RBI may allow all MFIs to raise upto $10Mn through ECBs to part fund their operations.
Currently only non-government organizations which function as microfinance institutions are allowed to raise up to $5 million. The new notification will cover all microfinance lenders.
The Microfinance industry, which has witnessed one of its toughest years on account of the crackdown by the Andhra Pradesh government, could see an improvement in its prospects as a host of new regulations bring stability to the market.
Last week, RBI issued new guidelines for NBFC-MFIs to have minimum net owned funds of R5Cr, up from R2Cr earlier and capital adequacy ratio (CAR) of 15%, up from 12% earlier. According the new rules, the MFIs which have a 25% exposure to Andhra Pradesh, must achieve 12% capital adequacy by April 2012.
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