RBI's MFI Regulations Harmonised; Level-Playing Field Uplifts Scope For NBFCs-MFIs: ICICI Securities

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

The Reserve Bank of India has proposed a harmonised and lender-agnostic regulatory regime for micro finance institution operations.

As per the proposal, the central bank clearly uplifts the scope for non banking financial companies-MFIs, bringing them on a common framework with banks, small finance banks and NBFCs.

Key takeaways include:

1. Remove the cap not only on the ticket size of Rs 0.125 million but also maximum number of lenders at two (applicable only to NBFCs-MFIs). However, to protect customer from over-indebtedness, it proposes to cap the loan amount at 50% of the household income.

2. Remove pricing cap for NBFCs-MFIs and all regulated entities to adopt a board-approved pricing policy and communicate to borrowers in a transparent manner.

3. MFI loans will continue to remain collateral free.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.