As per the guidelines issued by the Reserve Bank of India in June 2021, each NBFC-MFI is required to maintain not less than ______ of its net assets as 'qualifying assets.

The correct answer is 85%.

Key Points

• NBFC MFI is a non-deposit-taking NBFC( other than a company certified u/ s 25 of the Indian Companies Act, 1956) that meets the ensuing conditions.
• Minimal Net possessed finances( NOF) of Rs. 5 crores. ( For those registered in the North Eastern Region of the country, Rs. 2 crores is needed as minimal NOF).
• At least 85 of its Total Net means are in the nature of Qualifying means.
• An NBFC, not qualifying as an NBFC MFI, isn't to extend loans to the micro-finance sector, which, in total, is further than 10 of its total means.

Important Points

• About NBFC MFI:
  • Microfinance institutions or MFIs are financial institutions that give loans and other financial services to poorer sections of society.
  • Generally, their area of operation for extending small loans are pastoral areas and among low-income people in civic areas.
  • Some of the MFIs, that qualify certain criteria and are non-deposit-taking realities, come under RBI bodies for NBFC Regulation and supervision.
  • These “ Last Mile Financiers ” are known as NBFC MFI or Non-Banking Financial Company- Microfinance Institutions.
  • The idea of covering them under RBI was to make these NBFC MFIs healthy and responsible.
  • They've to get NBFC License with RBI and fulfil the conditions as laid down for them.