2022 · Q7
Which one of the following statements about a borrower from a Microfinance Company is not SOLVED papEr : 2022 (II) correct?
General KnowledgeIndian Economy
- AThe borrower should not have annual income beyond a limit.
- BThe borrower should not seek loan amount beyond a limit.
- CThe borrower should not refuse to offer a collateral.
- DThe borrower should not refuse to pay any rate of interest offered.
Explanation
Under the RBI's 2022 regulatory framework for microfinance, all microfinance loans must be collateral-free, so a borrower can legitimately refuse to offer collateral. The framework does prescribe income and loan-amount eligibility limits for borrowers. It also requires regulated entities to follow a board-approved policy on pricing of loans rather than charging arbitrary rates. Hence the statement that the borrower must offer collateral is the incorrect one.