 2. Rs 9,000; 3. No, because the new total obligation exceeds her individual business income.
- 21. Rs 18,000; 2. Rs 4,000; 3. Yes, because the old loan is from an NBFC-MFI and the new one is from a bank.
- 31. Rs 18,000; 2. Rs 9,000; 3. No, the bank should reject it because hitting exactly 50% violates the threshold.
- 41. Rs 18,000; 2. Rs 9,000; 3. Yes, the bank can sanction it as it exactly hits the 50% limit.✓
Correct answer
1. Rs 18,000; 2. Rs 9,000; 3. Yes, the bank can sanction it as it exactly hits the 50% limit.
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