Parliament clears MFI bill, RBI to regulate

Moneycontrol Bureau

The government of India on Thursday cleared the Microfinance Bill in Parliament. It has made the Reserve Bank of India as the regulator for all micro finance companies (MFIs). The Bill states that MFIs with minimum net-worth (capital + reserve) of Rs 5 lakh each have to be registered with the RBI. In line with banks, the regulator will direct them in fixing their interest rates, fees and premiums, CNBC TV18 reported from New Delhi. Moreover, the Bill proposes to set up a micro finance development council. The MFI issue actually started emerging from the state of Andhra Pradesh, the hub of MFIs in India. Following a series of suicides, the state government had imposed some stricter rule on them. Shares of SKS Micro Finance, the only listed entity among other companies, tumbled more than 70% in the last one year on regulatory concerns. Moreover, the company has just shifted its base from Andhra to Mumbai with a new management at its helm.