MFIN welcomes RBI move to harmonise regulations for micro finance lenders

Microfinance Institutions Network (MFIN) has welcomed the Reserve Bank's decision to come out with a consultative document to harmonise regulatory framework for micro financiers.

Last Friday, the RBI Governor Shaktikanta Das had said that the central bank will come out with a consultative document harmonising the regulatory frameworks applicable to various regulated lenders like NBFC MFIs, banks, small finance banks (SFB) and NBFCs, investment and credit companies  in the microfinance space.

It is being said that 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), Misra added. The industry association has also requested the Reserve Bank of India on the need for asset class-based regulation, Misra added.

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.