The Reserve Bank of India has issued FAQ on Regulatory Framework for Microfinance Loans. Following clarifications are made regarding Micro Finance Loans:
- There is no requirement of keeping any deposit/ margin/ collateral/ primary security with the lender at any stage of the microfinance loan.
- Lender is required to provide a loan card to the borrower in a language understood by the borrower which should have following information: Information which adequately identifies the borrower, Simplified factsheet on pricing, All other terms and conditions attached to the loan, Acknowledgements by the lender of all repayments including instalments received and the final discharge, and Details of the grievance redress system, including the name and contact number of the nodal officer of the lender.
- Purchase of any non-credit products is purely voluntary. Fee structure for such products shall be explicitly communicated in the loan card.
- Training provided by the lenders is free of cost.
