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RBI modifies norms for registered NBFCs

04 Aug 2012 Evaluate
The Reserve Bank of India (RBI) giving relaxation to the guidelines for all NBFC-MFIs, has allowed MFIs to charge more than 26% as interest rate on loans given to borrowers, such that the average interest rate on loans does not exceed the average borrowing cost plus the margin during a financial year.
 
It has further notified that registered non-banking financial companies (NBFCs) intending to convert to non-banking financial company-micro finance institutions (NBFC-MFI) must seek registration with immediate effect, and, in any case, not later than October 31. For conversion, the registered NBFC should maintain net owned funds (NOF) of Rs 3 crore by March 31, 2013 and Rs 5 crore by end-March 2014 and in case, if they fail to have adequate funds, their lending to the microfinance sector will be restricted to 10 percent of total assets.

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