Microfinance Lenders Should Not Charge High Interest: RBI has instructed microfinance institutions that they can fix the interest rate of the loan with certain
conditions, but cannot charge more interest from the customers because these charges and rates Will be under the supervision of the central bank. Let’s know the details.
RBI has given a big relief to the borrowers who have taken or taken loans from micro finance companies (institutions). Micro finance companies charge arbitrary interest from their customers, so the RBI has clearly told the microfinance institutions that they
can fix the interest rate of the loan with conditions, but cannot charge more interest from the customers. Because these fees and rates will be under the supervision of the central bank.
RBI has given this instruction to these companies, such customers whose income is up to three lakh rupees annually, those families will have to give loans without any guarantee. Earlier this loan limit was Rs 1.2 lakh for rural lenders and Rs 2 lakh for urban lenders. Let us tell you that this new rule of RBI will be applicable from April 1, 2022.
Companies cannot charge arbitrary interest
RBI has issued guidelines for this. According to this directive, ‘Micro finance companies will have to fix a limit on the charges related to the loan. That is, these companies cannot charge arbitrary interest from customers.
Along with this, all regular units should implement a policy approved by the Board of Directors. In this, clarity has to be brought about micro finance loan price, cover, interest rate ceiling and all other charges.
