Economics · Economy
Under the RBI's Master Direction on Microfinance Loans, what is the maximum permissible limit for the 'Fixed Obligation to Income Ratio' (FOIR) to prevent household over-leveraging?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 160 percent for urban households and 40 percent for rural households.
- 2There is no specific percentage cap, provided the borrower has a valid credit score above 700.
- 3The total monthly loan repayment obligations of a household should not exceed 50 percent of the monthly household income.✓
- 4The total monthly loan repayment obligations of a household should not exceed 30 percent of the monthly household income.
Correct answer
The total monthly loan repayment obligations of a household should not exceed 50 percent of the monthly household income.
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