The Andhra Pradesh government is planning to submit a report to the Union finance ministry, outlining its concerns on the draft Micro Financial Sector (Development and Regulation) Bill, 2011.
Department of rural development principal secretary Reddy Subramaniam said, ?There are two concerns for us. One is regarding its actual implementation. Considering the fact that MFIs operate in remote areas and during odd working hours, we need to get clarity on how the RBI (Reserve Bank of India) is going to monitor the sector. Secondly, we have to check the constitutional validity of certain sections in the draft Bill. For instance, any institution dealing with money-lending activities comes under the purview of the State Money Lending Act. What the draft Bill proposes is contrary to the provisions of Articles 249 and 259, under which states regulate all money-lending activities,? he said.
?We are expecting a lot of clarity on the MFI Bill as we do not want to face exploitation, coercion or higher interest rates as posed by the MFIs. Though the RBI is the monitoring authority, we do not want any past instances to reoccur,? Reddy said, adding it would take another two to three days to study the Bill completely.