RBI sets average base rate for NBFC-MFI to 7.98%

The Reserve Bank of India (RBI) has fixed the average base rate for NBFC-MFIs to be charged from their borrowers at 7.98 per cent for the quarter starting July 1, 2021. The rate has been increased from 7.81 per cent that was applicable in the April-June 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 July 1, 2021 will be 7.98 per cent," said an RBI statement. The central bank in its circular dated February 7, 2014, issued to NBFC-MFIs regarding pricing of credit, stated that on the last working day of every quarter, it will advise the average of the base rates of the five largest commercial banks for the purpose of arriving at the interest rates to be charged by NBFC-MFIs to their borrowers in the ensuing quarter.