What changed
RBI directed select All-India Financial Institutions (Exim Bank, NABARD, NHB, SIDBI) to apply the January 19, 2011 circular on credit support to MFIs mutatis mutandis. However, provisions related to activities not typically undertaken by these FIs—like working capital, overdrafts, and personal loans—are excluded from applicability.
What it means for you
AIFIs must now follow the same restructuring norms for MFI advances as commercial banks, ensuring uniform treatment across lenders. This aligns regulatory expectations for credit support to the microfinance sector, though AIFIs are exempt from rules covering products they don't offer.
What you must do
- Review the enclosed circular DBOD.BP.BC.No.74/21.04.132/2010-11 and adopt its provisions for MFI advances.
- Identify and exclude inapplicable provisions related to working capital, overdrafts, and personal loans from your implementation.
- Update internal policies and training materials to reflect the new restructuring guidelines for MFI exposures.
Who it affects
Exim Bank, NABARD, NHB, SIDBI, All-India Financial Institutions handling MFI advances
Which AIFIs are covered by this circular?
The circular applies to Exim Bank, NABARD, NHB, and SIDBI, as specified in the address list.
Are all provisions of the commercial bank circular applicable to AIFIs?
No. Provisions related to activities not generally undertaken by FIs—such as working capital, overdrafts, and personal loans—are not applicable.
What is the effective date of these guidelines?
The circular is dated January 25, 2011, and applies the guidelines from the referenced January 19, 2011 circular to AIFIs.