A new microfinance bill that was recently introduced in the Indian Parliament would remove the cap on microloan interest rates. Although there would be no cap on interest rates, the regulatory body would “advise” microfinance institutions to keep rates low and would “closely monitor” them, according to government officials.

“The act will leave the self-help groups and other community-owned and managed MFIs out of its regulatory reach,” said a Reserve Bank of India official.

By Jay Kumar, Research Assistant

Additional Resources:
1.) Source Article: http: //economictimes.indiatimes.com/news/economy/policy/New-micro-finance-bill-does-away-with-lending-rate-cap/articleshow/5537002.cms
2.) MICROCAPITAL BRIEF: Indian Government Plans to Reintroduce Microfinance Bill Which Will Designate National Bank of Agriculture and Rural Development (NABARD) as New Regulatory Body, Allow Microfinance Institutions (MFI) to Accept Deposits : http://www.microcapital.org/microcapital-brief-indian-government-plans-t…