Reserve Bank has increased the household income limits for borrowers of Non-Banking Financial Companies (NBFCs) and microfinance institutions (MFIs) from 1 lakh to 1.25 lakh rupees. The move is aimed at strengthening credit to those at the bottom of the economic pyramid in rural areas. Similarly, the limit has been increased from 1.6 lakh for urban or semi-urban areas to 2 lakh rupees.

RBI said in a circular that the limit has been increased after taking into consideration the important role played by microfinance institutions in delivering credit to those at the bottom of the economic pyramid and to enable them to play their assigned role in a growing economy.