India: MFIN Welcomes RBI Move to Harmonise Regulations for Micro Finance Lenders
India, February, 05 2021 -
Microfinance Institutions Network (MFIN) on Friday welcomed the Reserve Bank's decision to come out with a consultative document to harmonise regulatory framework for micro financiers.
RBI Governor Shaktikanta Das on Friday said the central bank will come out with a consultative document, harmonising the regulatory frameworks applicable to various regulated lenders NBFC -- MFIs, banks, small finance banks (SFB) and NBFC -- investment and credit companies -- in the microfinance space.
The central bank will come out with the document in March this year.
"This is a very important move as it will augur well for the sector as a whole and further safeguard the interests of the customers. MFIN looks forward to working closely with the RBI on this important initiative," MFIN CEO and director Alok Misra said in a release.
Considering the diversity of players in microfinance today, it is the need of the hour, and MFIN has been proactively working on this through its code of responsible lending (CRL), he added.
The industry association has also requested the Reserve Bank of India on the need for asset class-based regulation, Misra said.
MFIN has developed the 'Code of Responsible Lending (CRL) in Micro-credit' to bring different regulated entities, including NBFC-MFIs, banks, SFBs, NBFCs and non-profit/Section 8 MFIs, to agree and adopt a uniform common code for customer conduct.
As of now, the CRL has 113 signatories, representing 70 per cent of the market, the release said.