framing these guidelines was built around the idea of customer protection. to achieve, the framework has incorporated five core principles, namely addressing regulatory arbitrage with the introduction of a lender agnostic and activity - based regulation so that all the regulated entities engaged in microfinance pursue the goal of customer protection within a well - calibrated and harmonized set - up. protection of microfinance borrowers from over - indebtedness caused by granting of loans beyond the repayment capacity of the borrowers which, then, can potentially get manifested into coercive recovery practices. enabling the competitive forces to bring down the interest rates by way of enhanced transparency measures. enhancement of customer protection measures by way of strengthening them and extending them to all regulated entities. facilitating flexibility to design products / services to meet the needs of microfinance borrower in a comprehensive manner. this framework has been finalized after extensive internal deliberations, issuance of a consultative document and after taking into consideration the feedback received. i would like to take this opportunity to delve deeper into the thought process behind the revised regulations and spell out the regulatory intent. household income and repayment criteria earlier, a microfinance borrower of an nbfc - mfi was identified by the annual household income of maximum 1. 25 lakh for rural and 2 lakh for urban and semi - urban areas and the limit of 1. 25 lakh on loan amount was prescribed for the individual borrower. to meet the growing needs of existing borrowers of mfis and changing demographics, threshold on household income has been harmonized between rural and urban households to a uniform household income limit of 3 lakh. while increasing the eligible loan amount, the new framework also envisages a situation where a household who is in lower band of the household income limit is provided loans consistent with their repayment capacity. the emphasis now is on the repayment capacity of the borrowers rather than considering only indebtedness per se or indebtedness from only nbfc - mfis in isolation. therefore, a common definition of microfinance loans has been prescribed for all regulated entities and maximum loan amount has been linked to household income. there have been some demands for further increasing the household income limit. 3 / 7 bis - central bankers'speeches while for now it seems adequate given the profile and needs of microfinance borrowers, one needs to be cognizant of the fact that other channels are always

end was undertaking switches / buybacks from proximate maturities in order to reduce the redemption concentration and create space for further issuances that may be needed to meet the demand of market participants. during the past three fiscal years, switches amounting to about rupees one trillion were undertaken by the reserve bank in consultation with the government. the operations have eased gross borrowing numbers and enabled effective borrowings. 24. the aim of the reserve bank has always been to conduct market borrowing operations in a smooth manner without undue disruptions. the strategic and tactical approaches of debt management are meant to ensure the same. while the strategic parameters are set in mtds and anchored to achieving the main objectives, the tactics are not only linked to the objectives but also to ensuring stability of operations. a recent example would bring out this approach. the market participants were expressing apprehensions about the potential elevated supply of government bonds due to the issuances by the state governments under ujwal discom assurance yojana ( uday ). 25. the yields had hardened in anticipation, especially for state government borrowings. we have acted in a calibrated manner planning issuances to banks that have discom dues directly so that the supply will not enter the market. selective regulatory forbearance of categorizing the bonds as ‘ htm ’ was accorded to subscribing banks. the bonds issued to pay dues to the central public sector undertakings were offered through private placements. the pressure on the yields also moderated by modulating the issuance strategy to limit issuances at long tenors announcing the same in the borrowing calendar for first half of the fiscal 2016 – 17. this was possible because we had over time elongated the maturity profile of the government bonds ; weighted average maturity of 10. 50 years as on end - march 2016 is one of the highest among the peers. this flattened the yield curve bringing down yields at 15 years and above, thereby increasing attractiveness of the state bonds issued under uday. 26. the timing of issuances was planned keeping in view absence of supply at end of fiscal year. the issuances were successful and uday bonds of about ₹ 990 billion were successfully placed. the fixed income and money market dealers association ( fimmda ) played an important role here in co - ordinating with banks for smooth issuances. the market behavior in this case, however, bears scrutiny. the markets exhibited serious