Microfinance was enhanced by monetary policy.

By releasing a circular, the National Bank raised the maximum amount that must be maintained in the customer protection fund. They argue that despite the fact that this approach will result in a slight decline in microfinance returns, it is still necessary. The monetary policy has brought to a very good policy for microfinance reforms, according to Prakashraj Sharma, President of NIC Asia Microfinance. According to him, the monetary policy initiative is in the best interests of the company and its clients. He stated, "It's excellent that the insolvent borrowers have received restructuring, rescheduling, and other facilities." The monetary policy has supported mergers; nonetheless, it would have been simpler if the capital had likewise been fixed.

Vasant Lamsal, the CEO of Vijay Microfinance, stated that microfinance will ultimately profit from the National Bank's increased allocation for safeguarding consumers' interests through monetary policy. He thinks that doing this will contribute to a greater public trust in microfinance. "There is no need to worry about the contraction in returns at this time," he stated. For the advantage of the client, it was essential. According to him, there is a defined policy that calls for improving the financial status, microfinance health, and consumer welfare.

Another microfinance employee, Min Bohra, claims that similar reform measures were taken by the monetary policy, which followed the on-the-ground investigation carried out following the anti-microfinance protests. The Nerude Mirmire microfinance banking institution's deputy CEO, Bohra, stated, "This policy has accepted everyone's priority to improve microfinance because it is the blood circulation in rural areas." According to him, allocating money for the benefit of the clients won't have an impact on profits and will instead boost public trust in microfinance.

The circular states that going forward, the customer protection fund shall get three percent of microfinance profits. The National Bank has doubled the amount that needs to be set aside, so far it is just 1%. It is not necessary to contribute three percent to such a fund starting this year. It is instructed that Rashtra Bank set away 1.5 percent of the profit for the 2081–2082 year, 2 percent by June 2083, and 3 percent by June 2084. If a proposed yearly dividend (cash or bonus) above fifteen percent is made, thirty-five percent of the proposed dividend over fifteen percent must also be retained in this fund.

A portion of the money made by microfinance firms ought to go toward helping their clients. For the same reason, thirty-five percent of the proposed dividend exceeding fifteen percent must be put in a distinct consumer protection fund if these institutions wish to provide one percent of profit (which will now be three percent) and more than fifteen percent of dividends.

Microfinance institutions should only use the funds accumulated in the aforementioned fund for initiatives that would benefit the community as a whole, such as safeguarding and restoring the creditworthiness of troubled borrowers, enhancing customer education and capacity, educating children up to the elementary school level, and promoting health and nutrition. The money from microfinance institutions that offer wholesale loans can also be used for initiatives aimed at raising the client institutions' members' level of financial literacy. The organization's yearly report must to include a clear disclosure of the precise amount spent in this manner.

In a similar vein, the National Bank has set the 1.5 percent service charge that microfinance firms charge at 1.3 percent. Furthermore, microfinance institutions are prohibited by central bank regulations from deducting any amount from the approved loan amount, save it for savings, except from the stated service fee.

The National Bank of India has released a new circular stating that microfinance has made loans up to Rs. Additionally, the Central Bank has made it possible for families to obtain microloans through microfinance up to 3 lakh rupees per in order to construct affordable homes. According to arrangements made by the National Bank, a borrower may only receive loans from up to two microfinance companies. One borrower is protected by a single microfinance policy. The National Bank has made arrangements so that, while offering microloans in the form of unsecured collective guarantees or collateral security, no more than two microfinance financial institutions may lend money to a single borrower without going over the credit limit.

Under a Rashtra Bank policy, borrowers who have previously taken out loans from banks and financial institutions classified as "A," "B," or "C" are ineligible to apply for loans from microfinance financial institutions. The microfinance internal audit has been loosened by the National Bank. Internal audits can now be carried out on a regular basis by trained personnel. Additionally, internal audits of every branch will be conducted by microfinance at least once a year. Two years was the previous such time.

In a similar vein, microfinance organizations will have the ability to temporarily remove borrowers who have been placed on the blacklist. Even though the microfinance financial institution has added non-paying borrowers to the credit information center's blacklist, the borrower's loan may be removed from the blacklist for a period of six months if the institution believes the borrower will make an effort to repay the loan quickly. On the other hand, the loan will have to be recommended to the Center to be placed on the blacklist if it is not repaid within six months.