RBI lifts interest cap on microfinance institutions

The RBI has released its final guidelines for microfinance loans, lifting an interest cap and allowing companies to have a board-approved policy to price for such lending.

The RBI will continue checking that microfinance institutions do not charge usurious rates. Each entity has to disclose pricing-related information to borrowers in a standardized simplified factsheet. A borrower cannot be charged any amount that has not been explicitly mentioned in the factsheet.