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      Question

      Which authority is responsible for framing guidelines

      and supervising the operations of Microfinance Institutions (MFIs) and NBFC-MFIs in India?
      A Securities and Exchange Board of India (SEBI) Correct Answer Incorrect Answer
      B National Bank for Agriculture and Rural Development (NABARD) Correct Answer Incorrect Answer
      C Small Industries Development Bank of India (SIDBI) Correct Answer Incorrect Answer
      D Reserve Bank of India (RBI) Correct Answer Incorrect Answer
      E State Governments Correct Answer Incorrect Answer

      Solution

      In India, Microfinance Institutions (MFIs) play a crucial role in extending small-ticket loans to low-income households and entrepreneurs who generally lack access to traditional banking services. • The Reserve Bank of India (RBI) is the primary regulator of MFIs and NBFC-MFIs. • RBI issues prudential norms, lending guidelines, and fair practices codes to ensure that MFIs operate transparently and that borrowers are protected from over-indebtedness. • Institutions such as NABARD and SIDBI play a supportive role in refinancing and promoting microfinance but do not regulate them.  Correct Answer: Reserve Bank of India (RBI)

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