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RBI hikes average base rate charged by NBFC-MFIs to 7.98%

RBI hikes average base rate charged by NBFC-MFIs to 7.98%

RBI, on the last working day of every quarter, advises average of base rates of five largest commercial banks to arrive at interest rates to be charged by NBFC-MFIs

The average base rate has been increased from 7.81 to 7.98 per cent The average base rate has been increased from 7.81 to 7.98 per cent

The Reserve Bank of India (RBI) has increased the applicable average base rate to be charged by non-banking financial companies -- microfinance institutions (NBFC-MFIs) to their borrowers for the quarter beginning July 1. The average base rate has been increased from 7.81 to 7.98 per cent.

The Reserve Bank, in its circular dated February 7, 2014, had directed the NBFC-MFIs regarding the pricing of credit, under which it will, on the last working day of every quarter, advise the average of the base rates of the five largest commercial banks to arrive at the interest rates to be charged by NBFC-MFIs to their borrowers in the ensuing quarter.

Besides, the central bank has also imposed penalties on four co-operative banks, including a Rs 1.12 crore fine on Hyderabad-based Andhra Pradesh Mahesh Co-operative Urban Bank, for contravention of certain regulatory directions. A penalty of Rs 62.50 lakh has been imposed on The Ahmedabad Mercantile Co-operative Bank, Ahmedabad; Rs 37.50 lakh on SVC Co-operative Bank, Mumbai; and Rs 25 lakh on Saraswat Cooperative Bank, Mumbai.

Also read: RBI imposes penalties on four cooperative banks for non-compliance

The penalty on Andhra Pradesh Mahesh Co-operative Urban Bank was for non-compliance with directions issued by RBI contained in Master Directions on 'Interest Rate on Deposits' and 'Know Your Customer'. The Ahmedabad Mercantile Co-operative Bank has been penalised for violation of norms contained in Master Directions on 'Interest Rate on Deposits'.

As per the RBI, it imposed a penalty on SVC Co-operative Bank for non-compliance with directions on 'Interest Rate on Deposits' and 'Frauds Monitoring and Reporting Mechanism'. Saraswat Cooperative Bank was penalised for non-compliance with directions on 'Interest Rate on Deposits' and 'Maintenance of Deposit Accounts'.

Also read: Credit growth to industrial sector remained negative during FY21 due to COVID-19 crisis: RBI