FM: Integrate microfinance firms with financial system
“We are hopeful that the Bill will be cleared by the Standing Committee, then brought to Parliament for passage. Once the Bill is passed, I hope that it will provide an adequate legislative framework for the entire gamut of micro-finance services,” Chidambaram said at the Microfinance India Summit 2012.
Drafted in the wake of problems faced by borrowers in Andhra Pradesh and other states, the Micro Finance Institutions (Development and Regulation) Bill, 2012, seeks to empower the Reserve Bank of India to regulate MFIs and fix interest ceiling on loans.
Chidambaram said that the financial inclusion architecture would remain incomplete unless MFIs are integrated with the financial services delivery system.
“Responsible financing by way of transparency, interest rate rationalisation, respectful recovery procedure must be followed by MFIs,” Chidambaram said.