The Reserve Bank today allowed NBFC-micro finance institutions to act as channelising agents for distribution of concessional loans under special schemes of government agencies.
RBI said that various government agencies, that provide loans to targeted socio-economic sections of the population, had approached it to allow them to use Non-Banking Financial Company-Micro Finance Institutions (NBFC-MFIs) to channelise such loans.
Since these loans are provided at concessional interest rates, RBI said it has been requested to exempt such loans from the regulation regarding maximum permissible variance in the interest rates.
One of the eligibility criteria for loans granted by NBFC-MFIs to be treated as 'Qualifying Assets' is that the variance between the maximum and the minimum interest rates charged should not exceed four per cent.
With a view to facilitate the use of NBFC-MFI network to distribute such targeted loans, RBI made certain changes in the norms.
Now loans disbursed or managed by NBFC-MFIs in their capacity as channelising agents for central/state government agencies will be considered as a separate business segment, RBI said in a notification today.
"In the circumstances, the NBFC-MFIs are hereby granted general permission to act as channelising agents for distribution of loans under special schemes of Central/State Government Agencies (subject to certain conditions)," it said.
One of the condition is that all such loans will be reported to credit information companies (CICs) to prevent multiple borrowings and present complete picture of indebtedness of a borrower.
