RBI BRINGS MFIs UNDER DIRECT CONTROL

The Reserve Bank of India (RBI) formally brought Micro Finance Institutions (MFI) under its direct regulation by classifying these as a new category of Non-Banking Financial Company (NBFC). The move follows the recommendations of the Malegam committee report of January and is expected to clear any ambiguity on who has responsibility for monitoring the sector. The guidelines say NBFC-MFIs will be non-deposit taking finance companies having minimum net owned funds of Rs5 crore, with not less than 85 per cent of net assets in the nature of 'qualifying assets'.