CURRENT AFFAIRS

Detailed explanation-1: -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 October 1, 2021 will be 7.95 per cent.

Detailed explanation-2: -The maximum limit on microfinance loans for such NBFCs (NBFCs other than NBFC-MFIs) now stands revised at 25 percent of the total assets. In December 2021, RBI had fixed the applicable average base rate to be charged by NBFC-MFIs to their borrowers for the quarter beginning January 1, 2022, at 7.89 percent.

Detailed explanation-3: -The minimum requirement of microfinance loans for NBFC-MFIs also stands revised to 75 per cent of the total assets. 8.2 Under the earlier guidelines, an NBFC that does not qualify as an NBFC-MFI, cannot extend microfinance loans exceeding 10 per cent of its total assets.

Detailed explanation-4: -Base rate is defined as the minimum interest rate set by the RBI below which Indian banks are not permitted to lend to their customers. Unless there is a government mandate, the RBI rule specifies that no bank may offer loans at an interest rate lower than the base rate.

Detailed explanation-5: -Detailed Solution. The correct answer is The official rate of interest charged by the Central Bank of the country. A bank rate is the interest rate at which a nation’s RBI lends money to domestic banks, often in the form of very short-term loans.