The Reserve Bank of India (RBI), on Thursday, fixed the average base rate for NBFC-MFIs to be charged from their borrowers from 7.98% for the September 2021 quarter to 7.95% for the quarter beginning October 1, 2021.
“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%,” the RBI said in a release.
The central bank advises the average of the base rates of the five largest commercial banks on the last working day of every quarter.
This is done in order to finalise the interest rates to be charged by NBFC-MFIs from their borrowers in the ensuing quarter.
The RBI, in its circular dated February 7, 2014, said the interest rates charged by an NBFC-MFI will be the lower of the cost of funds in addition to the margin or the average base rate of the five largest commercial banks by assets multiplied by 2.75.