This average charge is because the RBI has asked all these non-banking finance institutions to set a minimum base rate of 9.18%.
People planning to borrow money from Non-Banking Finance Corporation and microfinance institutions (MFIs) must note that they will have to pay at least 9.18% interest rate, beginning July 1, 2019.
This average charge is because the RBI has asked all these non-banking finance institutions to set a minimum base rate of 9.18%.
"The applicable average base to be charged by non-banking financial companies and microfinance institutions to their borrowers for the third quarter beginning from July 1 will be 9.18%."
The RBI decides the average base for NBFCs-MFIs on the basis of the average base rate of the five largest commercial banks.
RBI Governor cautioned against cherry-picking data
After former Chief Economic Advisor Arvind Subramanian's statement that GDP figures between 2011-12 and 2016-17 were overestimated, RBI Governor cautioned against cherry-picking of data while delivering a speech on the occasion of Annual Day Statistics.
He said that every statistician and experts who analyse GDP data need to accept uncertainty, be thoughtful, open and modest.
He said that "In recent times, there have been animated discussions on the precision of statistical methods. The doctrine —even tradition — of statistical significance in scientific research has come under some cloud for its veracity and the journal American Statistician published a special edition on this issue earlier this year."
"Critics allege that these tests are susceptible to manipulation in order to make desired results significant, and undesired results non-significant."
"Further, some important results may be discarded at the conception level itself just because they are highly unlikely. Similarly, an opportunity to cherrypick variables is available. In other words, correlations can conveniently be extended to establish spurious causality," RBI Governor said.
"In this context, do’s and don’t’s have been cited — ‘don’t say statistically significant’ is one of them. Yet, as the global financial crisis demonstrated, tail risks materialised and the world was not the same again. These lessons inform our modelling of corporate financial risks on an ongoing basis. As the American Statistician recommends, “accept uncertainty. Be thoughtful, open, and modest, in short, ATOM.”
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