The Reserve Bank of India has issued a notification saying that MFIs and banks were not meeting the rural impact guidelines that have been part of banking regulation in India. The notification mentions three areas of concern. First, that MFIs which are financed by banks or acting as their intermediaries seem to be focusing on relatively better banked areas and competing for the same set of poor customers resulting in multiple lending practices. Second, Empowerment of self-help groups through development of their capacity to increase their incomes is being ignored. Third, the banks that are the principal financiers of these MFIs have not improved their processes and reporting for better transparency and control.
Continue reading “Reserve Bank of India Cautions Microfinance Institutions and Banks”
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