<h1>RBI Committee Recommends New NBFC Category for Microfinance Regulation, Proposes Interest Caps and Borrower Group Limits.</h1> The Reserve Bank of India (RBI) formed a Sub-Committee under a member of its Central Board, which submitted a report addressing issues in the microfinance sector, particularly in Andhra Pradesh. Key recommendations include establishing a new category of Non-Banking Financial Companies (NBFCs) specifically for microfinance institutions (MFIs) to be regulated by the RBI. The report suggests a margin cap of 10-12% based on loan portfolio size, a 24% interest cap on individual loans, and limits on charges to processing fees, interest, and insurance. Additionally, borrowers should only belong to one Self-Help Group or Joint Liability Group.