Financial Inclusion Conference - Sa-Dhan

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BREAKAWAYSESSION - 3F i n a n c i a l I n c l u s i o n C o n f e r e n c e - 2 0 1 2“The First Mile Walk into the Financial System”• SBI will soon release instructions to even provide cash-credit to NGO-MFIslending to SHGs• BCs can now open SHG accounts, which was not allowed earlier• Link branch officer will go every week to each BC outlet for better coordination36
F i n a n c i a l I n c l u s i o n C o n f e r e n c e - 2 0 1 2“The First Mile Walk into the Financial System”Session-7Microfinance Regulation:The Emerging LandscapeSESSION - 7HIGHLIGHTS• The proposed microfinance act seeks to make RBI the regulator of all forms ofmicrofinance organizations• The process being followed for legislating the act ensures that all stakeholders havethe opportunity to present their point of view• There is a consensus among key stakeholders including the regulators that financialinclusion is a priority area and a regulatory architecture is indeed required from themicrofinance sector.PANEL OF SPEAKERS:• Ms Mythili Bhusnurmath, Consulting Editor, Economic Times-Moderator• Mr Anurag Jain, Joint Secretary, Department of Financial Services, Ministry ofFinance• Mr M R Umarji, Chief Adviser (Legal), Indian Banks' Association• Mr Vijay Mahajan, Chairman, BASIX• Mrs Archana Mangalagiri, General Manager, DNBS, Reserve Bank of IndiaMr M R Umarji, explained the basis of the Parliament enacting the MicrofinanceAct. He informed that the new microfinance bill is with the Parliamentary StandingCommittee on Finance, which has invited comments on it. After having reviewedthe comments, the committee will make its own recommendations to thegovernment. The new bill requires that all microfinance institutions need to beregistered with the RBI. He explained that the bill refers to MFIs as entitiesproviding credit, thrift and other microfinance services – services, whichmoneylenders do not provide. This makes MFIs distinct and forms the basis for theCentral Act and Parliament taking a decision to regulate MFIs. He further addedthat all recommendations of the Malegam committee have been duly incorporatedin the bill. The bill also proposes district level and state level advisory committees.The district level committee will monitor the practices of the MFIs and address theconcerns of the state governments.Ms Mythili Bhusnurmath, hoped that the bill is enacted soon, with proper checksand balances. She informed that in the past the RBI had been disinclined inregulating MFIs, given the constraints in its bandwidth. Inviting Mrs ArchanaMangalagiri, to the discussion Ms Bhusnurmath, asked her to comment on RBI’sapproach towards regulating MFIs.Ms Mangalgiri, detailed out the basis of the guidelines issued by the RBI on37
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Financial Inclusion Conference - Sa-Dhan

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