RBI raises cap on borrowing from MFIs to Rs 1.25 lakh in rural areas

RBI raises cap on borrowing from MFIs to Rs 1.25 lakh in rural areas

• The Reserve Bank of India has increased the household income limits for borrowers of Non-Banking Financial Companies-Micro Finance Institutions (NBFC-MFIs) in rural and urban/semi urban areas as under:
  • For rural areas: Increased to Rs 1.25 lakhs from Rs 1 lakh
  • For urban/semi urban areas: Increased to Rs 2 lakhs from Rs 1.6 lakhs

• Further, the limit on total indebtedness of the borrower has been increased from ₹1,00,000 to ₹1,25,000. In light of the revision to the limit on total indebtedness, the limits on disbursal of loans have been raised from ₹60,000 for the first cycle and ₹1,00,000 for the subsequent cycles to ₹75,000 and ₹1,25,000 respectively.

Points to remember:

1. What is the household income limits for borrowers of NBFC-MFIs in rural areas?- Rs 1.25 lakhs
2. What is the household income limits for borrowers of NBFC-MFIs in urban/semi urban areas?- Rs 2 lakh