At the end of day-long deliberations, they asked National Bank for Agriculture and Rural Development (Nabard) to set up a high-powered task force which should submit its report within a timeframe of three months.

It asked the Association of Community Development Finance Institutions (ACDFI), also called `Sa-Dhan', to prepare the terms of references (ToR) for the task force for framing a detailed consultative policy, including a comprehensive legislation, for the micro-finance sector.

With the consent of others present, Jalan approved almost all the suggestions, barring some minor changes made by Sa-Dhan in the `draft consensus report' (published in The Financial Express on Friday).

The day's high-level meeting was also convened by Sa-Dhan in collaboration with Women'sWorld Banking (WWB) and its Indian affiliate called Friends of WWB (FWWB). Sa-Dhan was promoted by Women's World Banking (WWB) during a workshop held in New Delhi on August 1 and 2. In the words of outgoing chairperson of WWB, Elaben Bhatt, the meeting should go down in the annals of micro-finance banking as the Ahmedabad conclave. Both the bankers and government officers fully shared the anxiety of non-government organisations (NGOs) to reach out to 60 million poor in the villages and 15 million in towns in the country.

The meeting suggested a three-pronged approach with mutually complementary strategies. First, to give incentive to FIs -- banks, RRBs, UCBs -- to expand their micro-finance portfolio, by establishing a supportive policy and institutional environment. Second, to encourage specialised micro-finance institutions (MFIs) like FWWB to expand their services with supportive regulatory and financial linkages. And, third, to establish a range of community development financial institutions (CDFIs).It was also decided that the new capacity building was required at all the three levels, encouraging FIs would serve as the wholesalers for MFIs.

As per RBI estimates. the current annual credit usage by Indian low-income households is estimated to be Rs 50,000 crore ($12 billion) -- at an average of Rs 6,000 by 60 miilion rural poor households totalling Rs 36,000 crore and at an average of Rs 9,000 by 15 million urban poor totalling Rs 13,000 crore.

It was also decided that the comprehensive policy should look after their needs for credit as well as savings and insurance. The other suggestions included setting up a separate self-regulatory organisation (SRO), looking to such a large number of MFIs. Bankers who attended the meeting included GP Gupta (IDBI), YC Nanda (Nabard), Satish Mehta (HDFC), MS Verma (SBI), MG Bhide (Bank of India), Rashid Jilani (Punjab National Bank), TJA Gangia (Andhra Bank) and Dalbir Singh (Oriental Bank of Commerce).

Policy makers and regulators included secretary (finance) CMVasudev, advisor to finance minister Mohan Guruswamy and director (banking division) Alok Kumar. Besides president of WWD Nancy Barry and others, NGOs were represented by among others, Vijayalkshmi Das (FWWB), Al Fernandez (MYRADA), Achintya Ghosh (PRADAN), Narendra Kande (Dhan), M Udaia Kumar (Share), Vijay Mahajan (Basix) and Sudha Prakash (Awake).