The new financial year has brought a lot of good news for those who have taken loans from Non Banking Financial Institutions (NBFCs) or Micro Finance Institutions (MFIs). Such customers will have to pay less interest from the first quarter of 2021-22. It will also benefit new customers and old customers who have taken out a loan at a floating rate, such as a home loan.
The Reserve Bank of India has announced a new average base rate. This is the average base rate of the 5 largest commercial banks in the country. The average base rate of these banks has declined by 0.15 per cent for the quarter ended March 31, 2021. Earlier, the rate was 7.81 per cent. The average base rate has dropped to about 1.40 percent in the last two years. Which was 9.21 per cent as on June 30, 2019.
The Reserve Bank releases these figures at the end of each quarter. Which acts as a benchmark rate for NBFCs and MFIs. Interest rates are generally higher for NBFCs and MFIs. Due to which the Reserve Bank has made this special arrangement. The RBI announces the average base rate of 5 large commercial banks, which is the benchmark rate for NBFCs and MFIs.
VR Sunil Gohil
