The Microfinance Institutions (Development and Regulation) Bill 2012 introduced today comes with modifications to the earlier Bill introduced in March 2007.
On account of the dissolution of the Lok Sabha, the Micro Financial Sector (Development and Regulation) Bill 2007 had lapsed.
The latest Bill provides for the constitution of the micro-finance development council to advise the Central Government on formulation of policies, schemes and other measures required to be taken in the interest of orderly growth and development of micro-finance institutions. State Micro Finance Council
It also provides for the establishment of State Micro Finance Council in each state or for two or more states, considering the extent of micro-finance activities in such states.
This council would have to report to the Central Government on the implementation of the measures undertaken for the promotion and development of micro-finance institutions. Benchmarks, performance standards
The Bill introduced today also seeks to empower the RBI to specify sector related benchmarks and performance standards pertaining to methods of operation, fair and reasonable methods of recovery of loan advanced by MFIs.
The RBI is also proposed to be empowered to set up a micro-finance development fund to be applied for providing loans, grants or seed capital as also for training of personnel engaged in micro-finance institution services.
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