Overview

• The RBI is examining whether to frame guidelines to address mis-selling of insurance and other financial products by regulated entities
• Portfolio at risk for microfinance loans jumped 163% to Rs43,075 crore in the fiscal year ended March 2025
• Gross loan portfolio declined 13.9% year-on-year to Rs381,200 crore as lenders confront rising delinquencies
• Rao flagged excessive margins by some lenders with access to low-cost funds and harsh recovery practices that have deepened borrower distress
• He urged lenders to enhance credit appraisals, eschew coercive tactics and adopt an empathetic, developmental approach