Mumbai, Nov. 2: Amid sharp criticism of microfinance institutions (MFIs) on using coercive methods for loan recovery, the Reserve Bank on Tuesday said that its sub-committee will submit a report on the issue, as well as their interest rate practices, by January-end.
The Sub-Committee, headed by Mr Y. H. Malegam, is to make recommendations relating to regulation of microfinance activities of NBFCs, especially with regard to issues impinging on borrowers' interests. “A holistic view will be taken on issues relating to PSLCs (priority sector lending certificates) and bank lending to MFIs after the Malegam Sub-Committee submits its report,” the RBI said while announcing the second quarter monetary policy review.