The Presidents / Chief Executive Officers

All Microfinance Banks

Dear Sir,

PRUDENTIAL REGULATIONS FOR MICROFINANCE BANKS – REVIEW OF

INSTRUCTIONS RELATING TO GENERAL PROVISION REQUIREMENTS

Please refer to Prudential Regulation No. 12 for Microfinance Banks as amended from time to time.

2. It has been decided to withdraw the general provision requirements wherein loans have been secured against gold or other cash collateral with appropriate margin. Further, in case of all other loans, Microfinance Banks shall henceforth maintain general provision of 1% instead of the existing requirement of 1.5%.
3. All other instructions on the subject shall remain unchanged.

Please acknowledge receipt.