<h1>RBI Eases Rules for Microfinance NBFCs: Removes Loan Cap, Adjusts Asset Criteria, Caps Interest Rates Based on Costs.</h1> The Reserve Bank of India (RBI) has relaxed certain norms for Non-Banking Financial Companies (NBFCs) involved in microfinance by modifying its criteria for qualifying assets to include only those originated after January 1, 2012. The cap on loans has been removed to provide operational flexibility, with interest rates capped based on borrowing costs. These changes address challenges faced by NBFCs due to previous regulations and the Andhra Pradesh Micro Finance Institutions Ordinance, which led to increased non-performing assets and financial losses. Consequently, gross NPAs rose significantly, and net profits declined, resulting in substantial losses for NBFCs in recent years.