The Reserve Bank has said the average base rate that's charged by NBFC-MFIs from borrowers for the next quarter will be 7.81 per cent. The RBI advises NBFC-MFIs on the average of the base rates of the five largest commercial banks on the last working day of every quarter.
"The Reserve Bank of India has today communicated that the applicable average base rate to be charged by Non-Banking Financial Company - Micro Finance Institutions (NBFC-MFIs) to their borrowers for the quarter beginning April 1, 2021, will be 7.81 per cent," the central bank said in a statement.
The RBI has increased its scrutiny over NBFCs in the last two years. Recent developments of the failure of NBFCs and growing need to keep them resilient by reining them in, improving their governance standards and also fool-proofing their risk management have prompted the RBI to come up with measures to give them sufficient flexibility to operate and grow.
The RBI, in its discussion paper released in January, proposed tighter norms for large NBFCs and the creation of a multilayer structure to categorise the industry players. It also sets out a slew of policy measures to conserve capital among banks and NBFCs through regulatory initiatives.
As part of this, large NBFCs and urban cooperative banks(UCBs) will have to submit a risk-based internal audit and harmonised guidelines for appointing statutory auditors for commercial banks, UCBs and NBFCs to improve the quality of financial reporting.