RBI Releases Consultative Document on Regulation of Microfinance
On 14th June, 2021, Reserve Bank of India released a Consultative Document on Regulation of Microfinance sector.
Aim
- To address the concerns related to the over-indebtedness of microfinance borrowers and empowering them.
- Harmonising the regulatory frameworks for various regulated lenders in the microfinance space.
Need
- Ineffective Rules and Regulations: At present, Microfinance Institutions are governed by NBFC-Micro Finance Institutions (Reserve Bank) Directions, 2011. So the new document is much needed to govern the growth and misuse of Microfinance Sectors.
- Increased Share of Banks and Small Finance Banks: After 2015 the banks and small finance banks started increasing their operations in Microfinance Sector. ....
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