Join 60,000+ competitive exam aspirants
or with email
Your Cart
SubtotalтВ╣0
TotalтВ╣0
Examoogle тАв User тАв info@examoogle.com тАв EE-2024-8821
Chapter 1 of 12 тАв Page 1 of 248ЁЯФТ Protected PDF тАв Watermarked
Join 60,000+ competitive exam aspirants
Which institution regulates the microfinance institutions (MFIs) in India that are organized as Non-Banking Financial Companies (NBFC-MFIs)?
Reserve Bank of India (RBI)
NABARD
SEBI
SIDBI
Reserve Bank of India (RBI)
The Reserve Bank of India (RBI) serves as the primary regulator for NBFC-MFIs under the provisions of the RBI Act, 1934. All microfinance institutions operating as NBFCs are required to obtain a Certificate of Registration from the RBI and must adhere to its regulatory framework, which includes guidelines on pricing of credit and fair practices.
The Reserve Bank of India (RBI) serves as the primary regulator for NBFC-MFIs under the provisions of the RBI Act, 1934. All microfinance institutions operating as NBFCs are required to obtain a Certificate of Registration from the RBI and must adhere to its regulatory framework, which includes guidelines on pricing of credit and fair practices.
The RBI was established on April 1, 1935, under the Reserve Bank of India Act, 1934, following the recommendations of the Hilton Young Commission.
NBFC-MFIs must maintain a minimum Net Owned Fund (NOF) of Rs 5 crore to operate as a microfinance lender.
The RBI introduced the Master Direction on Regulatory Framework for Microfinance Loans in 2022 to standardize the definition of microfinance loans across all regulated entities.
A microfinance loan is defined as a collateral-free loan given to a household having an annual income up to Rs 3 lakh.
NABARD provides refinancing support to rural financial institutions but does not hold regulatory oversight over NBFCs.
SEBI is the regulator for the securities market in India, not for lending institutions.
SIDBI provides funding to MFIs but does not function as the primary regulatory authority for their licensing or operational conduct.
The regulation of MFIs was tightened by RBI to prevent over-indebtedness among vulnerable households.
A is correct тАФ The Reserve Bank of India holds the mandate to regulate and supervise all Non-Banking Financial Companies, including those specialized in microfinance, to ensure financial stability and consumer protection.
When studying banking regulations, distinguish between the regulator (RBI) and development banks (NABARD/SIDBI); remember that RBI regulates the 'business of banking' while the others focus on 'credit flow and development'.
Get instant step-by-step AI explanations, full shift Previous Year Papers (SSC GD, RRB, SSC JE), and regional rank analysis on the official Examoogle App.
Free Download тАв 100K+ Aspirants