Saturday, August 13, 2011

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.

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