Prime Minister's Economic Advisory Council Chairman C Rangarajan has asked the micro finance institutions operating in the country to maintain a certain level regarding the repaying capacity of the borrower.

"It is necessary to ensure that burden on the borrower is not such as to make him default. It is necessary for micro finance institutions to keep the overall cost to borrowers maintained at a level that is consistent with their repaying capacity", Rangarajan said.

He also said that microfinance institutions need to make sure that they separate 'pure interest' costs from all other costs rendered for the borrower.