Economics • Banking & FinanceMedium
Which institution acts as the regulator of Micro Finance Institutions (MFIs) that are registered as Non-Banking Financial Companies (NBFCs) in India?
A. NABARD
B. SIDBI
C. Reserve Bank of India✓ Correct Answer
D. Ministry of Corporate Affairs
💡 Solution & Explanation
The Reserve Bank of India serves as the sole regulator for microfinance institutions structured as Non-Banking Financial Companies, issuing specific directions on interest caps and fair practices. Institutions such as NABARD and SIDBI provide developmental and refinance support but do not hold the core regulatory licensing authority over these NBFCs.
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