Which regulatory body oversees microfinance institutions in India?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. Reserve Bank of India.
In India, microfinance institutions (MFIs) are regulated by the Reserve Bank of India (RBI). The RBI provides guidelines and regulations to ensure that MFIs operate in a transparent, fair, and sustainable manner, safeguarding the interests of borrowers and maintaining financial stability. These regulations include aspects like interest rate caps, loan disbursement practices, and borrower protection norms. The RBI's oversight ensures that microfinance services reach the intended low-income segments without leading to over-indebtedness or unethical practices.