RBI Deputy Governor to MFIs: Balance borrowers’ interest

Reserve Bank of India deputy governor Rajeshwar Rao warned microfinance lenders against irresponsible lending and asked them to grow business while balancing the interest of vulnerable borrowers.

He said customer protection lies at the RBI’s regulation for the microfinance sector and the regulator has zero tolerance for misconduct towards the borrowers.

Speaking at an event, the deputy governor said that exclusive focus on business growth and bottom lines without considering the vulnerabilities of the borrowers by any entity is fraught with pitfalls and irresponsible lending by a few lenders ends up putting the interests of the entire industry at risk.