A new era for microfinance

Over the past few years, some banks have been fishing in the same pond, exploiting the regulatory loopholes. That's lazy banking. Now, all lenders will look for new pastures

India’s microfinance industry has grown 10 per cent to Rs 2.54 trillion in the March quarter over December quarter. The year-on-year growth has been 8.4 per cent. This is good news. The better news is that the Reserve Bank of India (RBI) proposes to radically change the regulations for the industry.
 
Following the Andhra Pradesh law in October 2010, which was put in place to curb the alleged excesses by the industry, the RBI set the stage for the entry of a new genre of financial intermediaries — the non-banking financial companies in the business of giving micro loans,