Finance Minister P Chidambaram today said that the proposed Bill on micro finance institutions will provide adequate legislative framework for development and regulation of the sector. Speaking at the Micro Finance India Summit in New Delhi today, Mr. Chidambaram hoped the Bill will be cleared by the Standing Committee and brought to Parliament for passage soon. The Micro Finance Institutions (Development and Regulation) Bill, 2012, is currently being scrutinised by a Parliamentary Standing Committee. The Bill seeks to empower the Reserve Bank to regulate the micro finance industry and fix interest rates ceiling on loans to be provided by lenders.
The Bill, which was drafted in the backdrop of problems faced by borrowers of Micro Finance Institutions (MFIs) in Andhra Pradesh and other states, seeks for compulsory registration of MFIs with the RBI. Lauding role played by the MFIs in financial inclusion, Finance Minister Chidambaram said, responsible financing by way of transparency, interest rate rationalisation, respectful recovery procedure by micro finance institutions are among the challenges faced by the sector.