The Reserve Bank of India (RBI) has formed a sub-committee to look into the functioning of microfinance institutions (MFIs) and what bearing they have on its policy to take further action.
“We have discussed the evolving situation of the MFI sector and as part of our responsibility, we are also looking at what is happening in the financial sector,” RBI Governor Duvvuri Subbarao said. He was speaking to reporters here after a meeting of the central bank board. However, he did not commit on regulations to deal with MFIs. “I cannot really speculate on regulations.”
According to him, a vast number of MFIs don’t come under the purview of RBI and the apex bank does not have an MFI category of non-banking financial intermediaries. As a part of priority sector lending, MFIs mobilise funds under the realm of organised lending. According to him, MFIs are alternatives to private moneylenders in the unorgansied sector and the apex bank is marshalling this.
