DRAFT MICROFINANCE BILL GIVES RBI TOTAL CONTROL

Reserve Bank of India (RBI) will regulate the Micro Finance sector:

• Every entity , except bank, engaged in Micro Finance to register with RBI.
• RBI may specify margin requirements and other norms for MFIs.
• State advisory councils proposed to give states a say in policy making.
• Systematically important MFIs to register as companies under Companies Act 1956.
• MFIs will need to create a reserve fund out of its net profit.
• All M&As in the MFI sector will have to be approved by the RBI.