Current Affairs · Banking Regulations
Under the regulatory guidelines applicable to Non-Banking Financial Company-Micro Finance Institutions (NBFC-MFIs), which of the following statements correctly describes the criteria for household income, loan nature, and indebtedness caps?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The household income limit for microfinance eligibility is capped at 500,000 rupees per annum, allowing up to 60 percent of monthly income as repayment.
- 2NBFC-MFIs are strictly prohibited from charging interest rates exceeding 24 percent per annum under all circumstances.
- 3Microfinance households are categorized by an income limit of 125,000 rupees in rural areas and 200,000 rupees in urban areas, with a total indebtedness cap of 150,000 rupees.
- 4A microfinance loan is defined as a collateral-free loan to a household having an annual income up to 300,000 rupees, where the periodic repayment obligations for all loans cannot exceed 50 percent of the monthly household income.✓
Correct answer
A microfinance loan is defined as a collateral-free loan to a household having an annual income up to 300,000 rupees, where the periodic repayment obligations for all loans cannot exceed 50 percent of the monthly household income.
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